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Opening Statement of Hon. Bill Johnson, Chairman, Subcommittee on Oversight and Investigations

Good morning.  This hearing will come to order.

I want to welcome everyone to today’s hearing on the VA'S Dubious Contracting Practices: Savannah.

As this Subcommittee made clear to the VA in its invitation to this hearing, we are examining the proposed clinic in Savannah as a case study for the rest of the country.  We have evidence of similar dubious practices taking place at other locations, and our intent is to have the VA fix the problems and conduct necessary oversight at all of its construction sites.

The problematic practices referred to in today’s hearing title have to do with the VA exceeding the size and scope of requested authorizations, conducting haphazard due diligence, and not being forthcoming about its actions to Congress. 

In fact, this Subcommittee contacted the VA last year with several specific concerns about this site in Savannah with the hopes of helping the VA conduct better business.  The response was disheartening: despite the specific concerns cited, the VA dismissed the Subcommittee’s efforts to reach out and work together, instead giving a cursory response.

When the VA selects a site, such as Savannah, and requests a specific authorization from this Committee, it is reasonable to expect that the VA intends to move forward toward those goals.  As is the case with Savannah and many other sites around the country, the VA’s actions have not matched its words. 

In its Fiscal Year 2013 budget request, the VA claims to use “the best infrastructure planning practices from both the private and public sectors to integrate all capital investment planning…”  It is my hope that today’s discussion elaborates on those best practices the VA says it uses as well as best practices that it declines to use. 

The VA’s Fiscal Year 2009 budget request includes an authorization request of over three million dollars for expansion of its Savannah CBOC with an annual rent of over a million dollars.  The Fiscal Year 2013 request includes the same authorization amount and the same net usable square feet for what the VA refers to as a “satellite outpatient clinic.”  On the surface, things appear to be the same. 

However, in 2009, the VA issued a request for a proposal for nine to twelve acres in Savannah that could accommodate constructing an outpatient clinic.  The difference between what the VA had proposed to Congress less than a year earlier and what it was moving forward with in the community was significant.  Among the alternatives submitted in its fiscal year 2009 budget submission to Congress, the VA stated that constructing an outpatient clinic “burdens VA with additional owned infrastructure.”  Conversely, a November 2010 letter from Glenn Haggstrom, the VA’s Executive Director for Acquisition, Logistics, and Construction, can’t say enough good things about the VA building new construction. 

Notwithstanding the lack of communication with Congress, the VA also stumbled through its acquisition process, using an incomplete and careless appraisal process that according to many involved in commercial real estate lacks common sense.  To veterans, taxpayers, and Congress, the resulting concern is that the VA is failing to get the best value.

Based off the original FY09 budget request, the “expanded” Savannah clinic would be occupied in June 2011.  In the most recent budget request submitted just a few weeks ago, the status is listed as ‘acquisition process initiated.’  As I mentioned earlier, this is not an isolated incident, and the veterans in need of services are the ones being harmed by delays, cost overruns, and failure to thoroughly analyze costs and benefits associated with every alternative.   

I look forward to an honest discussion today on the VA’s methodology, including mistakes and missteps.  I further hope to hear solutions that can bring veterans in Savannah and throughout the country a timely delivery of healthcare services at the best value. 

I now recognize the ranking member for an opening statement.

I would now like to welcome the panel to the witness table. On this panel, we will hear from Robert Neary, Acting Executive Director of the Office of Construction and Facilities Management at the Department of Veterans Affairs.  He is accompanied by George Szwarcman, Director of Real Property Services at the Department of Veterans Affairs, and Brandi Fate, Director of Capital Asset Management and Support in the Veterans Health Administration.

Our thanks to the panel. You are now excused.

The issues discussed today were yet another example of this Committee’s efforts to reach out to the VA with founded concerns in an attempt to quickly and easily resolve them.  The dismissive response from VA Congressional Affairs makes it appear that the VA does not desire a cooperative relationship in solving problems.  I hope this is not the case, and that we can move forward together to solve these problems and others.

I want to again mention that today’s hearing topic is not limited to Savannah.  We know these actions are occurring in other locations, and today’s discussion is a case study of this national issue. 

With that, I ask unanimous consent that all members have five legislative days to revise and extend their remarks and include extraneous material.

Without objection so ordered.

I want to thank all members and witnesses for their participation in today’s hearing.

This hearing is now adjourned.