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Hearing Transcript on U.S. Department of Veterans Affairs Construction Authorization.
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U.S. DEPARTMENT OF VETERANS AFFAIRS CONSTRUCTION AUTHORIZATION
HEARING BEFORE THE SUBCOMMITTEE ON HEALTH OF THE COMMITTEE ON VETERANS' AFFAIRS U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS SECOND SESSION FEBRUARY 27, 2008 SERIAL No. 110-72 Printed for the use of the Committee on Veterans' Affairs
U.S. GOVERNMENT PRINTING OFFICE For sale by the Superintendent of Documents, U.S. Government Printing Office
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CORRINE BROWN, Florida |
STEVE BUYER, Indiana, Ranking |
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Malcom A. Shorter, Staff Director SUBCOMMITTEE ON HEALTH
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Veterans' Affairs are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined. |
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C O N T E N T S
February 27, 2008
U.S. Department of Veterans Affairs Construction Authorization
OPENING STATEMENTS
Chairman Michael Michaud
Prepared statement of Chairman Michaud
Hon. Jeff Miller, Ranking Republican Member
Prepared statement of Congressman Miller
WITNESSES
U.S. Department of Veterans Affairs, Donald H. Orndoff, Director, Office of Construction and Facilities Management
Prepared statement of Mr. Orndoff
American Legion, Joseph L. Wilson, Deputy Director, Veterans Affairs and Rehabilitation Commission
Prepared statement of Mr. Wilson
Independent Budget, Dennis M. Cullinan, Director, National Legislative Service, Veterans of Foreign Wars of the United States
Prepared statement of Mr. Cullinan
Vietnam Veterans of America, Richard F. Weidman, Executive Director for Policy and Government Affairs
Prepared statement of Mr. Weidman
SUBMISSION FOR THE RECORD
Salazar, Hon. John T., a Representative in Congress from the State of Colorado, statement
U.S. DEPARTMENT OF VETERANS AFFAIRS CONSTRUCTION AUTHORIZATION
Wednesday, February 27, 2008
U. S. House of Representatives,
Subcommittee on Health,
Committee on Veterans' Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:02 a.m. in Room 334, Cannon House Office Building. Hon. Michael H. Michaud [Chairman of the Subcommittee] presiding.
Present: Representatives Michaud, Brown of Florida, Miller, and Brown of South Carolina.
OPENING STATEMENT OF CHAIRMAN MICHAUD
Mr. MICHAUD. I would like to call the hearing to order. I would ask the first panel to come up.
I would like to thank everyone for coming today. Today's hearing is an opportunity for the U.S. Department of Veterans Affairs (VA), Veteran Service Organizations (VSOs) and Members of this Subcommittee to discuss legislation dealing with fiscal year 2009 VA construction.
Title 38 United States Code requires statutory authority for all VA medical facility construction projects over $10 million and all medical facility leases more than $600,000 per year. This hearing is a first step in this process.
I would like to note that this draft legislation is based upon the Department of Veterans Affairs fiscal year 2009 budgetary request and authorization for fiscal year 2008. I consider this draft to be a starting point. I look forward to hearing from the VA, the VSOs and Members of the Subcommittee about other construction projects that are important to them.
I will take under consideration the discussion we have here today and any input that may come up. I will then introduce legislation in the very near future.
I would now like to recognize the Ranking Member Miller for any opening statement that he may have.
[The prepared statement of Chairman Michaud appears in the Appendix.]
OPENING STATEMENT OF HON. JEFF MILLER
Mr. MILLER. Thank you very much, Mr. Chairman.
I appreciate you holding this hearing. I have a statement and I would like to go ahead and read it into the record if I might. I also apologize ahead of time. I have an Armed Services Committee hearing going on at the same time, and I have to be going in and out.
Important to delivering high quality care to our Nation's veterans is the planning for construction, as we are doing, and renovation of VA's substantial healthcare infrastructure. As you know, VA maintains an inventory of approximately 1,230 health facilities, including 153 medical centers, 135 nursing homes, 731 community-based outpatient clinics (CBOCs) and 209 Vet Centers.
VA initiated the Capital Asset Realignment for Enhanced Services (CARES) process to identify and address gaps in service and infrastructure about eight years ago, and the CARES process is continuing to serve as the foundation for VA's capital planning priorities.
VA's construction planning, however, is not without its challenges. The rising cost of construction has been significant at best. In fact, the draft legislation we are discussing today would provide over $670 million to account for cost increases for previously authorized construction projects.
I am extremely concerned that VA has an inability to accurately project cost estimates, and it is adversely affecting the construction process. Escalating project costs continue to require this Committee to reexamine and increase authorizations for existing projects, hindering the ability to move forward with new projects important to improving access to care and supporting future healthcare demand.
CARES identified Okaloosa County in my district in Northwest Florida as underserved for inpatient care. In fact, it is the only market area in Veterans Integrated Services Network (VISN) 16 without a medical center. However, VA has yet to act to address the inpatient care gap in this region.
There is a tremendous opportunity to collaborate with the U.S. Department of Defense (DoD) for medical services on the campus of Eglin Air Force Base (AFB) that would benefit both veterans and active-duty servicemembers in this area.
Last September, I introduced H.R. 3489, the "Northwest Florida Veterans Health Care Improvement Act." This legislation would expand partnership between Eglin AFB and the VA Gulf Coast Veterans Health Care System to provide more accessible healthcare to eligible DoD and VA patients in Northwest Florida. In collaboration with DoD, this bill would provide inpatient services and expand outpatient specialty care through the construction of a joint VA/DoD medical facility on the Eglin AFB campus.
