[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
DECONSTRUCTING THE U.S. DEPARTMENT OF VETERANS AFFAIRS CONSTRUCTION
PLANNING
=======================================================================
HEARING
before the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
APRIL 5, 2011
__________
Serial No. 112-7
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Printed for the use of the Committee on Veterans' Affairs
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COMMITTEE ON VETERANS' AFFAIRS
JEFF MILLER, Florida, Chairman
CLIFF STEARNS, Florida BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana LINDA T. SANCHEZ, California
BILL FLORES, Texas BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio JERRY McNERNEY, California
JEFF DENHAM, California JOE DONNELLY, Indiana
JON RUNYAN, New Jersey TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
Vacancy
Vacancy
Helen W. Tolar, Staff Director and Chief Counsel
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
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C O N T E N T S
__________
April 5, 2011
Page
Deconstructing the U.S. Department of Veterans Affairs
Construction Planning.......................................... 1
OPENING STATEMENTS
Chairman Jeff Miller............................................. 1
Prepared statement of Chairman Miller........................ 40
Hon. Bob Filner, Ranking Democratic Member....................... 2
Prepared statement of Congressman Filner..................... 41
Hon. Silvestre Reyes, prepared statement of...................... 42
WITNESSES
U.S. Department of Veterans Affairs, Hon. W. Scott Gould, Deputy
Secretary...................................................... 3
Prepared statement of Mr. Gould.............................. 42
U.S. Government Accountability Office, Lorelei St. James, Acting
Director, Physical Infrastructure Issues....................... 32
Prepared statement of Ms. St. James.......................... 46
______
Veterans of Foreign Wars of the United States, Raymond Kelley,
Director, National Legislative Service......................... 33
Prepared statement of Mr. Kelley............................. 49
SUBMISSIONS FOR THE RECORD
Kaiser Permanente, statement..................................... 51
Sacred Heart Health System, Pensacola, FL, Peter Heckathorn,
CMPE, Executive Vice President, letter......................... 53
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Follow-up Information:
U.S. Department of Veterans, News Release entitled, ``VA & HUD
Issues First-Ever Report on Homeless Veterans, Assessment Key
to Preventing and Ending Homelessness,'' dated February 10,
2011......................................................... 58
Lorelei St. James, Acting Director, Physical Infrastructure
Issues, U.S. Government Accountability Office, to Hon. Jeff
Miller, Chairman, Committee on Veterans' Affairs, letter
dated April 20, 2011......................................... 59
Post-Hearing Questions and Responses for the Record:
Hon. Jeff Miller, Chairman, Committee on Veterans' Affairs to
Hon. Eric K. Shinseki, Secretary, U.S. Department of Veterans
Affairs, letter dated May 13, 2011, and VA responses......... 61
Hon. Bob Filner, Ranking Democratic Member, Committee on
Veterans' Affairs, to Eric K. Shinseki, Secretary, U.S.
Department of Veterans Affairs, letter dated May 6, 2011, and
VA responses................................................. 77
Hon. Bob Filner, Ranking Democratic Member, Committee on
Veterans' Affairs, to Hon. Gene L. Dodaro, Comptroller
General, U.S. Government Accountability Office, letter dated
May 6, 2011, and GAO responses............................... 79
Hon. Bob Filner, Ranking Democratic Member, Committee on
Veterans' Affairs, to Raymond C. Kelley, Director, National
Legislative Service, Veterans of Foreign Wars of the United
States, and VFW responses.................................... 82
DECONSTRUCTING THE
U.S. DEPARTMENT OF VETERANS AFFAIRS
CONSTRUCTION PLANNING
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TUESDAY, APRIL 5, 2011
U.S. House of Representatives,
Committee on Veterans' Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:30 a.m., in
Room 334, Cannon House Office Building, Hon. Jeff Miller,
[Chairman of the Committee] presiding.
Present: Representatives Miller, Bilirakis, Roe, Buerkle,
Johnson, Runyan, Stutzman, Filner, Brown, Reyes, Sanchez,
McNerney, Donnelly, Walz, Barrow, and Carnahan.
OPENING STATEMENT OF CHAIRMAN MILLER
The Chairman. I want to welcome everybody here to a hearing
entitled ``Deconstructing the U.S. Department of Veterans
Affairs (VA) Construction Planning.'' And we are here to
examine VA's fiscal year 2012 construction budget request,
including the methodology used to arrive at the request in VA's
long-term construction outlook.
Unlike previous long-term construction modeling that
covered 5-year projections, VA has now put forth a 10-year
construction plan using the Strategic Capital Investment
Planning or SCIP process. The SCIP process is intended to draw
upon past lessons in VA construction modeling, as well as
knowledge from the private sector in meeting current needs and
anticipating future ones.
Without a doubt a new capital asset planning process
presents new challenges and it presents new opportunities. The
opportunities are there to provide veterans with state-of-the-
art health care in modern facilities closer to where veterans
live. The challenges are that VA has an aging hospital
infrastructure, a considerable backlog of maintenance projects,
an aging veteran population that makes long-term planning
difficult and a constrained fiscal environment within which to
operate.
VA's SCIP plan has been described as a 10-year action plan
that would require a minimum investment of $53 billion to $65
billion over 10 years. Needless to say, given the fiscal
environment we are in, that is an ambitious funding
requirement, one that we must be sure relies on good
assumptions and reliable analysis. And toward that end, I have
several questions I would like to have examined at this
hearing.
First, I am interested in learning the health care
utilization assumptions that were used in adopting the plan,
especially given the expected dramatic decline in the veterans
population over the next 20 to 30 years.
Second, I am interested to learn whether the $53 billion to
$65 billion price tag can realistically be met given the
President's fiscal year 2012 request because, if carried
forward annually for 10 years, it would only meet half the
cost.
Third, I am interested in learning about the alternatives
VA considered to meet its service delivery needs other than in-
house construction. Were partnerships with other Federal
providers adequately explored, and what about public-private
partnerships? In short, were all available options to meet
veterans' needs on the table and fully considered?
Fourth, it is my understanding that the SCIP plan does not
include costs associated with up-front facility activations or
annual operating expenses and I'm interested to learn whether
those costs ought to be known before Congress adopts one
proposal over another.
And finally, I am interested in learning about VA's recent
performance in its management of construction projects. If the
Committee can be given some assurances that VA has been a good
steward of the construction funding that Congress has already
provided, it will help in the decisions that we must make
moving forward. I believe it is imperative that VA use full
transparency in presenting its decision-making process on how
every dollar was spent once it was appropriated.
VA must also ensure that all cost effective options are
considered, all bias acknowledged, and due diligence conducted
as it moves forward in its capital asset planning.
Comprehensive planning on the front end will prevent massive
cost overruns and project delays down the road.
In the end, our overarching objective is clear. Veterans
expect and we should deliver the best that 21st Century health
care has to offer. This hearing begins a discussion of how we
will collectively chart a path towards meeting that objective.
I do appreciate everyone's attending at this hearing and
now I yield to the Ranking Member for his opening statement.
[The prepared statement of Chairman Miller appears on p.
40.]
OPENING STATEMENT OF HON. BOB FILNER
Mr. Filner. Thank you, Mr. Chairman. I ask that my
statement be made a part of the record, and I just want to
comment briefly. Mr. Gould, I want to figure out what is the
clever bureaucratic thinking behind putting forward a 10-year
plan and asking for a budget appropriation that will take 20
years to meet the 10-year plan. There must be something really
clever there that I am missing because it looks like you are
putting together a 20-year plan.
But I don't understand it. If you are going to come up with
a 10-year plan and you say you need X amount of dollars and you
ask for half of that, I am not sure what the point is. Why have
a plan if you are not going to even ask for it to be
implemented? I will put my full statement in the record, Mr.
Chairman.
[The prepared statement of Mr. Filner appears on p. 41.]
The Chairman. Thank you, Mr. Filner. Thanks to the first
panel who is with us today. We have the Honorable W. Scott
Gould, Deputy Secretary of Veterans Affairs. Thank you for
being with us, sir. And Mr. Glenn Haggstrom, Executive
Director, Office of Acquisition, Logistics, and Construction.
There are other folks with you today, and I would ask you,
Deputy Secretary, if you would introduce them to us as well.
Your complete written statement will be made part of the
record, and you are recognized, sir.
STATEMENT OF HON. W. SCOTT GOULD, DEPUTY SECRETARY, U.S.
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY GLENN D.
HAGGSTROM, EXECUTIVE DIRECTOR, OFFICE OF ACQUISITION,
LOGISTICS, AND CONSTRUCTION, U.S. DEPARTMENT OF VETERANS
AFFAIRS; PATRICIA VANDENBERG, MH, BS, ASSISTANT DEPUTY UNDER
SECRETARY FOR HEALTH FOR POLICY AND PLANNING, VETERANS HEALTH
ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; JAMES M.
SULLIVAN, DIRECTOR, OFFICE OF ASSET ENTERPRISE MANAGEMENT,
OFFICE OF MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND
ROBERT L. NEARY, JR., ACTING DIRECTOR, OFFICE OF CONSTRUCTION
AND FACILITIES MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS
Mr. Gould. Mr. Chairman, thank you so much, Ranking Member
Filner, distinguished Members of the House Committee on
Veterans' Affairs. Thank you for the opportunity to appear
before you today to discuss the Department of Veterans Affairs
construction planning.
Mr. Chairman, thank you for introducing Glenn Haggstrom,
immediately to my right. May I also introduce Jim Sullivan,
Director of our Office of Asset Enterprise Management, Office
of Management, and Pat Vandenberg, Assistant Deputy Under
Secretary for Policy and Planning. These are, respectively, the
people leading our construction, financial overwatch and health
care policy and planning, so I think we will have a very full
discussion today.
It is a privilege for me to represent Secretary Shinseki
today and the hard-working people at VA, the employees who each
and every day provide veterans and their families with care and
benefits second to none.
Our mission at VA is to provide the best possible health
care and services to veterans wherever they reside. Next to a
well-trained staff and state-of-the-art technology, our capital
infrastructure is essential to delivering high quality
services.
Today we have a comprehensive array of capital
infrastructure across the Nation, including over 1,400 points
of service with a replacement value of over $100 billion.
Together they comprise the largest direct health care system,
the largest cemetery system and one of the largest benefits
services systems in America.
But it is also true that the average age of our buildings
is over 60 years. During these years, the medical needs of the
veterans we serve have evolved. In general, they have chosen to
live in different cities and towns across the country. Their
demand for care and benefits has increased. Their needs for
certain kinds of care, like polytrauma, post-traumatic stress
disorder (PTSD), traumatic brain injury (TBI) and other
injuries common to our ongoing conflicts have changed as well.
Consequently, we at VA are engaged in a constant effort to
do three things. Number one, anticipate the many changing
factors that influence our ability to care for veterans. Number
two, determine the location, size and functionality of the
buildings that will serve our veterans in the future. And last,
request the funding that will meet future needs while
fulfilling the promise of access to high quality care today.
Our capital infrastructure planning factors in new models
of care and many technological developments that were not
available 10 years ago. Telehealth and telemedicine, for
example, are critically important in providing care to veterans
in remote areas and often to those with chronic health care
needs. As a result, we can provide care to more veterans with
less infrastructure--fewer hospitals, for instance, than we had
just a few year ago.
We know that many prosthesis that once required inpatient
care are now delivered through outpatient care. And we know
that veterans and taxpayers are often served best in the
veteran's own community. We also have new ways to finance our
capital infrastructure. For example, we are leveraging non-
governmental and private-sector interests and expanding our
capital infrastructure through investment programs, including
the Enhanced Use Lease, or EUL. We have shed a number of under
utilized and vacant buildings through our Building Utilization
Review and Repurposing Program. We not only buy facilities, but
we lease them, about 1,600 in our system today.
And finally, in areas where the sparse population makes
infrastructure impractical and inefficient, we continue to use
contract care services for veterans' needs.
The imperative remains the same--ensure veterans and our
employees have access to safe and secure facilities in which to
receive and provide care and services. Serving veterans now and
in the future, therefore, is the principal driver of our
planning infrastructure and the overarching goal of the new
Strategic Capital Investment Planning process, known as SCIP.
To this end, we have developed a new tool to prioritize the
capital needs across VA's three administrations, as well as
across the budget accounts through which capital funding is
provided by Congress. SCIP is a rigorous capital planning
process that quantifies and prioritizes the need to repair,
upgrade, or replace VA's aging infrastructure and address the
current and future needs of America's veterans within the
context of prudent capital investment decision-making.
SCIP means that VA capital decisions are no longer made in
administration or program stove pipes. By taking a corporate
approach to capital planning, SCIP ensures that our capital
investments are considered together and are prioritized
according to the same criteria. In my written statement I
describe how SCIP supports VA's top three priorities, namely to
increase access, eliminate the claims backlog and end veterans'
homelessness.
I also outline our budget request for fiscal year 2012 and
I emphasize that we are working toward achieving our
priorities, while ensuring the best possible use of taxpayer
dollars. In fact, SCIP is part of a larger effort to establish
and reinforce the importance of right behaviors, disciplines,
processes and leadership to become a more effective,
accountable and efficient department.
In summary, the VA capital plan and associated fiscal year
2012 budget before this Congress seeks to support the
requirements necessary to meet the needs of those who have
served this country and their families for years to come.
Mr. Chairman, Members of the Committee, this concludes my
remarks and I thank you, again, for the opportunity to be here
today and to respond to your questions.
[The prepared statement of Mr. Gould appears on p. 42.]
The Chairman. Thank you very much. The SCIP process does
project future space needs through 2018, however, it is my
understanding that SCIP is based on the same Milliman
utilization projection data that VA uses for the enrollee model
for the budget.
In 2008, RAND reported in a review and evaluation of the VA
enrollee health care projection model that this model is useful
for short-term budget planning, but has limited utility for
longer term planning and policy analysis.
So my question is, how can you accurately project needs to
2018 using the Milliman data and is this a flaw in SCIP?
Mr. Gould. Mr. Chairman, we use a variety of methods to try
to forecast our demand in the system, and you are quite right.
The purpose of our modeling is to look as far into the future
as we can. In fact, we try to push ourselves out to a 20 year
point. We use our Milliman model to help accomplish that, and
it has proved quite accurate in the near term.
I would like to ask Pat Vandenberg to give you a little bit
more detail into how the model is used.
Ms. Vandenberg. Thank you for that question. Yes, RAND did
acknowledge that there were some challenges in the long-term
projections, and since the RAND study has been received, we
have looked for ways to strengthen the reliability of the
model. We pay particular attention to better understanding the
cohort that is enrolled with us, and in particular the needs of
veterans coming from the current conflicts.
We have also looked to crosswalk our experience with the
model to other projection tools such as those that are used by
Medicare to project the demand for services. Since many of our
veterans are over 65, we can look at the reliance factor, not
only within our system but also within Medicare.
The Chairman. VA's total capital budget request for fiscal
year 2012 is relatively low and both I and the Ranking Member,
have both addressed that in our opening statements, when
compared to the SCIP magnitude costs over 10 years. Given the
fiscal constraint that we are in, is the SCIP plan realistic?
And further, as I said, it does not include activation costs or
annual operating expenses. Don't you think we should know what
those costs are before embarking on such an ambitious long-term
plan to meet gaps in service?
Mr. Gould. Mr. Chairman, first of all, I think the SCIP's
central contribution to the discussion that we want to have
about serving our veterans now and in the future is to
transparently and clearly define how big the problem is. Up
until this point, there were no figures available over a 5- or
10-year period that would have allowed this Committee and
others to evaluate exactly where we were relative to this
problem.
It is an eye-watering number. I frankly admit that. We also
think it is a necessity to be able to build the capital
infrastructure that our veterans need for the future. At the
same time, every Member here would frankly admit that we are in
a tough situation in terms of the budget. Our resources are
constrained. We need to make sure that every dollar we have
counts. And it was with those two needs in balance, both the
large 10-year demand and the near-term constraint on our
budget, that we arrived at a total figure of $2.8 billion for
major, minor, non-recurring maintenance (NRM), and leasing in
our system.
If you do look at that number and look back over the past
decade, it is a number that is about average for our
investment. Can and should we do more? Of course. But in fiscal
year 2012, given the balance of constraints and the need to
deliver current services to our veterans, we believe that we
arrived at the right number for the VA.
The Chairman. But what about activation costs and operating
expenses? Isn't that something that should be factored in that
we should be made aware of?
Mr. Gould. It is very important and you will note in the
budget request, we clearly identify that it is not included.
What we are doing now is developing a model to help us better
estimate what those activation costs are. You will note if you
look at our last 10 years of performance, that building large
infrastructure and major construction has not been something we
have done often. We are opening new facilities now for new
hospitals across the U.S. over the next several years, and what
we found is that our ability to accurately estimate what those
activation costs are has atrophied.
And so in recognition of that, we simply identified in the
model that there were additional activation costs to come,
clearly stating that in the President's budget proposal, and
now what this team is doing is working on developing an
accurate estimate, which we would be happy to share with the
Committee and provide to you.
[The VA subsequently provided the following information:]
The Strategic Capital Investment Planning (SCIP) 10-Year
Action Plan is an important planning tool that identifies
service gaps (geographical access, utilization, facility
condition, space, etc.) and assists VA in planning and
identifying the capital projects (and non-capital solutions) to
close these gaps.
As stated in our budget submission, the SCIP Action Plan
represents a snapshot in time providing the magnitude costs and
specific projects required to meet existing and projected
critical infrastructure gaps, while honoring our commitment to
serve Veterans in facilities that are safe, modern, and within
a reasonable traveling distance for Veterans.
