MADAM CHAIRWOMAN AND DISTINGUISHED MEMBERS OF THE SUBCOMMITTEE, on behalf of the nearly 370,000 members of the Military Officers Association of America (MOAA), I am honored to have this opportunity to present the Association’s views on implementation of the Post-9/11 GI Bill legislation (P.L. 110-252).    

MOAA does not receive any grants or contracts from the federal government.

STATEMENT 

The Subcommittee requested MOAA’s views on issues concerning the implementation of P.L. 110-252 GI Bill benefits as codified in Chapter 33, 38 U.S. Code.

Specifically, the Subcommittee is examining three issues at this hearing:

1. Should the new information technology system be developed by an outside contractor or VA employees?  If not, what are the advantages and disadvantages, if any, of developing the new information technology system by using only VA employees, including  whether current VA staffing is sufficient to complete development by August 1, 2009.
2. How VA managed the proposal process that resulted in two requests to industry, including the industry’s response to the two requests.
3. The VA’s plan for the restructuring the education service if there is outsourcing.

Should the new information technology system be developed by an outside contractor or VA employees?  If not, what are the advantages and disadvantages, if any, of developing the new information technology system by using only VA employees, including  whether current VA staffing is sufficient to complete development by August 1, 2009.

MOAA has no position on these questions.  However, we offer for the Subcommittee’s consideration a perspective on implementing the Post-9/11 GI Bill that may help to answer them.

The Post-9/11 GI Bill program is a radical departure from GI Bill programs of the past 50 years.  Major differences include the calculation of benefits, direct payments to institutions, a new housing stipend and an annual book stipend. 

Unlike the Montgomery GI Bill, Chapter 33 benefits are calculated up to the cost of the highest in-state public college or university tuition rate.  MGIB rates, on the other hand, are based on a table of set monthly rates that are based on only two variables: the length of the contract that established entitlement and the number of credits or training taken -- not the tuition charged at the institution where the veteran is enrolled.   In short, the calculation of benefits paid under Chapter 33 can vary ‘infinitely’ by the number of enrolled veterans.

In addition, Chapter 33 benefits will be paid directly to institutions rather than to the veteran. 

The housing stipend is based on the Dept. of Defense’s basic allowance for housing (BAH) of servicemembers in grade E-5 with dependents.  The BAH stipend is further tied to the veteran’s zip code of residence.

The third payment stream in Chapter 33 is an annual book stipend of $1000.

These calculations in themselves should be considered “business process” transactions that can and should be supported by modern data processing technologies.  In other words, the calculations are not in themselves a “veteran’s benefit”.  In this sense, it is not critical that the new claims processing system should be established either inside the VA or contracted out.

Outcome Measures of Merit

MOAA believes that a claims processing system for Chapter 33 can be set up along the lines of commercial tax return products like “Turbo Tax”.  Millions of private citizens use such commercial products to submit their annual tax returns to the Federal Government’s Internal Revenue Service (IRS).  A similar approach may be desirable for administering Chapter 33 benefits.

Commercial tax payer software tools have certain features in common:

Simplicity.  Users follow a set of simple questions and data entry prompts.  Backup information, government forms and instructional videos are available to understand more complex tax-related issues.

Efficiency.  Millions of taxpayers pay taxes owed and receive refunds on their taxes through online transactions between their financial institutions and the IRS.  Studies have indicated that the government and taxpayers benefit by using such tools.

Speed.  Submissions of tax returns on line has increased exponentially in recent years and greatly accelerated the turnaround time for receipt of tax refunds directly into bank accounts.

Accuracy.  Studies would suggest that commercial tax software products are at least as accurate as cumbersome calculations using multiple, confusing paper forms.

Reduced cost.  Commercial tax software products have greatly reduced government and taxpayer paper transactions and handling costs.

Security.  An overriding concern of the VA must be protection of a veteran’s personal information.  Commercial tax preparation software appears to have met government requirements for privacy and data protection.

MOAA believes that technologies can be developed for administering Chapter 33 benefits that could link government entities (The Dept. of Veterans Affairs and the Dept. of Education, primarily), educational and training institutions and veterans in a collaborative partnership.

How VA managed the proposal process that resulted in two requests to industry, including the industry’s response to the two requests.  MOAA has no information upon which to offer comment on this issue.

The VA’s plan for the restructuring the education service if there is outsourcing. 

MOAA has no information upon which to offer comment on this issue.

MOAA is grateful to the Subcommittee’s continuing interest in and leadership on the implementation of the Post-9/11 GI Bill program.  We recommend that appropriate oversight hearings be conducted as needed to ensure that the policies, procedures and technologies supporting the new program are in place by 1 August 2009.