At our November 2007 Subcommittee hearing, Major General David Eidsaune, Commander of the Air Armament Center at Eglin Air Force Base, testified about the successful partnership that the VA and DoD had developed in the region and stated that "This cooperative effort should serve as a model for future efforts to support the healthcare needs of our Nation's veterans.''
Mr. Chairman, I am providing you with updated legislative language that reflects the intent of H.R. 3489, and I respectfully request that this language be included in the introduced version of the Department of Veterans Affairs Medical Facility Authorization and Lease Act of 2008 that will be considered by the full Committee.
I appreciate the opportunity to enter my statement into the record, and am available for questions at any time for you, Mr. Chairman, and I yield back.
[The prepared statement of Congressman Miller appears in the Appendix.]
Mr. MICHAUD. Thank you very much, Mr. Miller, for your testimony. We definitely will consider that as we move forward dealing with important issues of construction and leases. I also would invite you to the good State of Maine. I know you are from the east coast, the southern part where it is nice and warm where we are getting a lot of snow up in Maine, and we have the dog sled races up in Northern Maine, so you are more than welcome to partake in dog sled races in Maine.
Mr. MILLER. As you well know, anytime you offer I am on my way up to your great State.
Mr. MICHAUD. Thank you. I also notice in the audience the announcer from the Maine broadcasters who is down here. I know we are getting a big snowstorm in Maine so I don't know if she got delayed and can't get out to head back to Maine. So glad to see you here as well.
On our first panel, we have Dennis Cullinan who is Director of the Veterans of Foreign Wars (VFW) of the United States who is here on behalf of The Independent Budget; Joe Wilson who is here from the American Legion; and Rick Weidman who is here for the Vietnam Veterans of America (VVA). We look forward to your testimony this morning, and without further ado, we will start off with Dennis.
STATEMENTS OF DENNIS M. CULLINAN, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES, ON BEHALF OF THE INDEPENDENT BUDGET; JOSEPH L. WILSON, DEPUTY DIRECTOR, VETERANS AFFAIRS AND REHABILITATION COMMISSION, AMERICAN LEGION; AND RICHARD F. WEIDMAN, EXECUTIVE DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF AMERICA
STATEMENT OF DENNIS M. CULLINAN
Mr. CULLINAN. Thank you, Chairman Michaud and Mr. Miller.
On behalf of the men and women of the Veterans of Foreign Wars and the constituent members of The Independent Budget (IB), I thank you for inviting us to present our views at this most important legislative hearing. As you know, the VFW handles the construction portion of the IB and we will be representing the collective position of The Independent Budget VSOs (IBVSOs) regarding the draft bill under discussion today cited as the "Department of Veterans Affairs Medical Facility Authorization and Lease Act of 2008.''
With respect to construction, the IB's most fundamental objective is to produce a set of policy and budget recommendations that reflect what we believe will best meet the needs of America's veterans. In this regard, and as we have recently testified, the administration's fiscal year 2009 budget request for major and minor construction is woefully inadequate. Despite hundreds of pages of budgetary documents that show a need for millions of dollars of construction projects, the administration has seen fit to have the major and minor construction accounts from the 2008 levels, failing to meet the future needs of our veterans.
The legislative proposal under discussion today demonstrates that you and this Congress are fully prepared to advance VA's construction priorities so that future generations of veterans—such as those currently serving in the deserts of Iraq and the mounts of Afghanistan—will have a first-rate VA healthcare system ready to fully meet their needs. We thank you.
It is our view that the VA construction infrastructure maintenance must be carried out in a methodically planned and orchestrated manner. One of the strengths of the VA's Capital Asset Realignment for Enhanced Services, CARES, process is that it was not just a one-time snapshot of needs. Within CARES, VA has developed a healthcare model to estimate current and future demand for healthcare services and to assess the ability of its infrastructure to meet this demand. VA uses this model throughout its capital planning process, basing all projected capital projects upon demand projections from the model.
The model, which drives many of VA healthcare decisions that VA makes, produces a 20-year forecast of the demand for services. It is a complex model that adjusts for numerous factors including demographic shifts, changing needs for healthcare as the veterans' population ages, projections for healthcare innovation and many other factors.
It is one concern of ours, however, that there have been times in the past and are currently going on, and will undoubtedly will occur in the future were things outside of the CARES process such as political exigencies and local problems that would interfere with carrying out the CARES' methodology.
We realize this is a fact of life. It is something we would ask this Committee to keep an eye on.
We applaud that the construction, renovation and maintenance projects covered in the draft bill are in keeping with this planning process. As you know, the IB recommendation for major construction is $1.275 billion, and minor construction is pegged at $621 million.
Our last observation here is that we applaud Section 5 of this bill for the authorization of additional appropriations for fiscal year 2009 medical facility projects covered by this act and impacting major and minor construction projects of $1.635 billion and $345.9 million, respectively.
Mr. Chairman, thank you. That concludes my oral statement.
[The prepared statement of Mr. Cullinan appears in the Appendix.]
Mr. MICHAUD. Thank you very much. Mr. Wilson?
Mr. WILSON. Mr. Chairman and Mr. Miller, thank you for this opportunity to present the American Legion's views on VA construction authorization within the Department of Veterans Affairs.
The average age of VA healthcare facilities is approximately 49 years old. Proper funding must be provided to update and improve VA facilities. With the enactment of Public Law 110-161, the Consolidated Appropriations Act for Fiscal Year 2008, VA was provided the largest increase in veterans' funding in its 77-year existence. The American Legion applauds Congress for this much needed increase.