For a given project, SCIP-generated estimates are refined as
the project moves further along in development (action plan
business case
prospectus final design). While activation and
operating costs were not reported in the 2012 SCIP Plan, they
are an important element in VA's planning process. VA is
currently in the process of developing a robust and uniform
methodology for estimating and including these costs in the
2013 SCIP Plans.
The Chairman. I am a slight bit over my time, but I would
like to take the prerogative to ask one question I think all of
us want to hear an answer to. We are currently in ongoing
negotiations to keep the government open and operating through
the end of September. Nevertheless, many of our constituents
want to know how their services might be affected if there is,
in fact, a government shutdown, and we know, with the exception
of VA health care, which is already fully funded for the year,
can you describe for us the effect of a shutdown, what it would
be on VA programs, and certainly as the Chief Operating
Officer, you have a contingency plan in place, and if you
could, let us in on that.
Mr. Gould. Mr. Chairman, first of all, I have tremendous
sympathy for your constituents and frankly our employees as
well, who are quite concerned about the prospect of a potential
shutdown.
The first thing I want to say is, we believe that that
shutdown can still be averted and I know I share the view with
many here in this room that our negotiating teams can take that
action to avert a shutdown.
We are also very grateful for the foresight of this
Congress, prior Congress and Committee in providing a 2-year
appropriation. I think one thing that you would hold up to
Members calling with concern about what might happen to them
that with an advanced appropriation, we are one of the very few
agencies that has about 86 percent of our funding for this
fiscal year already in place, so those operations would
continue without effect.
I don't want to speculate on what activities would be
adversely affected by a possible shutdown, but we have done
quite a lot of work to try to update our plans and get some
insights on that. I could share with you from 1995/1996 that,
to take an example, our Voc Rehab counseling services were not
offered and you can see that for folks looking at reintegrating
with jobs in the private sector who are trying to be employed,
how important that would be, and it was not available in 1995/
1996.
The Chairman. Well, I appreciate your attempt to not answer
the question, however, I do think that you need to speculate,
especially here, particularly on VA construction loans, the
construction programs that are ongoing today, burials at our
national cemeteries, GI Bill recipients, you mentioned Voc
Rehab, disability compensation and pension. I mean, just those
few areas, you know, I just, I don't see how you can't--I mean,
you've obviously speculated somewhere. We are real close to one
of two things, either resolving the issue that's been left to
be resolved or, unfortunately, seeing the government shut down.
Mr. Filner. Can I follow up, Mr. Chairman? When you said
you don't want to speculate, and the Chairman said that we are
a couple of days off, then you must have a plan. If you don't,
I'd send you back right now to do one. Are people going to get
their checks? Are they going to get their services, as the
Chairman pointed out? Who is going to go to work and who is on
furlough? You must have a plan. If you don't, then I guess I
would ask for your resignation now, but come on. The Chairman
asked you a question. You don't want to speculate, but there
has to be a plan. Who is going to be essential? Who is not
essential. Who is going to get their checks? Who is not going
to get their checks? You have to know something about that.
Mr. Gould. Yes. Mr. Chairman, Ranking Member Filner,
obviously there has been a lot of activity to update our
thinking. We are responsible for being prepared for a variety
of contingencies. We are a couple days out from the prospect of
a shutdown. The entire management team at VA shares with you a
concern for our employees and the veterans who might
potentially be affected by a shutdown, but I believe that it is
still possible to avert a shutdown and I hope that the
negotiating teams charged with that and who are taking that
responsibility very seriously can proceed to reach an agreement
unencumbered by any further discussion on potential impact.
The Chairman. If the government shuts down Friday at
midnight and we have funerals and burials scheduled for next
week, what happens?
Mr. Gould. Reflecting back on the 1995/1996 experience, I
can tell you that those burials would continue at a modifying
rate. It might not be possible to conduct every burial as it
was requested in terms of the specific day, but obviously out
of a regard for the seriousness of the issue and requests on
the part of the families in 1995/1996, the government reached
the conclusion that those services would continue.
The Chairman. Mr. Filner.
Mr. Filner. I know this was not the subject of the hearing,
Mr. Under Secretary, but I am very disappointed in the answer.
We have to know more. Some of us are going to argue that it is
necessary to avoid a shutdown. Some are going to argue, no, it
doesn't matter. Every agency should tell us what are the
consequences. Again, is somebody's disability check going to be
cut? Is somebody's disability claim going to be adjudicated, or
not? Are contracts going to be let?
These are rather obvious questions, and surely you have
considered them. So, you have to answer some of them. Do we
have to go down everything, because the Chairman asked you
about burials? So, I will ask you about disability claims or
disability checks. Are they going to be paid or not going to be
paid or, how about the GI Bill? Are they going to get their
checks on time?
I mean, we can go on and on, but you have to give us some
specifics here.
Mr. Gould. Well, perhaps I can be helpful on the disability
claims. Looking back to the 1995/1996 experience where
government went through this very wrenching process in
conjunction with Counsel and after reviewing the Appropriations
language and impact, those checks did flow during that time. So
I just would ask the Committee to recognize that with respect
to our veterans, their health care will be continued by virtue
of the fact that we have an advanced appropriation. About 86
percent of our budget is covered over that 2-year period.
And so as you turn to your constituents with obvious
concern and care, if they are working in VHA, the Veterans
Health Administration, then clearly they fit in a situation
where funding has already been provided to them, so they
would----
Mr. Filner. What percent of the remaining employees will be
considered essential or non-essential, roughly?
Mr. Gould. Well, we don't know what that final number is.
The Secretary will have an opportunity to make a final decision
on that on Friday of this week. We hope that it doesn't come to
that and that the negotiators are able to avert a shutdown in
the hours and days ahead.
Mr. Filner. Well, as I said, I think we need a far more
specific--I think the whole administration should be telling
the Nation what the possibility is or what the situation is so
that everybody knows.
My original question that I asked, I am not sure that I got
a good response to it. If we are estimating in your first 10-
year plan, it is around $6 billion a year, roughly?
Mr. Gould. Right.
Mr. Filner. And you are asking for less than half, plus you
ask for a contingency of about $1 billion. I don't understand
the budgeting process that when you rolled out a 10-year plan,
you didn't ask for enough to fully implement it. You did in the
first year, but we are going to need you to estimate how much
it is for the plan so we get stable funding and we put in the
$6 billion a year or whatever you need. At least that is what I
would think if it was my house or my business. I would be
trying to do that, right?
So you asked for half and then you asked for some
contingency money that the Chairman and I agreed to. We took
your SCIP plan a little more seriously maybe than you did, and
put that money, or suggested that money go into construction. I
still don't understand the process that led to that. There are
going to be constraints every year from now on and if you are
not going to ask for the $6 billion every year, then you are
going to keep falling behind. As I said, your 10-year plan
becomes a 20-year plan, which is what you said you would like
to get. Well, you got it. It is going to take 20 years to take
care of the 10-year efforts and then you will have a new 10-
year plan.
I just don't understand how all that was decided.
Mr. Gould. Let me try to assist on that. First, look, it is
a big number. We know it is a substantial investment on the
part of the country as we look forward. I would point out that
it is about 5 percent of the total amount of money that we are
going to spend over the next decade on our veterans. Current
course and speed, about $1.3 trillion. That is a lot of money.
Now, if we were thinking, to use your analogy of our own
home or our own business, having first tried to clearly
identify what the requirements were, we would then step back
into our current situation, loan capacity, free cash,
availability of funds, and then we would decide on a specific
number and that is exactly what we did. We took into
consideration our big picture, a big aggressive number here
that we need to move forward on and the reality of our current
budget environment.
I think a lot of folks around this table are confident that
our country is going to spring back, that we are going to do
better in the future and that these dollar constraints that we
are facing now are not going to be the same as the ones we face
in out years. As so there is a belief that we will be able to,
in a year-by-year basis, return to the funding question with
the number clearly and transparently stated, a standard out
there for what we need to achieve and each year the
administration will come back and evaluate that and obviously
request funds that we think are appropriate relative to the
other expenses that we have for current medical services
benefits and burial in VA.
So it is not just a pure decision that we make,
construction alone, but relative to the other needs that our
veterans have.
The Chairman. Mr. Johnson.
Mr. Johnson. Thank you, Mr. Chairman. I need to express
also my disappointment in the vagueness of the answer.
Indicating that burials will continue at a modified rate sounds
to me like some of them will, some of them won't, some of them
maybe, and I doubt seriously that that is going to be an
acceptable answer to the families of our veterans or to the
veterans themselves. It is certainly not an acceptable answer
to me, but I will leave it to the Chairman to determine where
we go with that. I am really disturbed by the vagueness of that
answer.
If there are contingency plans, this Committee has asked
what those contingency plans are and all we are being told is
that they exist, but you can give no specifics and no details
on them. I find that particularly disturbing.
As you know, despite the various efforts that the VA has
undertaken to realign its capital assets, it is evident from
the testimony presented here that there is a lot of work to be
done in order to create a more efficient, transparent and cost
effective approach to the VA's capital asset planning, approval
and budgeting process.
We share a common objective of assisting our Nation's
veterans and providing them with the health care benefits and
services that they have earned and are entitled to. It is
unacceptable when resources and funds are being wasted on
government inefficiencies, instead of directly caring for our
veterans. And furthermore, a cost analysis assessment of VA's
construction projects would not only illustrate possible cost
savings alternatives, but is required by law, and I welcome the
opportunity to discuss the VA's construction planning and
budgeting process and to work with my colleagues on this
Committee to address some of these critical issues that can and
must be resolved.
Let me ask just a couple of quick questions. Peter
Heckathorn, Executive Vice President of Sacred Heart Health
Systems in Pensacola, Florida, noted in his testimony,
submitted for the record, that his organization uses an
independent review process that is quite detailed. Has the VA
ever considered using an independent review process to make an
unbiased decision, giving all possible alternatives related to
VA facilities? And if so, why hasn't it been adopted.
Mr. Gould. First, Mr. Johnson, if I could say that the
objective of the SCIP process is exactly what you are calling
for in your preliminary statement there--for greater business-
like approach to our investment decisions. We are doing cost
effectiveness analysis. We are developing a business case, over
930 of them this year alone.
We have set up a board, internal to VA, to evaluate and
stringently review and prioritize each of these investments and
then, most importantly we have applied a set of decision
criteria, six major criteria that are used to rank and
prioritize each of these so that we absolutely are sure that
these are the highest priority, best value investments that we
could make as an agency. So this is the part--the reason behind
SCIP is to get at just the issues that you have identified a
moment ago. We think we are doing it here.
Mr. Johnson. How long does the VA estimate that it will
take to complete the major and minor construction projects that
are ongoing? Do you have a timeline?
Mr. Gould. Let me ask Glenn Haggstrom to give us a sense.
As you know, when we take these on, we spread them out over a
year. There is a reason why we do that. We focus on design
first, make sure we get that right. Once the design has been
done, then when we go to a bid, the construction firms are
clear about what it is they are going to build for us, and then
we can manage the implementation and construction of those
facilities over time.
Mr. Haggstrom.
Mr. Haggstrom. Congressman, when you look at the large
major construction projects, much depends on the scope and
complexity of those projects and the phasing that may be
necessary to complete those projects. When you look at a
smaller facility or a national cemetery, we can look at
probably an 18- to 24-month completion time from the time we
start to turn dirt. For a major medical facility, it is a 36-
to 40-month period of time to complete that facility and turn
it over to VHA for occupation.
Mr. Johnson. Okay. All right. Thank you. Just one quick
follow up because I've only got 20 seconds left. Mr. Secretary,
back to your comments about SCIP and what it provides, would
you object to an independent third-party review of the SCIP
plan to validate your findings?
Mr. Gould. Let me take that question for the record, Mr.
Johnson. I think, in principle, the idea of oversight and
review is welcome. This Committee is engaged in that right now.
We have reached out to our veteran service organizations
(VSOs). We have employed an internal board of subject matter
experts in this area. Our techniques and processes recognized
by the U.S. Government Accountability Office (GAO) are among
the best practiced in government and we have drawn on private
sector input.
However, what we decide obviously has a tremendous
acquisition and procurement sensitivity. So it is with that
simple reservation that I would ask to take the question for
the record and respond to. On a common-sense basis, it makes a
lot of sense. Would we be revealing competitive information on
those major projects? I am not quite sure, and I would ask the
Committee to afford me the chance to provide that answer in
writing.
Mr. Johnson. I will look forward to your answer. I yield
back, Mr. Chairman.
[The VA subsequently provided the following information:]
The Strategic Capital Investment Planning (SCIP) is a process
comprised of the following four components: gap analysis,
strategic capital assessment, 10-year action plan, and business
case. SCIP focuses on identifying service gaps and developing a
plan to significantly reduce/eliminate those gaps over a 10-
year period. This process is data driven, but also includes
input that is qualitative. The end result is a list of capital
projects for the budget year that will contribute to the
closure of service gaps. Each of the four components and the
process as a whole come together in a way that allows a capital
project to be tracked from beginning to end. SCIP also
encourages the use of non-capital solutions where possible. The
Department welcomes an opportunity to demonstrate the
transparency of this process via independent analysis/review.
The Chairman. Thank you very much, Mr. McNerney.
Mr. McNerney. Thank you, Mr. Chairman. I think it is
important what you have tried to accomplish here, looking ahead
10 years, 20 years, certainly with the veterans issues. This is
a long-term project. As we have seen, there are veteran
independents still from World War I and World War II in the
system, so the need is going to continue to grow. There is no
question about it. Let me share one of my frustrations in my
particular district. We have an agreement by the Veterans
Administration to put in a new facility and it took about 2
years for the Agency to decide what county to put it in, and it
has taken another year now that they have decided what county
to put it in, whether to put it in the City of Stockton or
whether to put it in the French Camp area and this is very
frustrating for our veterans who are looking forward to the
service, for the unemployed people that might be employed and
so on. And it is also something that is going to increase the
cost.
Now, you know, every year you delay a project, the cost
goes up by 5 percent or so, so you know, in terms of long-term
planning, I would suggest and I would urge that the
Department--and I am not sure that your Department's directly
responsible here, Deputy Secretary Gould but making timely
decisions is an important function and I haven't been satisfied
with what has happened so far.
I don't know if you want to respond to that or not, but it
certainly had been a frustration of mine.
Mr. Gould. Sir, I just do want to express my concern for
our need on the VA's side to make timely decisions on matters
like this.
We are making those decisions, unfortunately, in an
environment where lots of folks get to second guess and review
and come around a second and a third and a fourth time on all
of those decisions.
So when we use our SCIP process to identify places where we
can put a new facility, we start with a gap analysis that is
rooted in our best understanding of the community needs and the
veteran needs in that location. If you would like a specific
response to the location in your district, I might ask Bob
Neary who is with us today and sitting behind here to provide
you a direct answer to your question about that facility.
Mr. Neary. Thank you, sir.
The Chairman. If you could, use the microphone and identify
yourself, please.
Mr. Neary. Sure. Mr. Chairman. My name is Robert Neary. I
am the Acting Director of the VA's Office of Construction and
Facilities Management. With respect to the site selection for
the clinic, we are very close to doing that. We are in the
final stage of the environmental assessment. The comment period
from public and government stakeholders closes in about a week,
and we will, as quickly as possible after that, make a
recommendation and make the selection of the site.
Mr. McNerney. Thank you. I mean, I hope this isn't always
the case that it takes 3 years to make a decision like this
because it is going to end up costing more and it certainly
makes people frustrated about the VA in general, about its
ability to respond to the needs of our veterans, so please keep
that in mind in your rule making.
I have another question. To what extent do you feel that
having building construction and upgrades accomplished in a
timely and cost effective manner can help reduce homeless
veterans populations? So, in other words, is this process, you
know, impacting the Secretary's prime goal of getting veterans
off the street?
Mr. Gould. Thank you, sir, for that question. Absolutely.
As I mentioned earlier in my remarks, one of our top three
priorities for VA is ending homelessness, so it was natural for
us to look to our capital stock and infrastructure and ask the
question, ``Where could we use these buildings to house
homeless veterans?'' And so we have been doing that and are
continuing to do that. We would ask this Committee for their
help and assistance and making sure that the Enhanced Use Lease
process is reauthorized after this year. If we do not have it
reauthorized, we will put in jeopardy about 1,600 beds for our
homeless veterans, so this is very important. I would ask the
Committee to assist in whatever way possible.
The Enhanced Use Lease, as I described earlier, is a way
where we leverage private-sector investment to be able to
provide these facilities. I think it makes a lot of sense from
a business prospective. And as I said earlier, 1,600 beds at
stake if we can't make this happen.
Mr. McNerney. Well, I certainly would ask that you keep us,
the Committee, the Chairman, myself, informed about this
progress because it is important to myself, it is important to
every Member of this Committee to keep veterans off the
streets.
Mr. Gould. Yes, sir, we will.
Mr. McNerney. And any impediment you feel is not
appropriate, I urge you to contact us and make things happen.
Thank you, Mr. Chairman.
Mr. Gould. Thank you.
[The VA subsequently provided the following information:]
SCIP is a tool used to prioritize capital projects that
contribute to the closure of service gaps and completion of
Departmental initiatives. The decision criteria used to
prioritize those projects is comprised of the many competing
priorities within VA. SCIP decision criteria include
homelessness as one of the Departmental Initiatives and each
project is scored related to how it addresses Veteran
homelessness. The SCIP process includes all Enhanced Use Lease
(EUL) projects, in addition to the other construction programs,
as a way to meet identified service gaps. EULs can assist in
meeting space, energy, condition, and functional gaps, as well
as providing options for homeless Veteran housing. Each
Veterans Integrated Services Network (VISN)-submitted action
plan must include a description of how the VISN will address
the departmental goal of ending homelessness in 5 years. This
may include EUL or other options for addressing local homeless
issues.
