MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:

On behalf of the 2.4 million men and women of the Veterans of Foreign Wars of the U.S. (VFW) and our Auxiliaries, we appreciate the opportunity to present our views on the implementation of the GI Bill. 

The VFW commends this subcommittee for working to ensure that the new GI Bill is implemented and managed properly.  This committee has demonstrated unified bipartisan dedication to improving the GI Bill.  The VFW urges this subcommittee to continue to exercise careful oversight throughout the implementation of the new GI Bill.  We thank you for holding hearings on this issue and shedding light on the GI Bill implementation process.

The VFW, as a leading advocate for the new GI Bill (Chapter 33), supports the outside contracting and development of a computer program that will administer the GI Bill to student veterans.  We are concerned that the VA, while using a standard government Request for Proposal (RFP) contract language, is putting the future of this benefit in jeopardy.  The leading advocates for the new GI Bill recognized, prior to its enactment, that it would be both prudent and necessary to administer the new program electronically.  While we believe VA is able administer this program, we are gravely disappointed that VA leadership has not been more open about its decision making process or more consistent in its messaging.  We also share this subcommittee’s concerns that VA has not articulated its “fail safe” plan.  The VFW is not fundamentally opposed to contracting to provide the best solutions at a fair market price, if the government is unable or unequipped to provide the industry standard. 

We have come to understand that VA lacks an Information Technologies (IT) department sufficient to design and develop a rules-based software system to administer the GI Bill benefit.  Any software program developed to administer the new GI Bill benefit will be web-based allowing veterans and VA employees to access the program online.  The software will require input from DOD, VA, Veterans, and possibly colleges.  It will then communicate with the VA, Veterans, colleges, and the Department of the Treasury.  The RFP demands a highly accurate and timely computer system.  The goals defined by the VA in the RFP are goals that the VA is not currently capable of meeting with the much simpler Chapter 30, Montgomery GI Bill (MGIB), claims powered by a personal centric system. 

The new GI Bill is more intricate than all previous programs.  The 1944 GI Bill distributed two payments: tuition paid to the universities or trade schools capped at $500 a year and a living stipend based on dependents.  The new GI Bill makes three very precise payments: the highest in-state tuition paid to colleges and universities, a variable housing allowance (Basic Housing Allowance [BHA]) determined by the zip code of the school based on an E-5 with dependents, and $1000 annually paid to the student veteran for books.  Any software designed to track this information and administer these payments must be continually updated.  We would like to see the VA take primary responsibility in managing the software, but we do not believe the VA can develop software or deal with the ever-occurring programming fixes and system maintenance, at this time. 

The VFW has serious reservations with allowing the contractor to own the software and sourse code of the benefits delivery system.  Essentially, the RFP allows the contractor to “sell a license” to the VA and when the contract for that license expires; the contractor can set the pricing terms of the contract.  The type of system developed by a contractor will likely have no other potential user.  The only customer of this product will be the VA Education Service.  In this case, the company may bid low to obtain the contract and then once the initial period of service expires the company may increase its price because there is no other cost effective option for the VA. 

We want the VA to own the software and source code.  We expect every security measure and industry standard for IT to be applied in the implementation and administration of the GI Bill.  When a customer buys Windows they only get a license.  If the customer is unhappy with the purchase, they must seek a different company and product to fill the void left by terminating the contract with Windows.  We DO NOT want to see VA and veterans held hostage by the only GI Bill software company available. 

During the crafting of the Post-9/11 Veterans Education Assistance Act of 2008, now section 5001 of Public Law 110-252, Veterans Service Organizations (VSO) were aware that in order to implement this program, contracting is necessary to meet the August 1, 2009 dead line.  The VSO community realized that with placing $100 million dollars in the appropriation for this program we would contract for IT as a component.  We also realized that the IT build would draw on DOD’s BHA table already in use and the cost of tuition at all accredited institutions across the nation maintained by the Department of Education.  These two components alone are very detailed and maintained by other government organizations outside of VA, thus making it harder for VA to import mechanisms that duplicate other government functions.  A contractor can deal with these other systems, possibly gain access to them or reverse engineer these systems into a software that saves VA the annual pain of tracking all of this data that is far beyond their immediate concerns.  

VA leadership has contributed to the confusion surrounding the GI Bill contracting issue.  For months, rumors have circulated that VA education employees would be terminated and replaced by computers and contractors that administered and adjudicated the GI Bill benefit.  VA leadership only started engaging the VSO community and discussing the contracting situation when the press started to report on the issue.  Instead of enlisting our support to tell the story of this policy’s success and educate the public, they closed the doors and ignored the VSO’s.  We find this counterintuitive, the VSO community could be a close ally of VA in trying to manage expectations and deliver sound information.  Once again, the VA leadership has squandered any trust the community was willing to place in the VA.  Our confidence is shaken in VA’s ability to make sound decisions. 

Without confidence in VA’s leadership and decision-making, we are extremely concerned that the VA has yet to discuss a “fail safe” plan.  The American public needs to know what the VA will do if the software or contractor fails to deliver services, so that GI Bill benefits will be paid by August 1, 2009.  The VFW recognizes that all VA Education Service employees should still be employed in their current positions on August 1, 2009.  Considering that Chapter 30 and 31 benefits must continue to operate in tandem with Chapter 33; the RFP does not call for an outsourcing for the current MGIB, Vocational, Rehabilitation, and Employment (VR & E) programs we expect they will continue to process all education claims.  We have a number of questions about how VA will manage this transition. 

We thank this subcommittee for the opportunity to share our views.  We welcome any questions.