However, there are questions, such as, whether or not construction funding adequately maintains VA's aging facilities, as well as its ongoing requirement for major and minor construction.
The fiscal year 2009 budget request was $582 million for major construction, falling far behind the amount recommended by former Secretary Anthony Principi. From 2004 to 2007, only $2.83 billion for CARES projects had been appropriated, an overall shortage of funding.
Mr. Chairman, veterans' healthcare is ongoing 24 hours daily, seven days weekly, and 365 days annually. In addition, returning veterans of Operation Enduring Freedom/Operation Iraqi Freedom are returning home and seeking healthcare within the VA healthcare system.
The fiscal year 2009 budget does not begin to accommodate the needs of the Veterans Health Administration, not to mention planned projects of previous fiscal years. To date, various planned VA Construction projects, to include San Juan, Puerto Rico; Los Angeles, California; Fayetteville, Arkansas; and St. Louis, Missouri, have yet to receive adequate funding. Delays in funding cause delays in healthcare.
Mr. Chairman, when the Veterans Hospital Emergency Repair Act was passed in 2001, there was a construction backlog that continued to grow. During the CARES process, there was the de facto moratorium on construction, but the healthcare needs for this Nation's veterans didn't cease during this time, and yet still the construction backlog increased.
VA's minor construction budget includes any project with an estimated cost equal to or less than $10 million. Maintaining the infrastructure of VA's facilities is no minor task. This is mainly due to the average age of the facilities. These structures constantly require renovations, upgrades and expansions.
From 2006 to date, the American Legion's National Field Service Staff and System Worth Saving Task Force have visited a combined total of 113 VA medical centers (VAMCs), community-based outpatient clinics, or CBOCs, and Vet Centers in all 21 Veterans Integrated Service Networks or VISNs. During these visits, many facilities reported space and infrastructure as their main challenges.
During the American Legion's 2006 site visits, our overall report ascertained that maintenance and replacement of VA's physical plant was an ongoing process and a major challenge to facility directors. It was reported that deferred maintenance and the need for entirely new facilities presented an enormous budgetary challenge.
In 2007, the National Field Service Representatives focused on VA polytrauma centers and Vet Centers, but also maintained, in thought, their connection to the entire VA Medical Center System.
During the American Legion's visit to the St. Louis VA Medical Center on May 16, 2007, it was reported that major work was required on outpatient wards. These wards were previously converted from inpatient wards but were never renovated. The outpatient clinics were in need of modernization. The overall report of this facility included an outdated facility and lack of space.
Mr. Chairman, the issues mentioned are a microcosm of structural problems throughout the VA Medical Center System. Although not mentioned in this testimony, the American Legion maintains an account of its site visits in its annual publication of its "System Worth Savings'' report.
As time progresses, the demand for VA healthcare is increasing while failure to improve the infrastructure causes unsafe conditions for veterans, as well as VA staff. The American Legion continues to insist that sufficient funding must be provided to maintain, improve, and realign VA healthcare facilities.
Mr. Chairman, Mr. Miller, the American Legion sincerely appreciates the opportunity submit testimony and looks forward to working with you and your colleagues to resolve this critical issue. Thank you.
[The prepared statement of Mr. Wilson appears in the Appendix.]
Mr. MICHAUD. Thank you. Mr. Weidman?
STATEMENT OF RICHARD F. WEIDMAN
Mr. WEIDMAN. Mr. Chairman, on behalf of VVA National President, John Rowan, thank for the opportunity to appear here today. Mr. Miller, thank you as well, sir.
VVA is generally in support of this legislation but believes that it is not nearly aggressive enough in fulfilling the promise of the CAREs model and the bottled-up need, if you will, for both renovation and new construction.
The physical plant is indicative of whether or not we are meeting our obligation to our Nation's veterans. We all basically posit, because it just makes common sense, that it affects the quality of healthcare, but we don't know that for a fact, and would encourage you, Mr. Chairman and Mr. Miller, to do a bipartisan call for a study of physical plant with medical outcomes, physical plant with staffing ratios of doctor/patient ratio, RN/patient ratios, et cetera, at facilities, and more importantly, as I said, medical outcomes for people who use that facility by DRG. It is something that certainly the U.S. Government Accountability Office (GAO) could accomplish in a relatively short order in just a couple of months.
Secondly, we favor all of and would suggest that you add somewhere between at least a half and probably $1 billion to more aggressively pursue the schedule that was laid out pursuant to the CARES process.
I would be remiss if I did not note for the record that VVA never "agreed'' to this CARES formula. When the people who developed this formula from Melbank turned to us and say, well, it is too complicated, you wouldn't understand, my response was "try me.'' I was one of only 13 George Komp Fellows at Colgate University, and they have never been forthcoming on that, but basically it is a civilian formula that does not take into account the wounds and maladies of war, does not take into account all the new veterans, does not take into account long-term care, and last but by no means least, it was developed for middle-class folks who can afford Preferred Provider Organizations and Health Maintenance Organizations, and the presentations on that, they figure an average of one to three per person whereas at VA hospitals, we have five to seven presentations per individual who walks across the threshold.
What that means is the burden rate, if you will, of usage is much higher. In other words, many more services have to be provided on average to each veteran who shows up versus each patient in the private sector, which obviously is going to affect your overall resources in terms of staffing, which is also going to affect your overall need for a physical plant that meets the needs of those staff wherein you can provide the highest quality medical care. So we would encourage you to get GAO to do that study.