As a related capital asset portfolio management tool, VA
undertook a strategic effort to identify and repurpose unused
and underutilized VA land and buildings nationwide in support
of the VA's goal to end Veteran homelessness. The Building
Utilization Review and Repurposing (BURR) initiative is
assessing existing real estate assets with the potential to
develop new housing opportunities for homeless or at-risk
Veterans and their families through public-private partnerships
and VA's EUL program.
The Department's EUL authority allows VA to match supply
(available buildings and land) and demand among Veterans for
housing with third-party development, financing, and supportive
services. This approach has multiple benefits: helping to
reduce homelessness among our Veterans while leveraging an
underutilized asset, reducing the inventory of underutilized
real estate, and transferring the operation and maintenance
costs to a developer. Other internal and external potential
reuse opportunities will be explored for buildings determined
unsuitable for housing.
The entire inventory of unused and underutilized VA land and
buildings is incorporated into the SCIP process.
The Chairman. Mr. Runyan.
Mr. Runyan. Thank you, Mr. Chairman, and I missed it, but
thank you for the moment of silence to our colleague. He was--I
know, personally campaigning against him, he was a great
advocate for veterans and I appreciate that gesture.
Mr. Secretary, I have had similar comments that Mr.
McNerney had. I have a situation, much like I think a lot of us
do, where I represent Joint Base McGuire-Dix-Lakehurst and, you
know, we have a community-based outpatient center (CBOC)
medical facility on the base. How does the SCIP address the
access? I hear from veterans all the time that they like the
facility. I have been to the facility. They say it is suitable,
but it could be better. But the access to our veterans to
actually get on to the military base, a lot of them are
ignoring it and then, you know, we are building the problem,
you know, whether we have enough facilities or they are not
getting to them, are we creating more medical problems down the
road that we are going to have to address, and that is my
number one thing, is access, and is it accounted for in that
process?
Mr. Gould. Let me have a general statement on that, and I
think Mr. Neary might be able to address the specific concerns
that you have for your CBOC. You said in the Lakehurst area?
Mr. Runyan. On the old Fort Dix, yes.
Mr. Gould. On the old Fort Dix. You know, part of what we
are purchasing here, with the big price tag, what everybody
sees topping out at $65 billion, plus the activation cost, is
over 8 million square feet of additional space that over the
next 10 years is going to do a couple of things for us. One, it
is going to move our access from 67 percent up to 70, and two,
it is going to reduce our overcrowding and overutilization of
our buildings from about over 120 percent down to 95.
So the big picture is, we look at the system, where
veterans are going, where their--what their needs are. This
investment is about improving access and building utilization.
Now, in your specific area where that all comes to roost and
your concern for your Members, let me make sure we give you an
answer that we can on the Lakehurst situation.
Bob.
Mr. Neary. Certainly. Mr. Runyan, the SCIP process affords
the opportunity to evaluate the opportunities and needs for
expansion or relocation of a facility and I have to provide for
the record the details about the Fort Dix situation. Be glad to
do that.
Mr. Runyan. I would appreciate it because, you know, it is
a unique situation with the fact that there are over 65,000
veterans in the district, and McGuire-Dix-Lakehurst being a
Reserve Guard post, a lot of those people are going to tend to
stay there after they come out of the conflicts we are in,
creating a larger demand. So I appreciate your answer and I
yield back, Mr. Chairman.
[The VA subsequently provided the following information:]
Veterans access the Fort Dix CBOC by showing their
appointment letter or Veterans Identification Card at the gate.
The Fort Dix CBOC also provides a copy of the daily clinic
schedule to the base Visitor Center the night prior to each
business day. The SCIP submission for the Philadelphia Veterans
Affairs Medical Center, the CBOC's parent facility, proposes
increasing the size of the Fort Dix CBOC in 2013, possibly by
moving off Joint Base McGuire-Dix-Lakehurst and into the
community. Moving off the base would eliminate any challenges
with ease of access to the CBOC. The project is currently under
review and a final decision by VA is anticipated by the end of
Fiscal Year 2011.
The Chairman. Ms. Sanchez.
Ms. Sanchez. Thank you, Mr. Chairman. Deputy Secretary
Gould, in his written testimony, Raymond Kelley of the Veterans
of Foreign Wars (VFW) notes that, ``Community Based Outpatient
Clinics are crucial to meeting the needs of veterans as the
veteran population shift.''
I am wondering if you feel confident that the VA's budget
request and the likely Congressional funding that you will be
receiving will be sufficient to continue to place CBOCs where
they are needed, not just this year or next year, but in years
to come?
Mr. Gould. Ms. Sanchez, thank you for that question.
Obviously, over the next 10 years we believe that our SCIP
investment plan appropriately emphasizes the use of what we
call tertiary, excuse me, primary care. And that primary care,
embodied in the community-based outpatient clinic is really--
the whole purpose of that is to move the point of care closer
to our veterans, to make the access easier for them. Our goal
is to have 70 percent of our veterans within a 30-minute drive
to that facility. So we see a need for an increased number of
CBOCs and increased square footage on our secondary and
tertiary facilities, to be able to meet that combined need.
Ms. Sanchez. Okay. I am pleased to hear that, but I am sort
of a little concerned because the SCIP seems to rely so much on
increased funding in the out years and I am wondering if you
can explain your reason for believing that substantially more
funding is going to become available down the line. I mean, we
are living in very challenging economic times and challenging,
certainly, for budgets at the Federal level.
So I am sort of curious as to why you believe that there
will be more funding later on down the line?
Mr. Gould. Yes, ma'am. And this is obviously a huge need
that we have. It is going to cost a lot of money. And to the
best of our ability to calculate and forecast, this is the size
of the demand that we have for our veterans. We have to step up
to providing these facilities. Our number one priority is to
obviously make sure that those who do go into battle have the
equipment and the training they need and that this VA is there
for them when they return home.
And so this quantification through SCIP is all about saying
this is a very big number, we are going to have to go out and
fund this over a 10-year period. Our assessment of this year's
funds availability, relative to the other services that we have
to continue to provide without interruption was such that we
arrived at the number of $2.8 billion for our veterans in 2012
in this Capital Investment. It will need to be more in out
years, clearly as we go forward, and my hope is that Congress
will be able to find those funds.
Ms. Sanchez. So the hope is that down the line Congress
will fund it at a higher level than now?
Mr. Gould. I am not asking for additional funds----
Ms. Sanchez. No, I realize you are not asking for
additional funding now. But you are sort of relying on the fact
that Congress will be generous down the line and fund it at a
higher level.
Mr. Gould. No, ma'am. The President also will take a look
at his budget for fiscal year 2013, and again, go through the
same process. So there will be a number of opportunities to
step forward with a specific request in 2013 and beyond that we
believe will and can achieve this total investment over a 10-
year period. It is just that numbers in 2012, which obviously
the only numbers that have come forward on the budget right now
are at $2.8 billion.
Ms. Sanchez. Okay. I am not convinced that that is the best
way to budget, but you and I will just have to agree to
disagree on that.
In your written testimony you noted the importance of
Enhanced Use Leases, EULs, in getting homeless veterans off the
streets and into homes, but I am hearing concerns from veterans
back home that not enough of the benefits of EULs necessarily
go to veterans and that veterans would like a more transparent
EUL process in which they can give input and advice. I'm
wondering if you have heard of similar complaints. And whether
you have or you haven't, can you explain what might be, or what
is being done to maybe address that concern.
Mr. Gould. Yes, ma'am. First of all, the EUL, as a I
described earlier, is an incredibly useful tool for VA. Since
about 2006 we have saved a quarter of a billion dollars of
taxpayer money by the use of EULs. What it does is leverage
private sector and NGO investment in facilities that we would
otherwise have to build. With direct capital infusion we can
spread those costs out over time. So it is extremely useful.
I would like to ask Mr. Sullivan to talk a little bit about
the EUL process that we use, how it includes stakeholder input
and how we make sure that there is transparency in the process.
Ms. Sanchez. Okay.
Mr. Sullivan. Let me try and respond to that question about
transparency in the EUL process. All EU projects and EU efforts
require a public hearing. We do it locally at the site and give
notice to all of the interested stakeholders in terms of the
VSOs, in terms of the local community, the local municipalities
or counties or other local elected officials.
We also notify Congress prior to that hearing to make sure
we get the input of everybody, if there are particular issues
that are there. Some EU projects there are relatively no issue.
Other projects there are issues, most of them end up being to
deal with folks, not necessarily veteran groups or veterans,
but local jurisdictions that may have issues in terms of a
homeless veteran project going in and what does that mean for
the community, not necessarily what it means for veterans, but
are there other issues.
If there is a particular issue on the one you talked about,
we would be happy to meet with you and find out what that is.
It is a very give-and-take process of developing of an EU and
we should address that and we will look at that situation.
Ms. Sanchez. I appreciate the offer and I would appreciate
an opportunity to discuss those specific concerns with you.
[The VA subsequently provided the following information:]
At the onset of every proposed enhanced-use lease (EUL)
project, the local VA facility in collaboration with the EUL
Program office hosts a public hearing to allow Veterans, the
community, and other stakeholders the opportunity to learn
about the proposed project and provide input into the
development concept. Once the project is underway, the selected
developer is required to comply with all local and State
building and occupancy codes and ordinances. The EUL process is
designed to afford Veterans and the public opportunities at
different intervals in the project to provide input whether
directly to VA or through the local governance process.
A meeting with Representative Sanchez was scheduled on
Tuesday, May 24, 2011, to continue the dialogue regarding
transparency and input from Veterans on VA's EUL program.
Ms. Sanchez. I am wondering if I can beg the indulgence of
the Chairman for an additional 30 seconds to ask one last
questions of the Deputy Secretary? Is there anything being done
to address the specific needs of homeless female veterans that
you are aware of?
Mr. Gould. Ma'am, let me ask Pat Vandenberg to speak to
that issue. As you know, we have tremendous focus on making
sure that we are building in our capital infrastructure
facility suitable for women that has gone directly into one of
the Secretary's major initiatives in this area, and of course
all of our prevent activities in VHA are focused on avoiding
homelessness to begin with for both men and women and then
obviously the specific intervention in the U.S. Department of
Housing and Urban Development-Veterans Affairs Supportive
Housing (HUD-VASH) voucher process and elsewhere is without
regard to gender.
Ms. Vandenberg. Thank you for that question. Dr. Patty
Hayes is our VHA lead on looking at all issues pertaining to
women's veterans and she has been particularly effective in her
outreach efforts to better understand what the unique
circumstance of homeless women veterans is, what gives rise to
it and she has collaborated extensively with Lisa Pape in the
lead looking at how we develop the actual initiatives and
outreach to get our veterans, including our women veterans into
appropriate housing.
Ms. Sanchez. Great, and I appreciate that, and I thank the
Chairman.
The Chairman. Mr. Bilirakis.
Mr. Bilirakis. Thank you, Mr. Chairman, I appreciate it and
I am sorry arrived a little late. For the plan, I know my
colleagues have asked about what happens, does the Department
have a plan in the event of a shutdown? I know they have asked
about burials, if you can answer that question, disability
claims. How about primary care? I know that it will cover, God
forbid, an emergency situation, but how about primary care for
our veterans? I have a 100,000 veterans in my district.
And also, with regard to the GI Bill, will veterans get
their checks, that is my question, to go to school?
The Chairman. Thank you.
Mr. Gould. Thank you, sir, and I will let my earlier
remarks stand about how much we all want to avert the
possibility of a shutdown, but I take your question
specifically about your Members. As I mentioned earlier, that
primary medical care will be there. We are fortunate enough to
have an advanced appropriation for this fiscal year. What that
means practically is that 86 percent of our operations, which
are health related, will continue, without interruption because
of the advanced appropriation.
And then with respect to your question about the GI Bill,
we are still working through the legal aspects of that. We do
not have a standard from 1995/1996. As you know, the GI Bill is
new, so our lawyers and counsel are working through a proper
interpretation of what the impact of that rationale would be on
our ability to send checks out.
Mr. Bilirakis. One question for Mr. Gould, again. How much
of the VA's property would you deem to be excess or
underutilized and how long does it take to make the
determination that can either be used to meet veterans' needs
or solved? And then I do have a couple more if we have time.
Mr. Gould. Let's see. We have about 830 under utilized
buildings now. One-third of those are empty. Two-thirds of them
are occupied at 50 percent or below, so a significant number of
buildings. That number has dropped in the last 10 years by 30
percent, so we are making progress in that area.
We go through a very detailed process called the BURR,
Building Utilization Review and Reports, and I would like Mr.
Sullivan, if you are interested in additional detail, to
provide some of that for you now. Would you care to have some
additional information?
Mr. Bilirakis. Definitely.
Mr. Gould. Thank you.
[The VA subsequently provided the following information:]
VA had approximately 910 buildings and 10.7 M square feet (Sq
Ft) classified as vacant or underutilized as of Feb. 2011.
Through disposal, repurposing, or bringing buildings back to
full/near full utilization, we have reduced the number of
buildings and square footage considered vacant or underutilized
by 22 and 28 percent respectively since end of FY 2008.
VA has plans in place to address much of the remaining vacant
or underutilized space. Of the current 910 vacant or
underutilized buildings, 430 or 47 percent have an identified
plan in place for reuse, repurposing, or disposal. These plans
will reduce the overall vacant or underutilized square feet to
approximately 5.4 M square feet, which is less than 4 percent
of VA's owned inventory.
VA has 313 vacant buildings. These buildings have no defined
use and are not mission dependent. In contrast, underutilized
buildings still provide veteran services, albeit not as
efficiently as we would prefer. Of the current 313 vacant
buildings, 250 or 80 percent are identified for reuse or
disposal. The remaining 63 vacant buildings account for only
697,073 square feet, less than 0.5 percent of the owned VA
inventory.
To address the second part of the question regarding timing
of actions related to vacant or underutilized buildings, VA
utilizes inventory reviews to identify the best options for
reusing or disposing of the assets. Efforts such as the
Building Utilization Review and Repurposing (BURR) process
specifically focus on identifying and assessing suitable vacant
and underutilized buildings for reuse opportunities to support
homeless housing and other outcomes that provide direct
benefits to Veterans or VA operations. If a given building is
found to be unsuitable for repurposing, other disposal options
are evaluated. Decisions on the proposed disposal or reuse
strategy can take from a few months where there is known need
and opportunity for reuse, to several months to work through
the Historic Preservation and Environmental Compliance
requirements if demolition is the proposed strategy.
Mr. Bilirakis. Please. Please.
With the economy ever changing and costs fluctuating, how
frequently does the VA reassess the feasibility of its priority
projects? How adequately do project cost estimates reflect
actual costs? And one more question. How do you believe the bid
and acquisition process could be revised to realize greater
cost savings on construction projects? How adequately do
project cost estimates reflect actual costs? And one more
question. How do you believe the bid and acquisition process
could be revised to realize greater cost savings on
construction projects?
Mr. Gould. Sir, that is a good list of questions. I hope I
caught most of them. This is an annual process, so the beauty
of what we have done here is for the first time, if it has
three walls and a roof, it is in the SCIP process. It used to
be six different processes. Now, it is one. It used to be
different criteria. Now, there is a common set of criteria and
we do it on an annual basis. How it works is, everybody out to
the field, what are the gaps.
Then we apply the standards, run them through, come up with
a rigorous prioritized list and then each one of those is
required to have a business case associated with it so we can
get in there and take a look at the costs and the associated
benefit of each of those projects. So you can be assured, your
constituents can be assured, that this is a process that we are
doing on a rigorous basis annually.
Mr. Bilirakis. Since I haven't heard, let us get back again
to the shutdown. I asked about the disability claims. Are they
covered under the 2-year budget as well, and then burials?
Mr. Gould. To your first question, there were disability
checks provided to individuals in the 1995/1996 experience, and
I think that is a fair benchmark for the potential for a
shutdown that we all very much would like to avert. And the
second area of interest was the burials. Mr. Johnson made a
similar observation there. Let me be clear in my response.
Burials will continue. What I said was that they would not
continue at the level with the sort of customer service
orientation, being able to fluctuate, but that we would have to
identify an average number and then have people on board to be
able to do that.
What that means practically for someone that experiences a
death in their family, that called up and were one of the last
to call and say I want a burial to occur on Monday, it might
have to occur the following day. So, based on the numbers we
have, would be some shift in terms of schedule and time, but
could they bury their loved one with appropriate last rites and
so forth? Of course.
Mr. Bilirakis. Okay. Thank you very much. And I may have
some additional questions, I would ask you to respond. Thank
you so much. I appreciate it.
Thank you, Mr. Chairman.
The Chairman. Thank you, sir.
Ms. Brown.
Ms. Brown. Thank you. Thank you, Chairman Miller and
Ranking Member Filner for holding this hearing, coming from
Florida with one of the largest elderly populations in the
country, we desperately need as much construction as possible.
With the country at war and more and more veterans
returning from active duty and from combat, it is ill advised
to be closing facilities or trying to balance the budget on the
backs of those who have given so much to protect the freedom we
hold so dearly.
I have a couple of questions and I don't know whether you
have the answers now but, one, I am concerned about the time
table of the Jacksonville VA clinic. You can get back with me
on that. There has been some problems with the developer and I
would like an update on that.
[The VA subsequently provided the following information:]
The timetable was provided in a meeting that occurred on
April 26, 2011.
Ms. Brown. And also, I am pleased to know that the Orlando
Medical Center is on track to be completed by next fall after
27 years of working to get this project online. That is just
totally unacceptable and the veterans of central Florida
deserve more.