Secondly, I would like to talk about Puerto Rico for just a moment. Two billion dollars can be found for a new facility in Denver, Colorado, but they want to try and shore up a 1960s facility that is not hurricane proof even to the level of a Category 2 hurricane, and build a new bed tower, and the facilities in Puerto Rico are just simply inadequate.
The veterans who returned home from their valiant service to Puerto Rico were no less brave and no less true to their country than those who returned to Colorado. I am just using that as an example. While the Colorado hospital is needed, it is time to stop doing short shrift on Puerto Rican veterans, and that is reflected in the parking facility, and there are a number of things that we recommended in a statement that be added to this bill this year, and would encourage you to work with the Hispanic Caucus toward that end.
I am just about out of time so I want to thank you very much. I would be pleased to take any questions that you may have.
[The prepared statement of Mr. Weidman appears in the Appendix.]
Mr. MICHAUD. Thank you very much. I know Mr. Miller has to leave for another committee so I would recognize Mr. Miller.
Mr. MILLER. Thank you, Mr. Chairman, and unfortunately, I think we are all going to have to leave shortly for a vote.
One of my questions is, and I think all of you in your testimony recognize and said that there is certainly, I think you, Mr. Weidman, used the term while the legislation before us is good, it is not aggressive enough. I certainly understand that comment.
In the interim, if VA is not able to keep up at the rate that you propose, the $1.275 billion, I think, Mr. Cullinan, that you were talking about, what suggestions do you have in the interim to provide for the needs of the veterans in the local communities?
We talk about co-sharing a lot and we talk about contracting out a lot. I will give to whoever wants to take it, and if any of the three of you want to comment, that is fine.
Mr. CULLINAN. Mr. Miller, I will speak to that briefly. I certainly don't have a perfect solution. The IBVSOs have been, and remain to be, supportive of leasing options. We are cautious, though, that leasing not supplant VA's own construction efforts. That is an area that could perhaps be pursued more vigorously.
The issue of co-locations, that is something we are trying to get a handle on. Co-locations are good in that they make services readily available to veterans. On the other hand, it sometimes seems there is almost a pattern emerging between co-locations and delays, and Fitzsimmons is an example. There is a co-location, and this is a construction project that has been playing out over too many years. We don't know that co-location itself is the problem, but there is a pattern here.
Other than that, the construction has to be pursued, leasing, and it is absolutely necessary, they are going to have to provide services through the private sector, but that is expensive. Thank you.
Mr. WILSON. Mr. Chairman, Mr. Miller, I think there should be an actual overall assessment. Each VA medical center is unique. The American Legion has visited many medical centers and provided site visit reports on these respective VA medical centers. We found that they are very unique in nature in respect to their respective VISN, as well as their communities. For example, out in California there is the Hispanic population, while in other parts of the Nation there are other distinctive cultures, which aren't exactly relegated to ethnic background but also a way of life. This alone makes each VA medical hospital unique. Just as there was provided a model for the construction of VA medical centers, there should be an overall assessment of every facility to ascertain whether or not more funding is required at such facilities.
For example, the Sepulveda VA Medical Center is the only facility that has a Vet Center on its campus, currently there are no planned dollars for that particular structure. On could infer that the dollars were being borrowed from the VA medical center itself, or actually they lacked—they lacked funding, so that particular equipment went unrepaired.
So I would say an overall actual assessment of each VA medical center would be more effective rather than providing a model for one site or VISN to cover the entire VA Medical Center System.
Mr. WEIDMAN. Essentially, Congress put a hiatus on new construction until there was a reasonable plan about where you were going to go because folks were angry that monies had been invested and then suddenly wards were closing and facilities were closing, wasting precious taxpayer dollars, and understandably so, the Congress said we want a plan that makes sense.
This plan is, while it doesn't go far enough because of the inadequacies of the formula itself, from my point of view, is in fact a reasonable plan that is laid before the Congress. We are not working the plan nearly fast enough, and that is the thrust of what I think we are saying to you is that with the plan VA has already laid out that was recommended by Secretary Principi, we can hike that up. There is nothing to preclude, in terms of organizational capacity to supervisor with the reorganization and separation of regular procurement of goods and services from construction procurement within the VA itself, they now have the organizational capacity to oversee many more both major as well as minor construction processes at the same time. So go to the CARES plan itself and hike it up a couple of years.
In answer to your question about contracting out, you directed VA to make sense out of the contracting out two years ago, and so VA took that one foot, and took three country miles, three rural country miles with it, and came up with a proposal for the very misnomered "Project Hero'' that was essentially a fire sale of VA services that would have further diminished VA organizational capacity to provide quality, full wellness service as well as sickness service to our veterans.
With the VSOs united, and it is somewhat more reasonable now, but the problem, Mr. Miller, is that every time you give them a reasonable thing to go and do, and rationalize, like contracting out where it makes sense, people use that at VA as license as opposed to a mandate to do something reasonable.
So if I may suggest, sir, be very cautious in terms of directing contracting out because what may be pushed by, whether Domestic Policy Council, or by VHA, is going to be very different, Mr. Miller, than what you and the Chairman have in mind, if I may suggest.
Mr. MILLER. I appreciate it, and please do not take my comments to mean that it is something that I expect this Committee to mandate to VA. My question was, and my time is out now, but my question was in the interim while these projects are being constructed what do we do?
Mr. WEIDMAN. VVA, where it makes sense, would have no objection to contracting out if in fact there is not the capacity to do it within the VA facility, Mr. Miller.
Mr. MICHAUD. Yes, I had a couple questions on that line of thought. If I understand your testimony correctly, you all agree that the CARES process might not be perfect but at least it gives us a roadmap of where to go. It has been about four years now since CARES came out. A lot of things have changed since then with the Iraq and Afghanistan wars, and the economy.
What would you say about this as far as the construction? I know you say we ought to do more as far as giving more money to move this process a lot quicker. Is there anything we can do in the construction process that would help shorten the timeframe of getting these projects moving forward and hopefully do it in a cost-effective manner?
Mr. CULLINAN. Chairman Michaud, again I don't have a perfect answer. I don't seem to have any of those today. There are certain things that should be looked at. For example, right now the $10 million limit differentiate between a major and a minor construction, perhaps that should be a little bit higher.
I know, for example, DoD, not to pick on DoD, is very good at what is called layering, splitting a project, say a $100 million project into 10 or 11 subparts. VA can pursue a similar course as well, but perhaps it would be better to elevate the $10 million limit. Then there is the issue of reprogramming authority.
For example, a contract goes bust, it is clear that it can't be carried out, sometimes it is difficult to get the money moved from that, at least temporarily, to fund projects into something that is viable. That is something that should be looked at.
There are a certain type of—I am trying to think of the term—single-source contracts where you hire the same company to basically do the design and research work, and do the contraction. The private sector uses that quite a bit. That is very effective. That is something VA could look at, and for now our recommendations on that.
Mr. MICHAUD. Thank you. Does anyone else have anything to add?
Mr. WILSON. It is important that VA mandate a definitive start and complete date of construction projects to ensure it is understood that outsourced contracts are temporary. It is evident some contracts have actually become permanent in nature. It must be assured patient care remains of VA culture; a culture that veterans are accustomed to. On the other hand, when services are contracted out in the communities for an extended period of time, it removes the veteran from the comfort of VA's environment; which may impede adequate care. So I would say VA should establish and communicate a mandate to ensure such contracted projects are set for a complete date. VA should also make it concrete that contracting outside of the VA medical center environment is temporary.
Mr. WEIDMAN. Mr. Chairman, as you know in my copious free time, of which there is none, I have the privilege of serving as chairman of the Veterans Entrepreneurship Task Force, and have looked at procurement right across the board, including very carefully at VA. VA and the U.S. Department of State are actually meeting the 3 percent, but there is much more that can be done, particularly in the area of construction.
Bundling all too often happens, which freezes out all small business, and certainly service-disabled veteran-owned businesses (SDVOBs) that we know from all the studies that have been done by both Census and the Office of Advocacy at the U.S. Small Business Administration are less capitalized then their non-veteran counterparts.
So the bundling freezes our folks out. There needs to be more set asides specifically for SDVOBs, service disabled veteran-owned businesses. VA now has authority under Public Law 109-461, passed by this body unanimously, and the same in the Senate, to move forward and to do set asides, not just for service disabled, but for veteran-owned businesses.
If they stop bundling, break many of those particularly minor construction projects into segments that are essentially bite size, they can be handled by small and medium-sized enterprise, then we can speed up the process, one, two. You grow the organizational capacity of those businesses to do yet more in the future, and particularly in our non-urban areas, this becomes really important, that there not be somebody—if you make it large enough, the contractor that is going to come in from the outside—Togus, Maine, as an example.
But if you break it into bite-size chunks, then in fact you grow the small businesses and medium-size enterprises that are indigenous to that area of the country, and frankly, have a more profound impact on the economy.
Let me just make a point about that. Everybody is talking about the economic stimulus package as if going out and selling consumer goods is the way to go with that. While we fought hard to get service disabled veterans included in that stimulus package, one could argue that a much more sensible approach would be rebuilding the infrastructure of the Nation, and there is no better place to start than hiking up the schedule of rebuilding the infrastructure of the system to care for those who have been injured in service to country, and I would encourage you to—we certainly, if this Committee wants to take that lead, I think all the VSOs will unite behind you and carry that message on both sides of the aisle up to the leadership of the House as well as carry it on the other side of the Hill, sir.
Mr. MICHAUD. And my last question touches upon contracting out while trying to move the CARES process forward. The CARES process recommended a lot of access points, particularly in the rural areas. I don't envision the VA being able to build clinics in all of the rural areas, or it is going to take quite a lengthy amount of time for them to do that. Just very briefly, what is your feeling if there is, for instance, I will use Maine as an example, one of the access points, Holton.
There is a hospital in Holton. It is in a rural area. They have plenty of capacity for space for the VA to use to take care of our veterans, and here is an opportunity where VA is not only unique to Maine, I am sure other rural areas across this country, where it can utilize what is already built there, and provide services a lot quicker because of the facilities there. What is your thought on something like that?
Mr. CULLINAN. Chairman Michaud, on behalf of the IB, again the IB is supportive of contracting out only where absolutely necessary. Speaking on behalf of the VFW, the VFW believes that there are a number of instances, and Holton is one, where contracting out is the only viable option.
The only thing I would add to that in many areas in parts of the country it is not just a question of lack of physical infrastructure, it is a lack of healthcare providers, sometimes then you are going to have to resort to some sort of sharing, contracting out. There just aren't any other options, especially in these remote rural areas.
Thank you, sir.
Mr. WEIDMAN. Contracting out may make the only sense. I used to, when I first came home, teaching in Vermont at one of the Vermont State colleges and lived in Lamoille County, which is a big green part, which means there is no town of 2,500 or more in the middle of north-central Vermont, and so I am aware of the problems of rural healthcare. I never went to the VA. It was three hours away, and therefore, used the civilian medical system.