But I want to get back to the shutdown and I know it has
previously been discussed but I am not completely pleased with
the answers or feel that I have gotten the comprehensive
answers, based on what I have heard.
When we pass advanced appropriation, I thought that the
veterans would be out of the politics of shutdowns and
Continuing Resolutions (CRs) and all this foolishness. My
question has to do with, not whether the checks would go out,
but the processing of the claims of which the backlog we
discuss all the time. Will someone be there to process the
claims?
Mr. Gould. Ma'am, first of all, thank you and this
Committee and Congress for its foresight in providing an
advanced appropriation for VA.
As you just said a moment ago, it really does, I think,
fulfill our commitment to veterans when we have the money to be
able to do that on a 2-year basis. It has led to, I think, a
lot better behavior in terms of the budgeting process and we
can now turn to our veterans on the eve of potential shutdown
and assure them that with respect to health care, 86 percent of
the dollars in the VA budget have already been appropriated for
this year, and so that does protect them and pull them out of
that situation and all the doubt and angst that is quite
rightfully going on right now among our veterans.
So we thank Congress for that advanced appropriation and
believe it does address their health care needs for this fiscal
year.
Ms. Brown. What about the pension and other programs?
Mr. Gould. That is an area where in the past, in 1995/1996,
those checks did go out, as I said earlier to the Chairman and
the Ranking Member. Our plans are not complete. At VA we have
been taking prudent action to update those in the unlikely
event that a shutdown occurs.
Ms. Brown. Not unlikely.
Mr. Gould. Well, yes, ma'am. I certainly share your hope
and view that it doesn't happen, that we can succeed in
averting a shutdown. I don't think it serves veterans well to
subject them to that uncertainty, but we continue to update and
to prepare to take all the precautions that we possibly can to
be ready for that possibility.
Ms. Brown. What about the claims process?
Mr. Gould. Ma'am, in 1995/1996 the claims process, the
checks came out. If you are referring to new claims that come
in----
Ms. Brown. Yes.
Mr. Gould. Two things happened there in 1995/1996. One is
we made sure that under a standard of, called, property rights,
that an individual, there is somebody there to stamp the
receipt of the claim when it comes in because as you know, the
dollars go all the way back to the date they got the claim in.
So to preserve their right in that property, we will have
somebody there stamping those when they come in.
Now, it is a different matter to actually be moving forward
on new claims and those decisions that have not been made yet.
Ms. Brown. Well, thank you very much. I think my time is
almost up, but. I think it is a direct correlation between what
we did in December as far as giving billionaires tax cuts and
now we are wondering whether or not we have the money for the
pension checks for veterans. It is a direct correlation between
what we did in December and what is happening here today
regarding this government shutdown. Thank you, and I yield back
the balance of my time.
The Chairman. Dr. Roe.
Mr. Roe. Thank you. I don't have many questions, but just a
couple of things. One, did you have a plan in 1995 and 1996, or
did you just sort of fly by the seat of your pants since most
people didn't see it coming?
Mr. Gould. Sir, we believe, testified, the VA testified in
1995/1996 about the plan that they--and the approach that the
Administration took at that time, so there is in the
Congressional Record a list of the steps that were taken and it
is, I think, a great place to start to answer some of the
questions on what might happen in a shutdown.
Mr. Roe. I share your ``we don't want to do that'' mindset.
I think that would be bad. And you said 86 percent, so if a
veteran is going to the clinic, they can continue to go to the
clinic. Am I correct on that?
Mr. Gould. Yes, sir. If I heard properly, the hospitals
will be open and a person can get that care.
Mr. Roe. And the clinics? And the CBOCs?
Mr. Gould. And the CBOCs, yes, which is the primary care
arm of----
Mr. Roe. Sure. I am a veteran, so if I decide if I need to
go to see my appointments next Monday and for some reason if
the government shuts down, I can go keep my appointment. That
is number one.
Mr. Gould. Yes, sir.
Mr. Roe. And number two, is that it sounds like that the
pension checks and those sources of income are going to
continue to flow, that veterans can also be at a veteran's
funeral. Certainly, that is a very bad time to have a family
concerned about that and we need to allay that concern right
this instant. So that continues to happen.
Eighty-six percent of the funds were health care. What is
the other 14?
Mr. Gould. Sir, that would be the other two major
administrations within VA, the National Cemetery Administration
(NCA) and the Veterans Benefits Administration (VBA). And some
of our discussion has gotten to the VBA and the NCA elements.
Mr. Roe. Will research projects that the VA is currently
involved in continue to be funded and moved forward?
Mr. Gould. Sir, I do not believe that R and D is fully
covered. There are, of course, the government has a set of
investments in making sure that, for example, lab animals have
been fed and that no human being would ever be put at risk. I
think that, you know, in details of the criteria that are used
to decide whether or not and to what extent to shut down R and
D, that that would be obviously addressed in the plans that
should be in place by Friday of this week, if we have to go
there.
Mr. Roe. If we have to go there. Thinking back to the
bricks and mortar, there is certainly a need to update your
facilities. I like the idea that we have a long range plan and
it is debatable on how that is done, but there is no question
the VA hospital at Mountain Home where I live is continually
being updated and needs to be. You have to do that and you have
to have those maintenance funds in there to keep the
facilities--and they are constantly changing because the needs
of care constantly change. What we can do for people constantly
changes.
Mr. Gould. Sure.
Mr. Roe. So I think that is a good thing. The other thing
that I would like to recommend the VA do is look for more
partners because in my particular district, for instance,
Sevierville, Tennessee, has a hospital they just closed and
they opened a brand new $120 million hospital right across the
street. They are willing to let the VA use that facility for
our CBOC for a dollar a year, and there are plenty of partners
like that out there, I think, that would be willing to do that.
I believe really want to serve veterans and I would strongly
encourage you to look for those partnerships in addition to the
things that you currently--and you may be already doing.
Mr. Gould. Sir, it just underscores the fact that whenever
we take a look at medical facilities, health care facilities
across the country, 152 major medical centers, typically it is
going to be one of the major businesses in that community,
certainly one of the top three to five. As a result, it is
jobs, it is the physical infrastructure, it is the connection
with the community, it is the services the veterans get there.
So we want to proceed carefully and we want to proceed with
information like that that you have just provided about
partnerships and the availability of those as we develop our
SCIP plans.
Mr. Roe. Well, to Ms. Brown's comments, I agree completely
with her that certainly we do not need to step away from our
obligation to our veterans. They don't need to be involved in
this. I certainly want to thank the Ranking Member for his
support and Mr. Miller, our Chairman, for the advanced
appropriations that has made whatever happens this week a lot
easier.
The other thing that I want to comment on is the
homelessness issue. That is one of the things that I certainly
have become very interested in. The fact that we are not
getting as many of our HUD vouchers out that we have available
and yet don't have housing available is inexcusable. I mean, we
had it, but we don't have veterans in the housing. Is there any
urgency? I know we are doing a veterans count where I am to try
to find out what is the actual number of homeless veterans. I
realize that is a moving target. But we are trying to find that
number out so that we know what the need is. I am disappointed
when I hear that we have homeless veterans that we have 10,000
HUD vouchers out there that are not being used.
Mr. Gould. So sir, a couple of months ago I was out doing a
homeless count here in Washington, DC, about 8:00 p.m. to 2:00
a.m., I was just struck by how much suffering goes on in the
streets in the cities across America. We are making an effort
to make sure we have an accurate count for that, and as you can
see in the fiscal year 2012 budget, enormous resources are
being applied in this area.
Our whole goal is be able to eliminate, to end veterans
homelessness by 2015 and we are hard at work on that.
Mr. Roe. Thank you. I yield back.
The Chairman. Mr. Reyes.
Mr. Reyes. Thank you, Mr. Chairman. And I thank you and the
Ranking Member for having this hearing and I apologize for
being late, but I came from another hearing. I wanted to make
sure that I understood what you have testified to here this
morning. Has the VA issued guidance for designating essential
and non-essential personnel at all of the locations?
Mr. Gould. No, sir, we have not yet. We still view a
shutdown as something that can be averted. We have continued to
update our plans continuously over the last months and weeks to
try to make that decision-making process, should it be
necessary, go smoothly, but we have not issued guidance to the
field at this point.
What we are most concerned about is obviously our employees
and our veterans. We want to be able to communicate clearly and
well with them, should this decision be made, but it has not
been made yet and we don't want to color the water with
information that we hope is not necessary.
Mr. Reyes. When will you be making that decision?
Mr. Gould. Congress will have a lot to do with that, the
negotiations that are ongoing right now. If we do get
resolution of that, obviously that would affect our time table.
But if there is no action from a budgetary standpoint and the
negotiations do not produce either a CR or a bill that gets
suspended to the end of the year, then we would be likely to
make that communication on Friday, which would be the day of,
the midnight Friday, as you know, the end of the continuing
resolution.
Mr. Reyes. So you will issue guidance during the day
Friday, is it on midnight Friday? I ask this question because
veterans in my district are very concerned.
Mr. Gould. Sure. They want to know.
Mr. Reyes. And so far there has not been any guidance
provided to the local facilities.
Mr. Gould. That's correct.
Mr. Reyes. And I think if you are talking about issuing it
on Friday, how can you reassure the Committee that there will
be sufficient time to give notice to people that are on
vacation, people that are working shift work, all those kinds
of things that need to be planned out before executing that
plan.
Mr. Gould. Yes, sir. There are a lot of complexities on
this. Fortunately, the law is written in such a way that it
allows the Administration the flexibility to affect an orderly
shutdown. Our belief is that it can be done in an orderly way
and that we do not want to provide additional and unnecessary
information and communication that would cloud the central
issue, which is our desire to avert a shutdown.
Mr. Reyes. So next Monday if there has been chaos in my
facility in El Paso--but that is after the fact. Veterans are
very concerned right now, and there needs to be some kind of
reassurance that the Veterans Administration is on top of this
and that the local director will move forward based on your
guidance with designating essential and non-essential
personnel--I went through this twice when I was in the border
patrol, so I can tell you it is a very disruptive situation,
and people who get designated non-essential get upset and
morale is affected in the local facilities. So there has to be
some reassurance from the headquarters, from the national
administration, to be able to let people know what is coming,
if it comes. We can't wait until Friday to do that, at least I
would not recommend that.
Mr. Gould. As somebody who has been through this process in
1995/1996, served at Treasury at the time, and I was intimately
involved with that. It is enormously disruptive.
Mr. Reyes. It is.
Mr. Gould. It has a negative effect on morale. It has a
negative effect on the services that we provide to taxpayers.
So for many reasons personally I would like to avert a
shutdown.
Our management team is on top of the issue. Just a moment
ago you said, ``Is there some assurance?'' Absolutely. I think
folks who know Secretary Shinseki know a leader when they see
one and who is thinking about the impact on his troops
throughout the organization and our veterans.
So absolutely, positively there has been extraordinary care
in updating and revisiting our contingency plans for a
shutdown. And then finally I would say for your Members who are
particularly concerned about health facilities, as I mentioned
earlier, the health facilities will be open because we have an
advanced appropriation that provides funds for that period.
Mr. Reyes. We know that they will be open, but staffing is
the issue in terms of designating essential----
Mr. Gould. All the staff, all the staff will come in, sir.
Mr. Reyes. So everybody would be essential?
Mr. Gould. Yes, sir. And what I mean by advance
appropriation for VHA is that all of the--every single one,
every single one of the normal operations that go on, the
people, the doctors, the nurses, the deliveries, the cleaning,
the food and canteen, et cetera, will be done because we have
an advanced appropriation and I thank this Committee and
Congress for providing, having the foresight to provide that.
It really does, as Ms. Brown mentioned earlier, pull our
veterans back with respect to their health care knowing that we
have a 2-year advanced appropriation.
Mr. Reyes. Okay, well, I am going to issue a local
reassurance based on what you are telling me here this morning.
Mr. Gould. Yes, sir.
Mr. Reyes. Okay. Thank you.
Mr. Gould. Yes, sir.
Mr. Reyes. Thank you, Mr. Chairman.
Mr. Gould. Thank you for doing that.
Mr. Reyes. Thank you.
The Chairman. I think I have heard you say that 86 percent
of your budget is basically protected. I have heard four or
five Members specifically ask you questions regarding a
potential shutdown. You are, in my opinion, being secretive and
vague. Look, the Committee on House Administration is putting
out information today, tomorrow, so that people will know. I
mean, certainly people in that 14 percent know that they are in
there.
What happens on, I mean, Friday at midnight if the
government shuts down, you have 300,000 employees out there,
second largest in the country. How do you contact all these
people, you know, over the weekend? How does that work?
Mr. Gould. Very quickly and very carefully, sir. In 1995
and 1996 we did it without essentially email and without the
web. Now, we have that. Believe me, we have the attention of
all of our employees. They are obviously concerned, nervous,
anxious about the lack of certainty in this situation.
And so, the question you are asking me, sir, is how will we
communicate to folks. We have a draft strategic communications
plan that will make that possible, and we also know that there
is certain flexibility in the law that allows for an orderly
shutdown, which would include employees coming in on Monday
just as they normally do, to sit down with their supervisor and
manager and get letters and information that would help explain
what has happened, tell them what it is that they need to do
and how they need to do it to comply with the law.
The Chairman. Ms. Buerkle.
Ms. Buerkle. Thank you, Mr. Chairman. I just have a couple
of follow-up questions from the discussion we are having
regarding potential shutdown because I am just a little bit
confused and maybe you can clarify it for me. I heard my
colleague, Dr. Roe, ask specifically if veterans had to be
concerned about having access to health care, and if they had a
problem, to go in and it would be available. And then I heard
you say that the staffing was also included in that advance
funding.
So what is the contingency going to do? What are the
aspects of the care and all of the veteran services that are at
risk here if there is a government shutdown?
Mr. Gould. Yes, ma'am. You can picture sort of a flowchart
that we are required by law to go through. The flowchart starts
with the concept of do you have funding. If the answer to that
question is yes, a shutdown does not apply. In the case of VHA,
we have an advanced appropriation, so every employee
conservatively 285,000 of the people who work at VA, will be
showing up to work under an advanced appropriation in the same
way that they are working today.
Mr. Filner. Now, that means 40,000 employees won't be?
Mr. Gould. Now, Mr. Filner, it does not because of the
complexities of the law that proceed from there. So you have
asked earlier who would be engaged in this very detailed update
process----
Mr. Filner. So it is 30,000? That is a lot of people.
Mr. Gould [continuing]. That the law requires has a lot of
intricacies on this issue. And so we move through a series of
decision criteria that get us from, ``do you have funding or
not,'' to ``is life and property at stake,'' to ``are certain
property rights that would otherwise be lost on the part of
veterans need to be preserved,'' and the like. We work through
that logic chain to come up with a final number.
So if there was ambiguity in my communication in response
to Dr. Roe, about whether our veterans could get health care
after a shutdown, I want to eliminate that and remind you that
we have an advanced appropriation and that VHA, which is one of
the three principal operating units within the VA, will be open
for business welcoming our veterans and caring for them for
whatever need they have.
Ms. Buerkle. Thank you. I yield back.
Mr. Gould. Yes, ma'am.
The Chairman. If a veteran is listening or watching on the
Web today, they have to think this shutdown isn't going to
affect them. Basically, your comments today lead this Committee
to believe that there is not going to be a negative effect on
VA. Is that true?
Mr. Gould. No, Mr. Chairman. I wouldn't say that.
The Chairman. Well, would you please give us the negative
effects a shutdown would present to VA? You have told us over
and over the positive.
Mr. Gould. Right.
The Chairman. The 86 percent.
Mr. Gould. Right.
The Chairman. Would you tell us the negatives?
Mr. Gould. Right. So your general question is, will there
be negative impacts on veterans? I have given you three
illustrations already from the 1995/1996 experience and let me
just review them. The first is the Voc Rehab Counseling. Those
appointments will not be processed. They will not be ongoing in
VA, so our veterans who need assistance in taking on a new
career or finding a new job or getting help to seek employment
will not be able to have that service if the 1995/1996 guidance
stands.
The Board of Veterans' Appeals, case processing and
hearing, they are going to be delayed. They were in 1995/1996.
We think that there is strong guidance there and, of course,
maintenance on our national cemeteries will also come to a halt
even though individual burials are likely to continue.
So I realize that it must be frustrating to you for me not
to go through chapter and verse. I would say that those
decisions are very sensitive. They are the product of long
deliberation inside VA and they have not been made yet. They
will be made on Friday. Our plan will be finalized on Friday if
it is necessary, and my fervent hope is that those plans are
not necessary and that we are not in a situation where we have
a shutdown.
I am trying to find an appropriate balance between saying
that there is no effect, to your comments a moment ago, that is
not true, and the reality that with an advanced appropriation,
much of what we do will go forward unchanged. And so if I can
articulate that in the right way for this Committee, we have to
find that balance in communicating with our veterans not
without cost to----
The Chairman. You said, ``much of what you do wouldn't be
affected.''
Mr. Gould. Yes.
The Chairman. So is it fair to say that little of what you
do will be negatively affected?
Mr. Gould. Yes, sir. I think on a dollar basis and an
employee basis, that would be a fair conclusion.
The Chairman. Ms. Brown.
Ms. Brown. Thank you, Mr. Chairman. First of all, I think
you can tell something about an organization, a group, or
Congress or whatever how they spend their money, and the
decisions that were made in December affect what is happening
now. In addition, the fact is, we should have had a year's CR
so we didn't have to put the country in this uncertain
situation, while we figure out where we want cut or the best
way to balance the budget or whatever we are trying to do.