For us, it would make sense for us to contract it out if, in fact, there is no viable option. One of the things, however, that VA has not done well, even in may of the CBOC contracts out, is train people in the wounds and maladies of war. They haven't trained their own staff in many cases either, but the Veterans Health Initiative, and that is why in my written statement we encourage that you have a hearing on all of this, about making this a veterans' healthcare system, and how does that affect not only the physical plant but also the planning process in terms of staffing needs in the future as well as training needs.
The Veterans Health Initiative in taking of a military history and training, at least making available those curricula, which are on the internet I might add, to any contractor is extremely important that they understand what are the particular problems of veterans. If it is just general healthcare that happens to be for veterans, we are going to be doing a disservice to those rural veterans who have served well.
An example would be mental health. Many of the CBOCs, yes, they have ostensible medical health services out there, but you start to dig into it and they are not qualified counselors who know PTSD from ABCD, and therefore, are not going to be particularly useful to those veterans who need it the most.
Mr. MICHAUD. Thank you. Mr. Brown?
Mr. BROWN OF SOUTH CAROLINA. Thank you, Mr. Chairman.
I noted when I Chaired the Health Subcommittee, we went to Maine and looked at some of the rural healthcare delivery, and I know in South Carolina we have a lot of these community health centers, and it certainly looks like to me in some instances these are State run so that there could be some overlap there to be getting service, and we also looked at telemedicine too, which I think would certainly help fill that gap.
My question is, I represent Charleston in Congress, and we have been looking at trying to combine some services between the VA and the medical university, and I guess in the last three weeks, we were able to go to the Oncology Center, which has a specialty type of equipment, actually an imaging piece of equipment that takes a picture of a tumor and actually treats just the cancer cells, and that piece of equipment costs like $3.5 million. The VA actually bought the piece of equipment in the Oncology Center at the medical university, and their doctors actually administer the treatment.
We have been trying to work at some collaborative basis with the VA and the medical university to extend that, but we have done an extensive study, and I know Mr. Wilson mentioned the Charleston plan, and this is kind of what we were hoping to develop some kind of a model of cross-sharing services. After all, we are the same taxpayer that funds both VA and the medical university too, and the needs of the veterans are becoming more specialized than ever in the history of this Nation.
So it is difficult to have that specialized service at every VA center, so it makes sense to make some combination of services.
We are stuck in some kind of a warp, I guess, in Charleston because we have good medical facilities at the VA, though it is about 50 years old, and it is sitting in a low area of the peninsula, and I know that—you mentioned, Mr. Weidman, that we just aren't proactive enough, and you mentioned the situation down in Puerto Rico. It is the same situation here.
The medical university is building a brand new facility. We could make some combination, be it the operating rooms, be it some of the recordkeeping or whatever, and put another bed in that proximity since 95 percent of the doctors are actually coming from the medical university treat the patients at the VA center.
It would make sense, but we are caught up in some kind of a CARES process that says, you know, we want to be sure we get the maximum use of the facilities that we have, and I am certainly for that.
But I went to New Orleans and we are now doing catch-up instead of being proactive. All those veterans now have to go some place else for service because of the time lapse of being able to make another facility there.
We were hoping to do the same thing in Charleston, but apparently we are caught up in some kind of a formal or some kind of a process that is going to put us in the same posture as New Orleans, and also Puerto Rico, too, I guess, if in fact we have another Class 4 hurricane to come in our region.
I would be interested in some comments from you all, and I apologize for taking most of my time asking that question, but I just want to make that presentation.
Mr. CULLINAN. Mr. Brown, I will speak on behalf of the VFW on this one. We believe that there are instances with respect to high-tech, highly expense equipment, that the best thing to do is to engage in a sharing arrangement. There is no doubt about it. Magnetic Resonance Imaging (MRI) and other imaging devices, you are just not going to have one in every locality, and the same thing goes for certain types of service, cardiac care, for example. If you are going to do open heart surgery, you want to go somewhere where it is done all the time.
So from the perspective of providing the best possible care in the most cost-effective manner, and in the safest manner for veterans, that is the way to proceed.
The only thing I would add to that is that with respect to CARES and the planning process, we do know that there are times when it seems to be the overarching CARES process that is causing the problem with respect to sharing, and sometimes it is a local situation. It is just below the surface.
Without mentioning the location, I know of one individual whose dad had had a heart attack, and there was a VAMC located directly across from a medical center, and there was an assistance at the VAMC supposedly that the care be provided there, whereas the medical facility, it came to light, was saying, well, we should be doing this, it makes perfect sense. We do it all the time. Why not us?
Well, indeed, yes, there is an example of something where VA should simply defer to this private facility, but then we found out that actually what was going on, or a sub-story in all of this, was the fact that there was concern within VA that were they to go this route suddenly the private-sector hospital, medical facility, would be the only game in town, and the costs would go up exponentially.
So it is a complicated business. Again, I mean just to reiterate, there are clearly instances where sharing, contracting out are the best way to go for the good of the veteran, but there are these other little thing percolating beneath the surface.
Thank you, sir.
Mr. WEIDMAN. VVA would very much favor that kind of cost sharing on expensive equipment and on specialty tests where there is propinquity between the two facilities.
I also might add that the co-location, when we have the opportunity, just makes sense. It depends on proactive leadership and it needs to start at the VISN level where there are opportunities developed to bring it to the attention of the under secretary. Something that VA has never done well is being proactive, and frankly, it seems to VVA that this Committee not only has the right, but the responsibility to press VA to start being proactive, and if they won't be, to give you the information or to survey members, and that Charleston situation is an example of something that we would absolutely support 100 percent, and fight for, Mr. Brown.
But there are other opportunities I am sure around the country beyond Puerto Rico, beyond Charleston, that VA should be pursuing. If you borrow the spots analogy, it is a West Coast offense. If they give you the long ball, you go for the long ball. If they will only give you the three-yard pass, take it. But we have got to be looking on the outlook for that, and VA has not done a very good job of doing that.
Mr. MICHAUD. Ms. Brown?
Ms. BROWN OF FLORIDA. Yes. I am going to be very quick, but let me just say that I can report that the VA is doing a very good job in New Orleans. I just was there about a week ago, and they have really done a good job in providing services to the veterans in the area.
I guess my question will go to—well, I want to say I am a strong opponent of design/build, because we have just funded the largest VA budget in the history of the United States, and we have got a lot projects, but if it is going to take us 10 years to build a project, it doesn't make any sense, so we need to have models that work, and if the money is there.
For example, you mentioned, Mr. Wilson, about the stimulus package. Well, what makes sense is that for every $1 billion that we spend, it creates 715 jobs, and certainly part of that work should go to veterans that have been certified, prepared to do the work, but they are having problems. I just met with a group last week in how do they do business with VA when they—they go through the General Services Administration (GSA), they are certified, but yet they feel like they are in the system and they can't get any work.
Mr. WEIDMAN. The VA has not done a great job of doing service-disabled veterans set asides. You gave them that authority with Public Law (P.L.) 109-461. I meet and am in contact with the chief of staff of VA, and with the chief operating officer, Deputy Secretary Mansfield, literally every other week about where the heck are the regulations. They have now finally got them out of the building, part of the regulations, and they are over at the Office of Management and Budget.
However, the Black Letter Law itself, that provision of P.L. 109-461, VA can go ahead and start doing those set asides right now.
Frankly, while it is open to doing this to service-disabled veteran-owned businesses, it is not friendly to doing business with—
Ms. BROWN OF FLORIDA. Right.
Mr. WEIDMAN. —service-disabled veterans. It is almost like Washington, DC, running around Capitol Hill. Is it accessible? Yes. Is it disabled friendly? It sure in heck isn't. All my friends in wheelchairs have a hell of a time here, and it is only their determination that gets them around. We need to make the VA process of procurement and particularly in construction friendly to service-disabled vets. It may be something that you want to recommend to the Appropriations Committee is to put language in the report for the fiscal year 2009 appropriation that VA must set aside 10 percent of all construction funds for veteran-owned businesses, of which a minimum of three percent of every major project go to service-disabled veteran-owned businesses. That only reiterates what is already in the law.
Ms. BROWN OF FLORIDA. I am not disagreeing with you, but all I am saying the groups that have already certified, they are ready to work. They can't get—they are given the run around. I guess we are saying the same thing.
Mr. WEIDMAN. We are saying the same thing, and I would be—if I may talk to you off-line, Ms. Brown.
Ms. BROWN OF FLORIDA. Yes.
Mr. WEIDMAN. We have done a lot of work in pressing hard on where there are problems in VA. Some have been fixed and some have not. We brought it to the attention of the Secretary and Deputy Secretary Mansfield, to Mr. Frye and to the Chief of Staff, Thomas Bowman, repeatedly. We have got a long way to go even at the VA, never mind the DoD which is still trying to figure out how to spell the word service disabled veteran-owned business.
Ms. BROWN OF FLORIDA. Thank you.
Mr. MICHAUD. Thank you very much, Ms. Brown, and I want to thank the panel for your testimony this morning, and there might be some further questions from the Subcommittee. So once again, thank you very much for coming.
We will take a recess. There is, I understand, only one vote, so it should not take long, and then we will reconvene the Subcommittee hearing. Thank you.
[Recess.]
Mr. MICHAUD. Let us get started. I want to thank the second panel for coming today as well, and we have Donald Orndoff, who is the Director of Office of Construction and Facilities Management with the Department of Veterans Affairs. So I want to thank you for coming, and if you could introduce those who are accompanying you as well.
Mr. ORNDOFF. Yes, sir. Thank you, Mr. Chairman.
To my left is Mr. Jim Sullivan. He is from the Office of Asset Enterprise Management. To my right is Mr. Robert Neary. He is the Director of Service Delivery for the Office of Construction and Facilities Management. To my far right is Mr. Joseph Williams, the Assistant Deputy Under Secretary for Health.
Mr. MICHAUD. Thank you very much. If you would begin your testimony.
STATEMENT OF DONALD H. ORNDOFF, DIRECTOR, OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY ROBERT L. NEARY, JR., DIRECTOR, SERVICE DELIVERY OFFICE, OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS; JAMES M. SULLIVAN, DEPUTY DIRECTOR, OFFICE OF ASSET ENTERPRISE MANAGEMENT, OFFICE OF MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND JOSEPH WILLIAMS, JR., RN, BSN, MPM, ASSISTANT DEPUTY UNDER SECRETARY FOR HEALTH FOR OPERATIONS AND MANAGEMENT, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS
Mr. ORNDOFF. Yes, sir. Mr. Chairman and Members of the Subcommittee, I am pleased to appear today to discuss the Department of Veterans Affairs draft authorization bill related to major construction and major lease projects. I will provide a brief oral statement and request that my full statement be included in the record.
Mr. MICHAUD. Without objection.
Mr. ORNDOFF. Let me begin by briefly reviewing the status of VA's major construction program.
The average age of the 5,000 VA-owned medical facilities is over 50 years. Many of these older facilities were not designed or constructed to meet the demands of clinical care for the twenty-first century.