But, you know, we practice what I call reverse Robin Hood
around here, robbing from the poor working people and veterans
to give tax breaks to the rich. But saying that, let me just
say I am still concerned. You've talked about the plan for
1995/1996. This is 2011, and I want to know what plans, what
contingency plans do we have because some of the things I am
thinking about are homelessness, housing. I mean that is major.
A few weeks ago in Jacksonville, I read in the paper that
they discontinued the meals for homeless people. One-third of
those are veterans. I called a meeting with the Department of
Agriculture to find out what could we do to assist veterans
right there in that clutch. I mean, we are making decisions
that are affecting the poor people and there is no safety net.
Mr. Gould. So, ma'am, if there is any veteran that you know
of, are aware of or that your constituent office can put us in
touch with, we would love to have that contact information, get
help to them. The funding for our homeless services in VA has
not been affected. In fact, as you know, for our fiscal year
2012, R-10 enacted, it has actually grown, so we are engaged in
the work every day of ending veteran homelessness and
preventing veteran homelessness.
So if there are veterans out there that we can reach out
and help, that is what the taxpayers invested in the VA to do
and we would be more than pleased to reach out to those
individuals.
Ms. Brown. I have several of my district staff up here.
Maybe we can meet with the VA because I wish it was one name,
one person. It is a list. When I pass by my office, the line is
wrapped around the buildings trying to get a meal, and it is
more than a meal. I mean, the problem, one of the major
problems is not just whether or not they get the lunch. It is
the fact is they need the mental health counseling. We need to
be coordinating with other non-profit agencies to help the
veterans, and for some reason we have not been able to make
that happen, and so, I mean, whatever we could do.
I wish it was one name. If it was that one name, I would
take care of it myself.
Mr. Gould. Yes, ma'am.
Ms. Brown. But it is wrapped around the buildings.
Mr. Gould. That is why we have instigated new programs in
VA for homelessness that try to bring all the NGOs, State and
local government together into a single service point so that
our veterans can enter the building. If the day starts, get a
health care checkup, a dental checkup, get a review to see if
they have any benefits, get a new set of boots and a jacket,
get a meal, get a shower.
So we are focused on trying to create input for our veteran
homelessness and would more than welcome the opportunity to
have that conversation with you and your staff to deal with
this group of veterans.
Ms. Brown. Thank you. You need to know we want to help.
Mr. Gould. Yes, ma'am.
Ms. Brown. I participate in the stand down. I have a job
fair that I have over 10,000 people attend that is coming up. I
have different groups that will work with the homeless
veterans. I mean, I do my part, but it is going to take a team
effort, and you know, I commend the Secretary but it just is
not one veteran. I wish it was. But the system is not working
yet for that veteran that has that problem, that needs that
counseling and we just--we can't just do it, VA. It is going to
take a coordinated effort between the VA and those non-profits
in the community, to give them that support that they need.
Mr. Gould. Yes, ma'am. I just would add that 2 years ago we
were at 131,000 homeless veterans, we are at 76,000 now. We
think that number is going in the right direction. At the end
of the day, it is about every single individual until there are
none of them on the street. That is the goal that we have. That
is the goal that we have set to end the homelessness among our
veterans.
[The VA subsequently provided the following information:]
Homelessness and coordination with other non-profit agencies
was discussed at meeting on April 26, 2011. Ongoing efforts
will continue.
Ms. Brown. My last question, and I love the Secretary, but
what is the 2011 plan in case we shut down Friday? Not 1995/
1996, I was here then. I want to know what is the plan for
2011.
Mr. Gould. Yes, ma'am. As I said earlier, we are working on
a daily basis to update our contingency plans, working to be as
thorough and as careful as we can, but not to encumber the good
work of the negotiating teams that is underway right now. It is
my hope that we do not shut down government, as I tried to
explain here today, largely unaffected with respect to veterans
because of the advanced appropriations but not without negative
effect. And obviously, I would prefer not to be in a world
where we have a shutdown.
So we continue to update that contingency. The Secretary's
plan is to approve and finalize on Friday, should it be
necessary. And believe me, his staff, myself included, have
done the work, are continuing to do the work that will be
required to put him in that position to make the decision.
Ms. Brown. Thank you. Thank you very much. And it is your
hope and plan, and it is my prayer. Thank you.
Mr. Gould. Yes, ma'am.
The Chairman. Ms. Brown, I will tell you that we will be
authoring a letter that I welcome any Member of this Committee
to sign on to to the Secretary asking for an immediate brief on
what their plan is in regard to the shutdown, potential
shutdown.
Mr. Reyes. Mr. Chairman, could I----
The Chairman. We got another Member that has not had a
chance to ask their first round of questions.
Mr. Reyes. Okay. All right.
The Chairman. So I would recognize Mr. Stutzman.
Mr. Stutzman. Thank you, Mr. Chairman. Mr. Gould, thank you
for your willingness to be here and for your testimony. In your
witness testimony you emphasize that if veterans and their
families do not have access to the VA, they cannot avail
themselves of the services and the benefits that they have
earned while serving our country. I could not agree more.
In the coming days and weeks, this country will be making
some very difficult decisions, that at the same time there are
obligations which must be met prudently and honorably. I would
add that the accessibility you have emphasized must be
convenient and excellent. Could you please share with the
Committee the evaluation process for existing facilities like
the one in Fort Wayne, Indiana, and the vetting process for
proposed improvements there?
Mr. Gould. Thank you. I would be happy to do that. Just
probably to refresh on the process that we use now for all
facilities and there are specific issues around Fort Wayne,
perhaps we can be responsive to you.
We start with a gap analysis in the field, working to make
sure that we have access, the facility conditions themselves,
whether there is any additional space, surplus space that might
be available in the community. We look at the utilization of
those facilities and we also look at the energy needs of the
facilities in terms of their condition.
We then take a look at that, vis-a-vis, our standards. We
identify a gap. And where there is a gap, we put together a
business case and it enters the SCIP process. Once it is in the
SCIP process, it goes through a rigorous review against six
criteria. Some of those criteria include safety and security,
fixing what we have, increasing access, right sizing inventory
and so on.
It is then aggregated. The best of the best, the ones that
have the highest scores, go before a nine member SCIP panel.
Those then are identified--the very top priorities relative to
our capacity to pay in terms of the budget--and then it joins
the budget process and it is reviewed by me and ultimately by
the Secretary before it goes to the Office of Management and
Budget (OMB). So it is a very rigorous and thorough process.
If you are interested in some additional specific
information about your district, we could perhaps get some help
from Mr. Neary who is our expert in this area.
Bob, do you have any additional prospective on the Members'
request? Would say again the location?
Mr. Stutzman. Fort Wayne.
Mr. Gould. Fort Wayne. Yes.
Mr. Neary. Yes, sir. Again, my name is Robert Neary, Acting
Director of VA's Office of Construction and Facilities
Management. We have identified a Fort Wayne facility in our
authorization request that is in the budget and capital plan
volume. When authorized, we would proceed to identify a
geographic area within the Fort Wayne area to search for a
site, identify a site, acquire a transferrable purchase option
on that site, and then compete for a developer, a development
team to build and lease back to the VA the facility, likely for
20 years.
Mr. Stutzman. Is there a possibility of an existing
facility that is already currently built that might be a
possibility as well, or are you looking to build a new
facility?
Mr. Neary. In each case we would look to see if there are
potentially existing facilities available. It is our experience
that on a sizeable clinic such as this, that it's typically
better to construct new in order to get the functionality and
capabilities and meet energy requirements and that sort of
thing, but if there were a facility available in the area, we
would look at it.
Mr. Stutzman. Okay. And then what about, has the option of
a public/private partnership, has that been discussed or
thought about with the Fort Wayne facility in particular?
Mr. Neary. I am not sure about that. We would have to get
back to you on that.
Mr. Stutzman. Okay. All right. Thank you very much. Mr.
Chairman, I just yield back.
[Hon. Joan Evans, Assistant Secretary for Congressional and
Legislative Affairs, spoke with Congressman Stutzman on April
25, 2011, and answered his questions.]
The Chairman. We have one more panel that we have to hear
from. Mr. Reyes has asked if he could ask another question. I
know the Ranking Member wants to ask. Anybody on our side?
Mr. Reyes.
Mr. Reyes. Mr. Chairman, thank you very much. I was going
to recommend if you would be willing, in the current proposal
for voting on the CR this week, we are funding the Department
Defense (DoD) for the year. Would you be amenable for us to
send a letter to Chairman Rogers that they might want to
include the VA in there because I don't know about your
district, but in my district, veterans are very, very concerned
about the impact that a shutdown would have on them.
And the second thing is, any cutbacks that might affect
veterans. I don't know if you or the Ranking Member----
The Chairman. The only question that I would have, and I
like the idea, obviously we are funded through VA/HUD, the
Appropriations Subcommittee. Let me just look at it and just
see what it would be.
Mr. Filner.
Mr. Filner. Just quickly if I may. You threw out the
figure, the first I have heard of it, of 76,000 homeless
veterans left. I haven't heard that. I would be pretty
skeptical that we got it down to that level, but you might give
me some backup on how you got to 76,000. That seems very, very
low.
Second, I just want to throw an idea for all of you because
we tend to separate the facilities from the substance of the
health care. Although of course, you state that you must have a
good facility to have good health care. I was reminded of that
because Mr. Carnahan was here for a few minutes. There is
roughly $500,000 or $400,000 going into renovation at the
Cochran Medical Center in St. Louis.
At the same time, you have enormous personnel problems. The
hospital is one of the lowest in patient satisfaction in the
whole system. I just want to throw out for your thinking, Mr.
Under Secretary, that you use not the lever, but the occasion,
of new construction and upgrades to say that now is the time to
also change the personnel a little bit--to upgrade that.
That is, you just say to the community that we are changing
the facility, but we want to make sure that we are also getting
in better personnel.
I just throw that out as a way to tell the community we are
working on a whole lot of things because it is happening in
different places in the country. That is just one I was at and
understand better than most. There are a lot of complaints. Why
not use the fact that you are going to renovate the personnel
structure also?
I know there are all kinds of civil service procedures that
you have to take into account, but it seems to be an excellent
opportunity to say to the community that we are renovating
everything. So just keep that in your thinking if you will.
Thank you, Mr. Chairman.
[The VA subsequently provided a VA News Release, entitled,
``VA & HUD Issue First-Ever Report on Homeless Veterans,
Assessment Key to Preventing and Ending Homelessness,'' dated
February 10, 2011, which appears on page 58, and a report
entitled, ``Veteran Homelessness: A Supplemental Report to the
2009 Annual Homeless Assessment Report to Congress,'' which
will be retained in the Committee files.]
Mr. Gould. Thank you, sir.
The Chairman. On behalf of the full Committee, thank you
for taking time to talk to us today about construction today
and in the future, also about things as we look forward to what
may happen or may not happen on Friday. We appreciate your
being with us today. Thank you. You are excused.
Mr. Gould. Mr. Chairman, thank you very much for the
opportunity to address the Committee on this important issue.
Big dollars, but we think great goals, 70 percent access, 95
percent utilization. This is what we are about, taking care of
our veterans and I, like you, certainly hope that we can do
everything we possibly can to avert a shutdown.
The Chairman. Thank you.
I would like to go ahead and ask the second panel, if you
could, go ahead and approach the table.
Members, we welcome Ms. Lorelei St. James, Acting Director
of the Physical Infrastructure Team at GAO and Raymond C.
Kelley, Director, National Legislative Service at the Veterans
of Foreign Wars of the United States.
Again, each of your written statements will be entered into
the record and you will each be recognized for 5 minutes.
Ms. St. James.
STATEMENTS OF LORELEI ST. JAMES, ACTING DIRECTOR, PHYSICAL
INFRASTRUCTURE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE;
AND RAYMOND KELLEY, DIRECTOR, NATIONAL LEGISLATIVE SERVICE,
VETERANS OF FOREIGN WARS OF THE UNITED
STATEMENT OF LORELEI ST. JAMES
Ms. St. James. Chairman Miller, Ranking Member Filner, and
Members of the Committee, good afternoon. I am pleased to be
here today to talk about GAO's recent work on VA's capital
planning efforts.
As you are aware taking care of veterans is a very
important mission. VA has thousands of facilities to provide
health care and other services to millions of veterans.
Today I will cover two topics. First I will talk about the
steps that VA has taken to improve its capital planning process
and the challenges it still faces today.
Second, I will talk about the need for VA to provide
Congress more information about future project priorities and
costs.
As discussed in our January report, for well over a decade,
VA has taken three major steps to realign its real property.
The first step taken in 1999 was VA's development of the
Capital Asset Realignment for Enhanced Services or CARES. CARES
was the first long-range assessment of VA's health care
priority since 1981. More importantly, it identified changes in
real property that VA needed to make in order to close gaps in
veterans' care. For example, it recommended that VA close some
hospitals and open smaller more accessible clinics. The second
step taken in 2004 was VA's development of its 5-year strategic
capital plan. In this plan, VA incorporated many leading
capital planning practices. For example, it evaluated different
alternatives, such as leasing, repairing or building new
facilities to meet needs.
VA's third step to improve its planning efforts was taken
in 2010. It is VA's new planning process, the Strategic Capital
Investment Planning process or SCIP.
Under SCIP, VA ranked and selected capital investments
across the organization using weighted criteria and it expanded
the 5-year planning horizon to 10 years. We believe these are
improvements in VA's capital planning process. Between 2004 and
2009, vacant space owned buildings, vacant buildings, and a
number of hospitals was reduced. In addition, in April 2010, VA
reported that it had opened 82 of 156 planned community-based
outpatient clinics.
However, despite these improvements, challenges remain. For
example, in its 5-year plan for fiscal years 2010 through 2015,
VA reported a backlog of $9.4 billion in repairs, and 24 of the
69 ongoing major construction projects listed in the plan
needed an additional $4.4 billion to complete.
In prior GAO reports and still applicable today, some of
the reasons for these challenges include difficulty in getting
stakeholders to agree on identified changes and the need for
better project cost estimating.
Lastly, VA could provide Congress more information about
its future priorities and costs. We feel this is important
because VA has identified future project costs in the tens of
billions of dollars. Providing this information, particularly
in a long-term fiscal crisis would allow Congress to weigh
current budget decisions against future costs. We recommended
that VA provide you this information and VA agreed.
In closing, Mr. Chairman, we believe VA has taken steps to
improve its planning process. However, it remains to be seen
that VA's new planning process will be successful. Its success
is critical because VA faces the need for billions of dollars
to better meet current and future veterans' needs.
Using a transparent data-driven planning process will help
VA better articulate its needs and assist the Congress in
weighing the needs of veterans against other critical national
needs.
Thank you. I am happy to answer any of your questions.
[The prepared statement of Ms. St. James appears on p. 46.]
The Chairman. Mr. Kelley.
STATEMENT OF RAYMOND KELLEY
Mr. Kelley. Thank you, Mr. Chairman. On behalf of the 2.1
million members of the Veterans of Foreign Wars, thank you for
inviting me to testify today.
Without adequate and accessible treatment facilities,
delivery of care will be compromised. This hearing is the first
step to ensuring that veterans not only receive the best care
but also receive the care in a location and in a facility that
best meets their needs.
Strategic Capital Investment Plan (SCIP) has identified
4,808 capital projects, with a price tag that ranges between
$53 billion and $65 billion. All of these projects will need to
be completed to close condition, utilization, access, and space
in gaps.
Currently, all VISNs have at least $100 million in D and F
rated Facility Condition Assessments gaps with nine having over
half a billion dollars in gaps. This occurred because of years
of under funding for non-recurring maintenance.
Inpatient utilization in 9 VISNs will increase over the
next 10 years. Outpatient demand will increase in all 21 VISNs
in that same period. VA has well thought out plans to build new
and reuse existing space where appropriate, lease when
available, and demolish and mothball when necessary. VFW
supports VA's Utilization Gap Reduction Plan, but we believe
too much of the financial burden is being pushed to out years.
Currently, 7 VISNs are not meeting the 70 percent of the
enrollees residing within the VA's drive-time goal. VFW
supports VA's accessibility gap reduction plan.
VA's space inventory is at a deficit at 12 of the 21 VISNs,
and VHA as a whole will reach 125 percent capacity within the
next few years.
VA is aggressively repurposing or removing many of its
underutilized or vacant buildings. Although VFW recognizes the
need for the removal of buildings, we ask that VA provide more
information on that decision process. Overall, VFW believes
VA's gap analysis for future usage and property management is
acceptable.
Enhance Use Lease is due to expire at the end of this
calendar year. Without reauthorization, VA's homelessness
initiative will be jeopardized. It is vital that this program
be reauthorized. Since 2006, $266 million has been saved
through VA because of this program. Please reauthorize this
program.
VFW believes that 2012 budget request is extremely low.
Investing $2.88 billion annually for an overall capital
infrastructure budget will not meet the needs of these growing
gaps. VA is admittedly back-loading the capital plan by placing
more than $16 billion in minor construction and NRM needs in
the years 2017 through 2021. VA cannot continue to push current
needs to out-years. Buildings will only continue to deteriorate
and the capital investment plan will only grow its deficit. VFW
believes that the VA's major construction account should be
funded at $1.85 billion, not the Administration's requested
level of $590 million. This will allow them to complete all
current, partially funded projects within 5 years, begin
providing funding for 15 new projects, and complete all
currently funded seismic corrections within 3 years. In the
fiscal year 2010, NRM received a total of $2.1 billion. VA is
requesting only $871 million in the next fiscal year.
Slight increases in the 2012 budget request will allow VA
to easily eliminate minor construction gaps over the next 10
years, and the leasing appears to be on track to close all
those related gaps in that same time period.