VA is currently implementing the largest capital investment program since the immediate post-World War II period. This program results from the VA's strategic plan and the Capital Asset Realignment Enhanced Services, or CARES program initiated systemwide in 2002 and began implementation in May 2004.
Including our fiscal year 2009 request, VA will have received appropriations totaling $5.5 billion for CARES projects. Currently, VA has 40 active major construction projects. Thirty-three projects are fully funded, for a total cost of approximately $2.8 billion. Seven projects have received partial funding, totaling $560 million against a total estimated cost of $2.3 billion.
For fiscal year 2009, VA is requesting $471 million in new construction appropriations for medical facility projects. This request will provide additional funding to five of the partially funded projects, and begin design on three new start projects.
For fiscal year 2009, VA is seeking authorization for six major medical facility construction projects and 12 major medical facility leases.
I would like to address VA's proposed authorization bill recently submitted to the Speaker.
Section 1, authorization of fiscal year 2009 major medical facility projects: Section 1 of the proposed bill would authorize the Secretary to carry out four major medical construction projects in Lee County, Florida, Palo Alto, California, San Antonio, Texas, and San Juan, Puerto Rico.
Section 2, additional authorization for facility for fiscal year 2009 major medical facility construction projects previously authorized: Section 2 of the proposed bill authorizes the Secretary to carry out two major medical facility projects located in Denver, Colorado, and New Orleans, Louisiana. Both projects were previously authorized for lesser sums under Public Law 109-461, but additional authorization is required to complete the construction projects at these locations.
Section 3, authorization of fiscal year 2009 major medical facility leases: Section 3 of the proposed bill authorizes the Secretary to carry out 12 major medical facility leases in fiscal year 2009. These leases will provide an additional eight outpatient clinics, expand two current outpatient clinics, and develop a primary care annex facility and provide needed research space.
Section 4, authorization of appropriations: This section request authorization for the appropriation of $477,700,000 for major construction projects in fiscal year 2009, and $1,394,200,000 for projects previously authorized for lesser sums. This section also provides $60,114,000 for medical facilities accounts to authorize 12 major medical facility leases in fiscal year 2009.
In closing, I would like to thank the Subcommittee for its continued support of the Department's infrastructure needs. We look forward to working with the Subcommittee on these important issues. I urge you to support our proposed authorization bill so the Department can move forward on important projects to enable the highest level of care for veterans.
Again, thank you for the opportunity to appear before the Subcommittee today. My colleagues and I stand ready to answer your question.
[The prepared statement of Mr. Orndoff appears in the Appendix.]
Mr. MICHAUD. Thank you very much. I really appreciate it. A few questions.
The Department is requesting authorization for 12 leases and the Committee is aware that in October of last year, the General Services Administration recentralized leasing within the Federal Government at GSA. How will this action on the part of GSA affect VA's ability to acquire these leases?
Mr. ORNDOFF. Sir, I would like Mr. Neary to answer if I may.
Mr. MICHAUD. Yes.
Ms. NEARY. Thank you, Mr. Chairman.
It is correct that late last year the General Services Administration recentralized much of the leasing that is done within the Federal Government. However, VA retains the authority to lease medical and medically-related space in support of the Health Care System. And so for these 12 leases we will be managing the execution with VA.
Mr. MICHAUD. Are these leases in VA affected by GSA's action and what is the impact on VA?
Ms. NEARY. There are many leases in VA that will be affected by GSA's actions, particularly within Veterans Benefits Administration, staff offices and others. Any non-medical lease greater than 20,000 square feet will now be required that the acquisition be by GSA for the VA. It is a very new direction, and we will be watching it closely, working closely with GSA to ensure that they are able to provide these leases in a timely manner to meet our needs.
As I say, this has happened fairly quickly, and it would be my perspective that GSA has taken on a significantly increased workload, and we want to make sure that they have the capacity to deliver these spaces in time to meet our needs.
Mr. MICHAUD. Thank you.
In the first panel, we heard Mr. Weidman talk about the Puerto Rico facility, that it is outdated, and non-hurricane proof VA medical facility, and there is a report out. Has your office seen that report that Mr. Weidman was referring to, and if you have seen it, what specific steps has VA taken to correct the problem, and how long will it take to correct the conditions in Puerto Rico?
Ms. NEARY. Mr. Chairman, I am not sure if Mr. Weidman is referring to the congressionally-mandated report that was required, I think, in the last session of Congress and that we responded to, but I am very familiar with Puerto Rico and the needs there, and we have a very active construction program ongoing.
We are currently under construction with a six-story bed tower that will place all the hospital beds in seismically safe space. In the emergency supplemental funding that was provided last year, a component of that went to San Juan to construct one of three pieces of our plan for San Juan. This budget that is now before the Congress includes the funding for the second piece of that, and when those two are done, which involves construction of clinical and administrative space, we will then be in a position to demolish the existing bed tower there, and retrofit the lower floors, we call it the pancake, three or four floors at the base of the existing hospital will be retrofitted to provide not only modern but seismically safe space.
So we have a plan which we believe effectively will meet the needs of veterans in Puerto Rico.
Mr. Weidman mentioned parking. There is no question about it. There is significant parking shortage there and we are looking for ways in our plan with some of the funding that we are getting and we will get down the road to address the parking needs as well.
Mr. MICHAUD. How long do you think it will take you to deal with that?
Ms. NEARY. The bed building is under construction and it will be completed next year. We expect to award a contract for an administrative building at the end of this fiscal year in early next year.
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