In closing, VFW is impressed with VA's gap analysis and
their process of determining corrective actions for all
identified gaps. However, VFW would like to see more
information on the building disposal process, as well as
requests for funding that will set VA's capital plan in the
right trajectory.
VFW also requests that this Committee and Congress as a
whole take a serious look at the long-term effects of not
having a viable capital infrastructure for VA. Partnerships
with medical universities will fade, training and recruitment
of doctors will diminish, and vital research, which has been a
tremendous recruitment tool for VA, will not be productive.
Reducing VA's capital infrastructure spending will have second
and third order of effects that will cost taxpayers more in the
long-term. There is no short-term fix to the VA's
infrastructure problem, so we must stop looking for one and
begin funding VA construction at an appropriate level and set
VA on a path of correcting gaps so current and future veterans
will receive the care they earned and deserve.
Mr. Chairman, this concludes my testimony, and I look
forward to any questions that the Committee may have.
[The prepared statement of Mr. Kelley appears on p. 49.]
The Chairman. Thank you, Mr. Kelley.
Ms. St. James, you have heard some discussion here with the
previous panel about basing investment decisions today on
projections in 2018. What is your view on that type of
projection?
Ms. St. James. In leading practices, projecting out 5 to 10
years is a good thing. What VA has to be able to do is note
that in its projections are estimates and that as each year
progresses further to the beginning of projects, those
estimates get better. That was one reason we recommended that
VA in their future budget submission, include the full results
of SCIP so that you can see the priorities and the total cost
that they are looking at in the future years.
The Chairman. But they did not add activation and operation
costs and so, you know, you have heard that asked as well.
Ms. St. James. Correct.
The Chairman. So how serious a problem is it in SCIP that
they don't include those numbers?
Ms. St. James. Because our report was issued before VA
implemented SCIP, the way that the timing was reported, we were
not able to look at SCIP per se, but we did note in preparing
for the testimony that VA is planning to provide those
activation costs and operating costs into SCIP. We think that
is a good idea.
The Chairman. Do you know when they are planning to provide
those costs? Because I tried to get them just a minute ago and
I couldn't get any.
Ms. St. James. Not at this time. We don't know.
The Chairman. Mr. Kelley, would you be opposed to a third
party independent group taking a look at SCIP and just having a
new set of eyes just to validate VA's findings?
Mr. Kelley. If Congress is willing to fund a program to put
another set eyes of it, then it can't hurt anything. But you
can't expect VA to do more with less. So if you are asking them
to go out and find a third party to review what they have done,
you must also account for the funding that it is going to cost
to do that.
The Chairman. So if it is funded, you don't have a problem
with a third party?
Mr. Kelley. Absolutely. Oversight is the best thing going.
The Chairman. Ms. St. James, one other question. What other
actions can VA consider to ensure better management of their
real estate portfolio?
Ms. St. James. GAO has been looking at this topic for
decades and we have made a number of recommendations. For
example, in 2010 we made some recommendations to VA to improve
their cost risk analysis as well as doing an integrated
construction schedule and doing a schedule risk analysis.
And we are following up with VA, so there are some things
that we recommended in the past that we will go back and we
follow up with them to do. I think in the long run as VA looks
at SCIP, the key thing is linkage. Are they measuring what
needs to be done? Are they linking their capital facilities to
what they agree to in their strategic plan and is it necessary
to do?
The Chairman. Do you know which of those suggestions the
GAO made to VA were implemented?
Ms. St. James. We checked back just recently with them on
the risk analysis that I mentioned and we understand that they
are partially implemented, so we are continuing to follow up
for our own records what that really translates to.
The Chairman. For the record, would you report back to the
Committee what you find?
Ms. St. James. Absolutely.
[Ms. St. James subsequently followed up in a letter to the
Chairman, dated April 20, 2011, which appears on p. 59.]
The Chairman. Ms. Brown.
Ms. Brown. Thank you, Mr. Chairman. You know, in December
when we gave those tax cuts, over $700 billion. Now we are
struggling with how are we going to pay the bills for our
veterans. And Mr. Kelley, let me just ask you a question
because in reviewing The Independent Budget, it supports levels
for minor and major construction as well as way above the
President's recommended budget. Based on the climate and shared
sacrifices, please expand your rationale for these
recommendations.
Mr. Kelley. In the budgets, The Independent Budget's
recommendations?
Ms. Brown. Yes. Uh-huh.
Mr. Kelley. We made a sacred promise to veterans that we
will provide them care.
Ms. Brown. Uh-huh.
Mr. Kelley. To facilitate that care, you have to provide it
in a facility. You can't have one without the other. So you
have to fund facilities and infrastructure to be able to
provide that care, so it is a top priority. Without
infrastructure you will not be able to provide the service that
you have promised veterans.
Ms. Brown. So giving the climate that we have here and the
basic billions of dollars that we gave away in December, how do
you think we are going to do that? They say everybody needs to
get in the tank. I think the veterans have already been in the
tank.
Mr. Kelley. I agree. There is always cost savings. We, as
The Independent Budget and some other organizations are working
now to work on finding areas where there are some efficiencies
that can be found and we will be happy to report those back to
you to help find offsets, but what our recommendation will also
state in that is that that money be reinvested back into the
veterans, that that is money not to be saved but to be
reinvested for veterans.
Ms. Brown. So you are saying that you don't think it should
go for deficit reduction?
Mr. Kelley. Veterans are not getting what they have been
promised at this point. So any money that is being spent within
VA that we can find an efficiency on needs to be reinvested to
make sure that we fulfill that promise. Yes. So, no, do not
send that money back for deficit reduction.
Ms. Brown. So that would not be the priorities of The
Independent Budget to take your savings and put it in deficit
reduction?
Mr. Kelley. That is correct.
Ms. Brown. Okay. Well, that is my position, too. What
extent does SCIP, Ms. James, equip VA to address the current
backlog of maintenance approximately $9.4 billion, as reported
in the VA 5-year capital plan for fiscal year 2010 and 2015?
Ms. St. James. There are a couple of things that we think
that VA is doing through SCIP that are leading best practices
and that was talked this morning, and one of them is taking a
centralized view of all of your projects, not just within, you
know, each separate administration within VA. So that gives
more oversight and a chance to equally balance what needs to be
done throughout the organization.
It also put a cost for all major, minor, non-recurring and
leases. So you need to have that information to be able to make
centralized decisions, so we thought that was good.
We have not verified SCIP. They were just applying to the
2012 budget, so we see some good leading practices, but we
couldn't come out and tell you how effective it is because it
simply wasn't being used at that time we did the report.
Ms. Brown. Does the VA work very closely with the local
entities, for example, someone mentioned it earlier and I know,
that in certain communities, particularly in the rural areas,
some of the hospitals are closing. Is it possible that VA could
have some kind of a partnership, so we could have some kind of
cost sharing to provide services to those veterans that are not
in an area that they are close to a hospital?
Mr. Kelley. VA, again, that is part of the Enhanced Use
Lease that needs to be reauthorized. VA is looking at well over
100 properties right now that they would like to use that for
and they range anything from homelessness to shared properties
for medical treatment, so yes, we support that and VA supports
that.
Ms. Brown. All right, Mr. Chairman. Thank you. I yield back
the balance of my time.
The Chairman. Mr. Bilirakis.
Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it. I
have a question for Ms. St. James. Do you believe that the VA's
current system of evaluating construction priorities is
effectively ranking feasible projections with respect to long-
term costs. And then also, could you elaborate on when you
think it can be done to best estimate actual costs?
Ms. St. James. In long-term planning, the costs are going
to be just that. They are going to be estimates and VA's
process of prioritizing, if that is what you are asking about,
they, as was indicated this morning, they are using six
criteria. The first being safety and security, and then there
is linkage to the strategic plan and then taking care of what
they have, and that represents 74 percent of, you know, their
emphasis on what they are trying to do with those top three
things.
And in the cost estimating piece, if you look at how VA
plans, based upon models that tell them they need certain
facilities and procedures in very well laid-out guidelines from
OMB, as well as from our work at GAO is done, this is how cost
estimates should be done. And part of what I was talking about
earlier is that we have made some recommendations to better
improve their costs estimates, so that's part of what we could
get back to you on what VA has done in regards to those
recommendations.
Mr. Bilirakis. Okay. Very good. Thank you. Thank you. I
yield back, Mr. Chairman.
The Chairman. Dr. Roe.
Mr. Roe. Just very briefly. How many veterans do we serve
in the country now? How many veterans that are actually signed
up? Do you have that number?
Mr. Kelley. I believe it is around 6 million.
Mr. Roe. About six--okay. I helped develop so many offices
and design them and then two or three hospitals now in the
local community. I understand that it is not easy to get down
range and find out how much your need is going to be. It is
like building a house. You never put enough closets in it. That
is what you find out. You always need three more.
So when you design a building or try to estimate what those
needs are going to be down the road, it is hard. There is no
question about it. And you never have enough money. So I do
like the idea that the VA has some criteria because you never
get enough money to build everything you want. I mean, you have
to go with what you can afford, so I appreciate that and I am
glad there is objective criteria out there to try to do that.
The needs will be greater somewhere else.
But Mr. Kelley, you made the--I want you to repeat this
because it may be in your written testimony, about what you
thought the needs were now that maybe I misunderstood when I
was listening.
Mr. Kelley. The needs for funding?
Mr. Roe. Yeah, right now. I mean, you were a little short
about how much you said.
Mr. Kelley. Right. VA for major construction is asking for
$590 million, for major construction alone. The Independent
Budget had recommended $1.85 billion for major construction,
and that puts us on a track to complete everything that is
already implemented within 5 years, start 15 new projects and
all seismic deficiencies that have already been started, have
them completed within 3 years.
Mr. Roe. Okay. That is what I wanted to know. I think,
looking down the road, you have to estimate how many veterans
you will serve, 5, 10 and 15 and 20 years from now, and that
isn't easy. Military is different now because it is volunteer
and when I was in, we were all drafted. Because most of us were
drafted, there were larger numbers of veterans to cover.
Now, what you have, it looks to me like the intensity of
the service is much greater because many of these veterans are
going, being deployed 2, 3, 5, 6 times, but it is the same
people going over. Whereas, when I was in, there were different
people going back to Vietnam. So I think finding out what you
perceive the need to be later on down the road is important to
us as far as facility structures.
You don't want to build a bunch of structures and then have
them empty. For instance, a 100-bed hospital now or 200-bed
hospital, 500-bed hospital could because of length of stays,
because of how the technology has improved and how much of it
is done as an outpatient. So I think all of that going forward
is important when you look at just facilities. It is not just
bricks and mortar. That is the cheap stuff really. It is really
the ongoing costs of the personnel later on down the road is
important, I think.
And I know you all have probably done that. I like the
process. Ms. St. James, any comments?
Ms. St. James. I would agree with what you said and I think
when it comes to the planning process, whether it is personnel
or bricks and mortar or the X-ray machine, whatever equipment
goes along, they are all instruments in carrying out the
mission of the VA, and although it sounds simple to do, to
realign and align all of your resources in towards that
mission, it is difficult. It is difficult to do.
Mr. Roe. Thank you. I yield back.
The Chairman. Any other questions from the Committee? Thank
you for sitting for a couple of hours waiting to come forward
and testify, both of you. We appreciate your willingness to be
here today. I would say that all Members would have 5
legislative days to revise and extend their remarks. Any other
comments for the good of the order?
Without objection, this hearing is adjourned.
[Whereupon the 12:34 p.m. the Subcommittee was adjourned.]
A P P E N D I X
----------
Prepared Statement of Hon. Jeff Miller, Chairman,
Full Committee on Veterans' Affairs
Good morning. This hearing will come to order.
Before we begin, I ask that everyone please take a moment of
silence for former Representative John Adler, a distinguished Member of
this Committee during the 111th Congress, who passed away yesterday.
He devoted his life to helping others through his service to our
Nation. John took his role on this Committee very seriously and was an
advocate for veteran-owned businesses as well as helping to cut the red
tape to improve the VA claims process. Let us keep the Adler family in
our thoughts and prayers.
Before we proceed with today's hearing, I would like to take care
of one item of Committee business by adopting a resolution filling our
full Committee roster for the 112th Congress.
The list is before the Members and I ask Mr. Bilirakis for a motion
on this resolution.
[Adoption of resolution]
I thank the Ranking Member and the staff for working with us to
fill the vacancies. That concludes our business meeting and I would now
turn the Committee's attention to today's scheduled hearing.
I want to welcome everyone to today's hearing titled:
``Deconstructing the Department of Veterans Affairs (VA) Construction
Planning.''
We are here to examine VA's FY 2012 construction budget request,
including the methodology used to arrive at the request, and VA's long-
term construction outlook. Unlike previous long-term construction
modeling that covered 5-year projections, VA has now put forth a 10-
year construction plan using the Strategic Capital Investment Planning,
or SCIP (``skip''), process.
The SCIP process is intended to draw upon past lessons in VA
construction modeling as well as knowledge from the private sector in
meeting current needs and anticipating future ones.
Without a doubt, a new capital asset planning process presents new
challenges and opportunities. The opportunities are there to provide
veterans with state-of-the art health care in modern facilities closer
to where veterans live.
The challenges are that VA has an aging hospital infrastructure, a
considerable backlog of maintenance projects, an aging veteran
population that makes long-term planning difficult, and a constrained
fiscal environment within which to operate.
VA's SCIP plan has been described as a 10-year ``action plan'' that
would require a minimum investment of $53 to $65 billion over 10 years.
Needless to say, given the fiscal environment we are in, that is an
ambitious funding requirement, one that we must be sure relies on good
assumptions and reliable analyses. Toward that end, I have several
questions I'd like to examine at this hearing.
First, I'm interested to learn the health care utilization
assumptions that were used in adopting the plan, especially given the
expected dramatic decline in the veterans' population over the next 20
to 30 years.
Second, I'm interested to learn whether the $53 to $65 billion
price tag can realistically be met given that the President's FY 2012
request, if carried forward annually for 10 years, would only meet
roughly half the total cost.
Third, I'm interested in learning about the alternatives VA
considered to meet its service delivery needs other than in-house
construction. Were partnerships with other Federal providers adequately
explored? What about public-private partnerships?
In short, were all available options to meet veterans' needs on the
table and fully considered?
Fourth, it is my understanding that the SCIP plan does not include
costs associated with up-front facility activations, or annual
operating expenses. I'm interested to learn whether those costs ought
to be known before Congress adopts one proposal over another.
Finally, I'm interested in learning about VA's recent performance
in its management of construction projects. If the Committee can be
given some assurances that VA has been a good steward of the
construction funding Congress has already provided, it will help in the
decisions we must make moving forward.
I believe it is imperative that VA use full transparency in
presenting its decision-making process and how every dollar is spent
once appropriated.
VA must also ensure that all cost-effective options are considered,
all bias acknowledged, and due diligence conducted as it moves forward
in its capital asset planning.
Comprehensive planning on the front end will prevent massive cost
overruns and project delays down the road.
In the end, our overarching objective is clear. Veterans expect,
and we should deliver, the best that 21st Century health care has to
offer.
This hearing begins a discussion of how we will collectively chart
a path toward meeting that objective.
I appreciate everyone's attendance at this hearing, and now yield
to the Ranking Member for an opening statement.
Prepared Statement of Hon. Bob Filner, Ranking Democratic Member,
Full Committee on Veterans' Affairs
Good morning everyone, and thank you, Mr. Chairman, for holding
this important hearing on the capital planning and budgeting process
for the Department of Veterans Affairs.
VA is the owner and operator of 33,000 acres of land and over 5,500
buildings. Many of the VA hospitals and medical facilities are aging
and are in need of major renovation or replacement. Many VA facilities
need to be upgraded in order to meet standards for earthquakes, fires
and patient privacy.
Central to VA's mission is the operation and delivery of the
highest quality health care to our Nation's veterans--and we understand
that a key part of this care is the facilities in which it is provided.
The VA's fiscal year 2012 budget included the Department's 10-year
Action Plan and according to VA--the plan is a living document
reflecting changes in the composition and alignment of assets. It
represents a snapshot in time based on the current state of VA's
capital portfolio and projected needs.
This 10-year action plan comes on the heels of the Capital Asset
Realignment for Enhanced Services or CARES. I am sure we all remember
the CARES initiative which was the first comprehensive look at VA's
infrastructure and alignment since 1981.
In 1999, VA initiated the CARES process, along with a 5-year
capital plan for the Department's construction budget. When the VA
embarked on the CARES process, the VA's health infrastructure was
thought to be unresponsive to the needs of current and future veterans.
While about 24 percent of the veteran population was enrolled in
the VA for health care, the CARES plan assumed that the enrollment
population would increase to 33 percent by the end of 2022. In
addition, there were concerns about the ability of the existing health
infrastructure to meet the demands of the aging veteran population who
opt for warmer climates in the South and the Southwest.
CARES was intended to eliminate or downsize underused facilities,
convert older massive hospitals to more efficient clinics, and build
hospitals where they are needed in more populated areas.
In essence, CARES was to direct resources in a sensible way to
increase access to care for many veterans and to improve the efficiency
of health care operations across VA facilities. VA informed this
Committee in order to implement CARES properly they would need $1
billion dollars a year for 5 years.
Because of the delays in the process, many of the identified
projects rose in cost which ended up costing much more than original
projections.
CARES was supposed to be a blueprint for future VA facilities
development. However, here we are, once again, looking at a new process
implemented by VA in the fiscal year 2012 budget. This year, the VA
rolled out the Strategic Capital Investment Planning (SCIP) program
designed to build upon the CARES process.
With this new process and 10-year look, that includes pending CARES
projects, VA's projected construction needs are between $53 and $65
billion. However, if you do the math for the present rate of FY 2012
request of $2.8 billion, it would take 20 years to meet the minimum
resource need identified in the 10-year plan.
It is unclear to me how VA will continue to follow this, and it is
also unclear how well SCIP will address the medical and demographic
needs of current and future veterans of Afghanistan and Iraq.
We look forward to working with the VA to ensure that our veterans
receive the best possible care in medical facilities that are modern
and safe--while being built efficiently and cost-effectively.
I look forward to hearing about the current construction process,
VA's plans and needs for future construction, and how this Member can
support this effort--with the end goal always being to provide the best
possible health care to our veterans.
Mr. Chairman, I yield back.
Prepared Statement of Hon. Silvestre Reyes
Thank you, Chairman Miller and Ranking Member Filner, for calling
this hearing to discuss the VA's construction planning. It is clear
that many VA facilities are old and outdated. So even in a constrained
budget environment, it is imperative that we continue to update, and
where necessary, replace VA medical facilities.
In addition to rehabilitating existing VA health care facilities,
it is essential that we find a way to make veterans health care more
accessible. There are many ways to provide health services to America's
veterans. Secretary Shinseki stated before this Member earlier this
year that his fiscal year 2012 budget request includes more than $108
million for the Veterans Relationship Management (VRM) program and $70
million for the Virtual Lifetime Electronic Record (VLER) program.
While these are great leaps forward in providing access to veterans,
there is no substitute to having a local medical facility.
I want to commend the Veterans Administration in their
implementation of the 10-year Strategic Capital Investment Plan. By
looking twice as far into the future than the previous CARE plan, it
will enable the VA to more effectively provide medical services across
the country. With the growing number of Iraq and Afghanistan veterans
returning with persistent wounds like traumatic brain injury and post-
traumatic stress disorder, it is imperative that we ensure they have
continued access to medical care regardless of where they call home.
I know it is the goal of every Member of this Member that we ensure
every veteran has access to health care. I thank you again for your
work, and I hope that, by working together with your organizations, we
can continue efforts to ensure that no American Veteran is left without
the care and support they deserve.
Prepared Statement of Hon. W. Scott Gould, Deputy Secretary,
U.S. Department of Veterans Affairs
Chairman Miller, Ranking Member Filner and distinguished Members of
the Committee, thank you for the opportunity to appear today to discuss
the Department of Veterans Affairs (VA) construction priorities and
planning. Joining me today are: Mr. Glenn Haggstrom, Executive
Director, Office of Acquisition, Logistics and Construction (OALC); Mr.
James Sullivan, Director, Office of Asset Enterprise Management, Office
of Management; and Ms. Patricia Vandenberg, Assistant Deputy Under
Secretary for Policy and Planning with the Veterans Health
Administration.
It is an honor and privilege for me to represent Secretary Shinseki
and the many dedicated, hard-working professionals of the Department
who support our mission to serve Veterans and their families by
providing benefits and world class medical services.
VA's top three priorities are to increase access to services and
benefits for Veterans, eliminate the claims backlog, and end Veteran
homelessness. While addressing these priorities it is also imperative
that we ensure our employees and our Veterans are provided safe and
secure facilities in which to work and receive care and benefit
services. These priorities are the principal drivers of our planning
for VA's infrastructure.
With regard to access, this is a priority of the first order.
Simply put, if Veterans and their families do not have access to the
VA, then they cannot avail themselves of the services and benefits that
they have earned while serving our country. Access to our benefits and
services depends on three things: the scope of and breadth of programs,
technology avenues, and the physical facilities in which we operate.
This last point, physical facilities, is critical to access in our
health care and cemetery systems.
One of Secretary Shinseki's first actions was to declare the need
to eliminate homelessness among our Nation's Veterans. Since 2008 we
have reduced the number of homeless Veterans living on the streets on
any given night from 131,000 to 76,000. We are proud of this early
success, but we have a long way to go and we will need all possible
tools at our disposal to make this vision a reality. The Department has
a number of critical tools or programs available at its disposal that
assist in eliminating Veteran homelessness by leveraging current VA
infrastructure to provide housing to our homeless Veterans and their
families. These programs include the Enhanced-Use Lease (EUL) authority
and the Building Utilization Review and Repurposing (BURR) program,
both of which I will provide more details on further in my testimony.
As I mentioned earlier, the safety and security of our Veterans and
employees is paramount. While we are increasing access, eliminating
homelessness, and implementing our other priorities and initiatives we
must never lose sight of the importance of providing a safe and secure
environment at our VA facilities across the country.
To understand what we will need to achieve these priorities we must
look beyond the annual budget cycle and determine the investments
needed to meet our projected long term requirements. In the areas of
capital investment, the recently unveiled Strategic Capital Investment
Planning (SCIP) process accomplishes this by determining our current
state and projecting our needs 10 years into the future to determine
what infrastructure gaps must be addressed in order for the VA to
provide adequate access to Veterans, ensure the safety and security of
Veterans and our employees, and leverage current physical resources to
eliminate homelessness among Veterans.
But while we are working toward achieving these priorities we must
also ensure the efficient and effective use of taxpayer's dollars.
While looking a decade into the future, SCIP prioritizes the capital
needs across VA's three Administrations (VHA, VBA and NCA) as well as
across the programs from which capital funding is provided (major
construction, minor construction, non-recurring maintenance and
leases). No longer are VA capital decisions made in Administration or
program stovepipes. By taking a ``corporate'' approach to capital
planning, SCIP ensures that our capital investments for all Veteran
needs across the country are considered together and are prioritized
according to the same criteria.
It is also important to note that providing needed infrastructure
improvements also adds the benefit of creating competitively awarded
short-term construction jobs as well as long-term health care and
service delivery employment opportunities in local communities
throughout the Nation.
The remainder of my testimony will address the Committee specific
request that VA testify on gap analysis as it relates to current and
future demand; underutilized or vacant property; how VA evaluates and
considers alternatives to planned investments; cost analysis and risk
assessment; prioritization of new projects and renovations; the basis
for the fiscal year 2012 construction authorization budget request; and
the viability of the 10-year capital plan. I welcome the opportunity to
discuss these important issues and address any concerns the Committee
may have on these topics.
The Basis for the Fiscal Year 2012 Construction Authorization Budget
Request
A little over 6 weeks ago, Secretary Shinseki delivered the
President's 2012 Budget to this Committee. Some of my testimony may
repeat information the Secretary shared with you at that time, and much
of this information can be found in Volume 4 of the Department's 2012
Budget Submission--``Construction and 10 Year Capital Plan.'' This
budget volume communicates VA's capital investment needs spanning a 10-
year planning horizon--beginning with the 2012 budget--and discusses
how the SCIP process was used in the development of the 2012
construction budget submission.
My desired outcome for the brief time spent with you today is to
provide depth and meaning to the numbers and information on SCIP, and
to provide insights on how all the pieces fit together. Equally
important, I will highlight some additional innovative strategies and
tools VA is using across the Department's portfolio of capital assets
to maximize, repurpose, and right-size our inventory. Our strategic
capital approach is part of our Integrated Operating Model which is
designed to strengthen our management infrastructure across VA. These
tools further support our commitment to VA's strategic priorities such
as ending Veteran homelessness, and meeting our obligations to all
Veterans in an effective, accountable, and efficient manner.
For 2012, VA is requesting more than $2.8 billion for major, minor,
non-recurring maintenance and leasing programs. New budget authority of
$1.27 billion is for VA's construction programs: $589.6 million for
major construction and $550.1 million for minor construction, and $131
million for grants. VA also plans to apply an additional $135.7 million
that have been previously appropriated by Congress to 2012 major
construction projects. In addition to major and minor construction
programs, the Department is requesting $868.9 million to fund the
medical facilities' non recurring maintenance account, and an
additional $834 million for 2012 leasing activities.
VA's 2012 construction request reflects a continued commitment to
provide Veterans with quality health care and benefits in modern, safe,
and secure facilities. The request includes seven ongoing major medical
facility projects (New Orleans, Denver, San Juan, St. Louis, Palo Alto,
Bay Pines, and Seattle) and design for three new projects (Reno, West
Los Angeles and San Francisco). One cemetery expansion project will be
completed to maintain and improve burial service in Honolulu, Hawaii.
The 2012 request would also fund needed alterations, improvements and
renovations of existing hospitals, community based outpatient clinics,
expansion of national cemeteries and enhancements of other VA
facilities such as Vet Centers and regional offices.
2012 Authorization for Major Medical Facility Construction/Leasing
Projects
In addition to the 2012 budget request, VA is required to obtain
authorization for medical facility investments classified as major
construction as well as for those medical facility leases with annual
rent of over $1 million. Based on the 2012 SCIP process, VA plans to
submit a legislative request to authorize seven (7) major medical
facility projects as follows: Construct a clinical addition and a
parking garage in Fayetteville, Arkansas; add a Simulation, Learning,
Education and Research Network Center to the previously authorized new
medical facility project in Orlando, Florida; construct an Ambulatory
Care, Polytrauma and Blind Rehabilitation Center in Palo Alto,
California; Medical Facility Improvements; expand the National Cemetery
at St. Louis (Jefferson Barracks), Missouri; and to seismically correct
three buildings at three medical facilities: Building 1 in San Juan,
Puerto Rico, Building 100 in Seattle, Washington, and Building 209 in
West Los Angeles, California.
In addition to these major medical facility construction projects,
VA plans to seek authorization for major medical facility leases for
five Outpatient Clinics and three Community Based Outpatient Clinics.
The Outpatient Clinics are located in Fort Wayne, Indiana; Mobile,
Alabama; Rochester, New York; San Jose, California; and South Bend,
Indiana. Three Community Based Outpatient Clinics require
authorization: Columbus, Georgia; Salem, Oregon and Springfield,
Missouri.
Overview Strategic Capital Investment Planning (SCIP)
In developing the 2012 budget, with the initiation of SCIP, VA made
far-reaching enhancements to its strategic capital planning and
investment decision-making processes by providing a more comprehensive
approach to capital investment planning. SCIP builds upon previous
capital investment processes by capturing, for the first time, the full
extent of our infrastructure inventory (including underutilized and
vacant properties), identifying gaps in the provision of service to our
Veterans and their families, and developing a 10-year strategic capital
plan, employing both capital and non-capital solutions, to address
these gaps.
This transformative tool enables VA to deliver the highest quality
services by targeting investments now and into the future that balance
and prioritize competing interests and address our most critical needs
first. VA's first-ever Department-wide integrated and prioritized list
of 2012 capital projects is an important outcome of the SCIP process.
Through SCIP, VA evaluates each capital investment proposal based on
its contribution to six key criteria--the most important of which is
``Safety and Security''. The remaining five criteria are, ``Department
Major Initiatives,'' ``Fixes What We Have,'' ``Increases Access,''
``Right-Sizing Inventory,'' and ``Ensuring Value of Investment.''
SCIP's Data Driven Approach to Identify Gaps
As an integral part of the SCIP process, VA systematically
identified performance gaps where current infrastructure or services
need to be enhanced to meet the location and demand of current and
future Veterans. Guidelines provided to the Administrations required
capital investments to contribute to correcting corporately-identified
gaps in access, utilization, space, condition, energy, safety,
security, parking deficiencies, IT deficiencies, as well as other
functional deficiencies such as privacy and emergency preparedness for
each investment proposal.
VA faces major challenges with its aging infrastructure. On
average, VA buildings are more than 60 years old. The SCIP process
directly addresses these challenges with a range of solutions,
including reuse or repurposing, and working with State and local
historical societies to identify properties that should be demolished.
These efforts increase efficiencies and decrease the government spatial
footprint.
Evaluation and Consideration of Alternatives to Planned Investments
A business case was required to accompany each 2012 investment
proposal. Each business case included the following components: Project
description and justification; a quantification of the performance gaps
the project would address; the alternatives considered; and, the impact
the project would have on meeting the Department's strategic
initiatives to better serve Veterans.
The business cases were also required to include alternative
options to the investment proposal. Major construction and lease
projects were required to provide an ``alternatives analysis'' that
considered the status quo, new construction and/or renovation, leasing,
and contracting out for services. Minor construction and non-recurring
maintenance projects were required to provide an analysis of the status
quo and two additional options.
Cost Analysis and Risk Assessment
All business cases also included a cost-effectiveness analysis
(CEA) that compared the costs of the status quo to the other
alternatives considered. A portion of each project's total score was
based upon whether it provides the best value compared to the proposed
alternatives. Major construction and leases greater than $1 million in
annual rent that are selected for inclusion in the budget request are
required to complete OMB's Exhibit 300s. These exhibits provide a more
comprehensive analysis of the alternatives considered, cost
effectiveness assessments, risk analysis and risk management plans.
Building Utilization Review and Repurposing
To best utilize resources and sustain our commitment to good
stewardship, SCIP requires that existing capital assets be considered
for reuse or repurposing. SCIP identifies the underutilized and vacant
properties and the Building Utilization Review and Repurposing (BURR)
program identifies potential strategies for their reuse or disposal. VA
has reduced its inventory of owned vacant space by 34 percent, from 8.6
million square feet in 2001 to 5.7 million square feet in 2010. It is
anticipated that the BURR process will put a significant number of
buildings in use to serve our homeless Veterans and their families.
The BURR process will assess the potential to develop new housing
opportunities for homeless or at-risk Veterans and their families for
use in public-private partnerships and VA's enhanced-use lease (EUL)
program. The Department's EUL authority allows VA to match supply
(available buildings and land) and demand among Veterans for housing
with third-party development, financing, and supportive services. This
approach has multiple benefits: helping to reduce homelessness among
our Veterans while leveraging an underutilized asset, reducing the
inventory of underutilized real estate, and transferring the operation
and maintenance costs to a developer. Other internal and external
potential reuse opportunities will be explored for buildings determined
unsuitable for housing. Currently, the Department's authority to enter
into additional EUL agreements expires as of December 31, 2011. The
Administration will be submitting a legislative proposal to address
this expiration.
Viability of the 10-Year Capital Plan
The 2012 SCIP process identified an estimated cost of $53-$65
billion to close all currently-identified gaps over the next 10 years.
The advantage to the SCIP-based 10-year strategic capital plan is its
data-driven approach in which all projects are prioritized based on
identified needs and the ability to close known performance gaps. The
SCIP process is dynamic and will require an annual update as part of
the budget formulation process to take into account changes in health
care delivery systems and Veteran demographics.
The total level of capital resources requested is reassessed each
year in the annual budget process, where hard choices are made
balancing capital needs identified in the SCIP 10-year plan and other
VA priorities (such as the cost to provide medical care and Veteran
benefits and services) in order to determine the appropriate level of
funding for the fiscal year.
We are determined to provide our Veterans with access to high
quality medical care and benefit services. Capital infrastructure is an
essential part of our ability to achieve this vision
Conclusion
I appreciate the opportunity to testify on these important topics.
With SCIP, VA has instituted a rigorous capital planning process that
quantifies and prioritizes the need to repair, upgrade, dispose of, or
replace VA's aging infrastructure and address the current and future
needs of America's Veterans within the context of prudent capital
investment decision-making.
VA must be prepared to meet projected health care demand and any
future benefits delivery requirements. We are committed and will
continue to work with Congress, Veteran Service Organizations and other
stakeholders to refine and improve the SCIP process as needed. VA will
continue to provide Veterans and their families with the benefits and
world class medical services they have earned and deserve.
Prepared Statement of Lorelei St. James, Acting Director, Physical
Infrastructure Issues, U.S. Government Accountability Office
VA REAL PROPERTY: Realignment Progressing, but Greater Transparency
about Future Priorities Is Needed
GAO Highlights
Why GAO Did This Study
The Department of Veterans Affairs (VA) has undertaken various
planning efforts to realign its real property portfolio, including the
Capital Asset Realignment for Enhanced Services (CARES), creation of a
5-year capital plan, and its newest effort, the Strategic Capital
Investment Planning process (SCIP). Through these efforts, VA has
identified numerous real property priorities it believes should be
completed if the agency's facilities are to meet veterans' needs for
services now and in the future. In January 2011, GAO reported on the
extent to which VA's capital planning efforts (1) have resulted in
changes to its real property portfolio and (2) follow leading practices
and provide information for informed decision-making. This statement
summarizes the results of this report. To perform the work for the
report, GAO reviewed leading capital planning practices and data on
VA's real property portfolio and future priorities. GAO also
interviewed VA officials and veterans service organizations and visited
sites in 5 of VA's 21 veterans integrated service networks.
What GAO Recommends
In the report, GAO recommended that VA annually provide to Congress
the full results of its SCIP process and any subsequent capital
planning efforts, including details on estimated costs of future
projects. VA concurred with this recommendation.
What GAO Found
GAO reported that, through its capital planning efforts, VA had
taken steps to realign its real property portfolio from hospital based,
inpatient care to outpatient care, but a substantial number of costly
projects and other long-standing challenges also remain. Several of
VA's most recent capital projects--such as community based outpatient
clinics, rehabilitation centers for blind veterans, and a spinal cord
injury center--were based on its CARES efforts and subsequent capital
planning. VA officials and veterans service organizations GAO contacted
agreed that these facilities have had a positive effect on veterans'
access to services. However, VA had identified several high-cost
priorities such as facility repairs and projects that have not yet been
funded. For example, VA reported in its 5-year capital plan for fiscal
years 2010-2015 that it had a backlog of $9.4 billion of facility
repairs. The 5-year plan further identified an additional $4.4 billion
in funding to complete 24 of the 69 ongoing major construction
projects. Besides substantial funding priorities, GAO also found that
VA, like other agencies, has faced underlying obstacles that have
exacerbated its real property management challenges and can also impact
its ability to fully realign its real property portfolio. GAO
previously reported that such challenges include competing stakeholder
interests, legal and budgetary limitations, and capital planning
processes that did not always adequately address such issues as excess
and underutilized property.
VA's capital planning efforts generally reflected leading
practices, but lacked transparency about the cost of future priorities
that could better inform decision-making. For example, VA's 2010-2015
capital plan linked its investments with its strategic goals, assessed
the agency's capital priorities, and evaluated various alternatives.
Also, SCIP strengthened VA's capital planning efforts by extending the
horizon of its 5-year plan to 10 years and providing VA with a longer
range picture of the agency's future real property priorities. VA
officials told GAO that SCIP builds on its existing capital planning
processes, addresses leading practices, and further strengthens VA's
efforts in some areas. GAO has not fully assessed SCIP and it remains
to be seen what impact SCIP will have on the results of VA's capital
planning efforts. While these changes were positive steps, GAO found
that VA's planning efforts lacked transparency regarding the magnitude
of costs of the agency's future real property priorities, which may
limit the ability of VA and Congress to make informed funding decisions
among competing priorities. For instance, for potential future
projects, VA's 2010-2015 capital plan only listed project name and
contained no information on what these projects were estimated to cost
or the priority VA had assigned to them beyond what was then the
current budget year. Transparency about future requirements would
benefit congressional decision makers by putting individual project
decisions in a long-term, strategic context, and placing VA's fiscal
situation within the context of the overall fiscal condition of the
U.S. government.
__________
Chairman Miller, Ranking Member Filner, and Members of the
Committee:
I am pleased to be here today as you examine construction planning
issues related to the Department of Veterans Affairs (VA). VA is one of
the largest Federal property-holding agencies, with more than 33,000
acres of land and over 5,500 buildings. VA uses this diverse inventory
of real property to ensure that veterans receive medical care,
benefits, social support, and lasting memorials. Over time, VA has
recognized the need to modernize its facilities and realign its real
property portfolio to provide accessible, high-quality, and cost-
effective access to its services. Its Capital Asset Realignment for
Enhanced Services (CARES) planning effort, which began over a decade
ago, was designed to assess its building and land ownership in response
to changing veterans' inpatient and outpatient demand for care. Since
its 2004 CARES decision report, VA has undertaken additional planning
efforts to realign its real property portfolio. For example, with its
annual budget submission to Congress, VA began including 5-year capital
plans that included information about projects it was seeking to start,
as well as the estimated costs from first year through completion. More
recently, VA developed a Strategic Capital Investment Planning (SCIP)
process, which is intended to continue VA's efforts to prioritize its
most urgent real property priorities. Through these capital planning
efforts, VA has identified numerous real property priorities that it
believes should be completed if the agency's facilities are to meet
veterans' demand for services.
This statement is primarily based on our January 2011 report, which
addressed the impact of CARES and the effectiveness of VA's capital
planning process.\1\ This statement addresses the following questions
also covered in the report:
---------------------------------------------------------------------------
\1\ GAO, VA Real Property: Realignment Progressing, but Greater
Transparency about Future Priorities Is Needed, GAO-11-197 (Washington,
D.C.: Jan. 31, 2011).
1. To what extent have VA's capital planning efforts resulted in
changes to its real property portfolio and what priorities remain?
2. To what extent do VA's capital planning efforts follow leading
Federal practices and provide the information needed for informed
decision-making?
To perform this work, we reviewed leading capital planning
practices and data on VA's real property portfolio and future
priorities. We also interviewed VA officials and veterans service
organizations, and visited sites in 5 of VA's 21 veterans integrated
service networks. More detailed information on our scope and
methodology can be found in appendix I of the report.
Our work was performed in accordance with generally accepted
government auditing standards. This report did not assess the results
of VA's capital planning proposals that are reflected in the
President's fiscal year 2012 budget, which was released after our
report was issued.
In summary, we found that through its capital planning efforts, VA
had taken steps to realign its real property portfolio from hospital
based, inpatient care to outpatient care, but a substantial number of
costly projects and other long-standing challenges also remain. Several
of VA's most recent capital projects--such as community based
outpatient clinics, rehabilitation centers for blind veterans, and a
spinal cord injury center--were based on its CARES efforts and
subsequent capital planning. VA officials and veterans service
organizations we contacted agreed that these facilities have had a
positive effect on veterans' access to services. However, VA had
identified several high-cost priorities such as facility repairs and
projects that have not yet been funded. For example, VA reported in its
5-year capital plan for fiscal years 2010-2015 that it had a backlog of
$9.4 billion of facility repairs. The 5-year plan further identified an
additional $4.4 billion in funding to complete 24 of the 69 ongoing
major construction projects. Besides substantial funding priorities, we
also found that VA, like other agencies, has faced underlying obstacles
that have exacerbated its real property management challenges and can
also impact its ability to fully realign its real property portfolio.
We have previously reported that such challenges include competing
stakeholder interests, legal and budgetary limitations, and capital
planning processes that did not always adequately address such issues
as excess and underutilized property.
Furthermore, we found that VA's capital planning efforts generally
reflected leading practices, but lacked transparency about the cost of
future priorities that could better inform decision-making. For
example, VA's 2010-2015 capital plan linked its investments with its
strategic goals, assessed the agency's capital priorities, and
evaluated various alternatives. Also, SCIP strengthened VA's capital
planning efforts by extending the horizon of its 5-year plan to 10
years, and providing VA with a longer range picture of the agency's
future real property priorities. VA officials told us that SCIP builds
on its existing capital planning processes, addresses leading
practices, and further strengthens VA's efforts in some areas. We have
not fully assessed SCIP and it remains to be seen what impact SCIP will
have on the results of VA's capital planning efforts. While these
changes were positive steps, we found that VA's planning efforts lacked
transparency regarding the magnitude of costs of the agency's future
real property priorities, which may limit the ability of VA and
Congress to make informed funding decisions among competing priorities.
For instance, for potential future projects, VA's 2010-2015 capital
plan only listed project name and contained no information on what
these projects were estimated to cost or the priority VA had assigned
to them beyond what was then the current budget year. Transparency
about future requirements would benefit congressional decision makers
by putting individual project decisions in a long-term, strategic
context, and placing VA's fiscal situation within the context of the
overall fiscal condition of the U.S. government. It is important to
note that providing future cost estimates to Congress for urgent, major
capital programs is not without precedent in the Federal Government.
Other Federal agencies, such as the Department of Defense, have
provided more transparent estimates to Congress regarding the magnitude
of its future capital priorities beyond immediate budget priorities.
We concluded in our report that billions of dollars have already
been appropriated to VA to realign and modernize its portfolio.
Furthermore, VA had identified ongoing and future projects that could
potentially require several additional billion dollars over the next
few years to complete. Given the fiscal environment, VA and Congress
would benefit from a more transparent view of potential projects and
their estimated costs. Such a view would enable VA and Congress to
better evaluate the full range of real property priorities over the
next few years and, should fiscal constraints so dictate, identify
which might take precedence over the others. In short, more
transparency would allow for more informed decision-making among
competing priorities, and the potential for improved service to
veterans over the long term would likely be enhanced. To enhance
transparency and allow for more informed decision-making related to
VA's real property priorities, we recommended that the Secretary of
Veterans Affairs provide the full results of VA's SCIP process and any
subsequent capital planning efforts, including details on the estimated
cost of all future projects, to Congress on a yearly basis. VA
concurred with the recommendation. We have not yet assessed the extent
to which VA has implemented our recommendation in relation to the
President's 2012 budget.
Finally, I would also like to refer to a report we issued in
December 2009, on VA construction.\2\ This report may be relevant to
today's discussion because it assessed VA's cost estimating approach
for major projects. We found that while about half of 32 major ongoing
construction projects we reviewed were within VA's budget, 18 projects
experienced cost increases, and 11 had experienced schedule delays
since they were first submitted to Congress. Five projects experienced
a cost increase of over 100 percent. There were several reasons for
construction project cost increases and schedule delays, including VA
preparing initial cost estimates that were not thorough, significant
changes to project scope after the initial estimate was submitted, and
unforeseen events such as an increase in the cost of construction
materials. VA had taken steps to improve initial construction project
cost estimates, but we reported that it could better assess the risks
to costs and schedules. We recommended that for all major projects, VA
conduct a cost risk analysis, a schedule risk analysis when
appropriate, and require the use of an integrated master schedule. VA
concurred with our recommendations.
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\2\ GAO, VA Construction: VA Is Working to Improve Project Cost
Estimates, but Should Analyze Cost and Schedule Risks, GAO-10-189
(Washington D.C.: Dec. 14, 2009).
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Chairman Miller, Ranking Member Filner, and Members of the
Committee, this concludes my prepared remarks. I would be happy to
answer any questions that you may have.
For further information regarding this statement, please contact
Lorelei St. James at (202) 512-2834 or at [email protected]. Contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this statement. David Sausville,
Assistant Director; George Depaoli; and Erica Miles also made key
contributions to this statement.
Prepared Statement of Raymond Kelley, Director, National Legislative
Service, Veterans of Foreign Wars of the United States
MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
On behalf of the 2.1 million men and women of the Veterans of
Foreign Wars of the U.S. (VFW) and our Auxiliaries, I would like to
thank you for the opportunity to testify today. Without adequate and
accessible treatment facilities, delivery of care will be compromised.
This hearing is the first step in ensuring that veterans not only
receive the best care but also receive that care in a location and in a
facility that best meets their needs.
VA's 2012-2021 Strategic Capital Investment Plan (SCIP) identified
4,808 capital projects, with a price tag that ranges between $53 and
$65 billion. All of these projects will need to be completed to close
condition, utilization, access, and space gaps.
Gap Analysis
Condition:
Currently, all VISNs have at least $100 million in ``D'' or
``F'' Facility Condition Assessments (FCA) gaps. Nine VISNs
have more than $500 million in gaps, while four VISNs have more
than $700 million in condition gaps. In VISN 3, there are $814
million in deficiencies. This occurred because of years of
under funding for non-recurring maintenance (NRM). VFW is
supportive of VA's 10-year capital plan, but we believe too
much of the plan hinges on out-year funding. Current funding
must be increased to achieve the SCIP plan. If VA requests and
Congress appropriates the funding needed to complete the SCIP
action plan, deficiencies across all VISNs will be reduced to
approximately $200 million by FY 2021.
Utilization:
Utilization can be broken down into two categories: inpatient
and outpatient. Inpatient utilization in 12 VISNs will decrease
over the next 10 years, while nine will increase. Outpatient
demand will increase in all 21 VISNs, with 14 VISNs projecting
an increase in outpatient visits by over one million by 2018.
In reviewing each of the VISN's plans to ``right size'' for
patient demands, it appears to VFW that VA has well thought out
plans to build new and/or reuse existing space where
appropriate, lease when available, and demolish or mothball
when necessary. In VA's 2012 Budget Submission, 131 vacant or
underutilized assets will be repurposed for homeless housing,
more than 128 will be either mothballed or demolished, and 17
will enter the extended use lease (EUL) program. Refitting and
removal of these 276 buildings will save VA $18.5 million per
year in maintenance costs alone. VFW supports VA's utilization
gap reduction plan, but again we believe that too much of the
financial burden will be placed on the out-years.
Accessibility:
Currently, seven VISNs are not meeting the 70 percent of
enrollees residing within the VA drive-time goal. Under SCIP,
all VISNs will meet the goal by 2021. This is being done mostly
through increasing Community Based Outpatient Clinic (CBOC)
leasing, which enables VA to place clinics in communities as
veteran populations shift. VFW supports VA's accessibility gap
reduction plan.
Space:
Many think that space inventory needs is currently reducing;
however, space inventory is at a deficit at 12 of the 21 VISNs,
and VA as a whole is at 125 percent capacity. Much of the
deficit is in outpatient needs. VFW agrees with VA's plan of
expansion for CBOCs to close 95 percent of the space gaps
currently in place or projected by 2021.
Part of space management is deciding what to do with vacant
or underutilized space. VA is aggressively repurposing many of
its buildings, but there is a time when demolition may be
necessary. Although VFW recognizes the need for the removal of
buildings, we ask VA to provide more information on what the
decision process looks like during consideration, as well as a
history of the building, to include what the building was last
used for, how long had it been vacant or underutilized, and
whether EUL was considered as an option for the property.
Overall, VFW believes VA's gap analysis for future usage and
property management is acceptable.
Alternative investment planning
VFW is satisfied with VA's investment evaluation and consideration
process for future needs. VA generally uses five criteria to determine
the best and most financially sound capital investment plan. The
criteria are: status quo, renovation, new construction, leasing, and
contract out. VA weighs each of these options and provides an
explanation of each option and rationale of their final decision on
future capital planning.
The EUL program that was originally authorized in 1991 has formed
public/private ventures that have generated annual revenue, cost
avoidance and savings for VA. In FY 2010 alone, $61.5 million was off-
set by EUL, and more than $266 million has been saved since 2006. EUL
is due to expire at the end of this calendar year. Without re-
authorization, VA's homelessness initiative will be jeopardized.
Twenty-four current homelessness EULs and the planned repurposing of
more than 100 underutilized buildings will be impacted. It is vital
that EUL is re-authorized to enhance services to veterans, as well as
reduce capital costs to VA.
Cost analysis and risk assessment
In VA's future needs consideration, cost analysis is always a
consideration. VA expertly evaluates each critical gap and determines
which construction option, whether it be leasing, renovating or
building a new facility, makes the best financial sense but still
provides the highest quality care with the easiest access for veterans.
Cost alone should never be the lone factor for determining capital
needs, and VFW is please that VA appears to use patient needs as a
first step in deciding how to approach future building needs.
VFW is also concerned that delays in major construction projects
will cost more if the projects are delayed. Ten major construction
projects were designed and ready to begin construction in 2009. In FY
2012, only two of those projects have been identified to be funded. VFW
believes that major construction projects should be funded to be
completed within 5 years of initial funding.
Project prioritization
VFW views the SCIP prioritization process favorably. Unfortunately,
funding does not reflect the same level of prioritization. Unless the
out-years are funded much more aggressively than the current years, VA
will not be able to meet demands, facilities will require more
maintenance funding, and the priority list will continue to grow.
2012 construction budget request
VFW believes the 2012 capital budget request is extremely low. The
current costs to fill the gaps that have been identified--which are
planned to be corrected by 2021--are estimated to be between $52 and
$65 billion. Investing $2.88 billion annually will not meet the needs
of those gaps. VA is admittedly back-loading the capital plan by
placing more than $16 billion in minor construction and NRM needs in
the years 2017-2021. There were ten major construction projects that
were schematic/design developed in FY 2009, yet only two of those
projects were identified for funding in the FY 2012 budget request. VA
cannot continue to push current needs to out-years. Buildings will only
continue to deteriorate and the capital investment plan will only grow
its deficit. VFW believes that VA's major construction account should
be funded at $1.85 billion. This will allow them to complete all
current, partially funded projects within 5 years, begin providing
funding for 15 new projects, and complete all currently funded seismic
corrections within 3 years. In FY 2010, NRM received a total of $2.1
billion. VA has requested only $871 million for NRM in FY 2012. This
will fund only 190 of the more than 4,000 NRM projects reported under
SCIP. Minor construction is in better shape than major construction and
NRM. Slight increases in the 2012 budget request will allow VA to
easily eliminate minor construction gaps over the next 10 years.
Leasing appears to be on track to close all related gaps within the
desired time frame.
Viability of the 10-year plan
SCIP is thorough in its examination of current and future capital
asset needs. It looks at multiple gaps that reduce the safety of
employees and veterans and limit access and quality of care they are
tasked to provide. VFW supports VA's SCIP 10-year plan, but recommends
that funding be increased to match the infrastructure demand.
VA's capital budget plan comes from several line items: Lands and
structures under medical facilities, and major and minor construction
under VA construction accounts. The medical facilities account carries
NRM and leasing. The FY 2010 actual for this account was $2.3 billion,
with $2.15 billion used for NRM. The 2011 current estimate is already
$200 million above the 2011 budget estimate, coming in at $1.4 billion.
Even with this substantial increase in funding, 3,470 of the 4,808
identified capital projects within SCIP are NRM. The FY 2012 budget
recommends an NRM budget of only $868.8 million. At this funding level,
it will take 24 years to complete currently identified NRM projects.
If leasing line items are funded at the Administration's requested
level, VA should be on track to maintain their current leases and fund
the 61 new projects in FY 2012. VA has a plan to repurpose at least 131
buildings for the Secretary's homeless initiative, and EUL is needed to
facilitate most of these programs. As mentioned before, EUL is due to
expire at the end of 2011. It needs to be reauthorized.
Major construction projects accounts for the largest cost in
capital planning. To complete the partially funded and to fully fund
the 133 new projects in the FY 2012 SCIP plan, Congress will need to
appropriate between $20 billion and $24.5 billion. VA plans to invest
only $725 million--$545 million through appropriations request and
$135.7 million in prior year unobligated funds--for major construction
projects in FY 2012. At this pace, it will take about 30 years to fully
fund VA's 10-year plan.
VA estimates that current and future minor construction projects
will cost between $8 billion and $10 billion. Again, funding requests
fell far short at only $550 million for FY 2012. At this pace, VA will
take 14.5 years to reach its 10-year capital plan. Minor increases in
current years will reduce the burden of these projects in out-years.
VFW believes the SCIP 10-year capital investment plan by itself is
a solid plan. However, implementation of the plan is flawed. Asking for
extremely low construction funding levels will cause the plan to fail.
Closing access, utilization and deficiency gaps will only happen if
Congress is committed to providing approximately $3.5 billion per year
from FY 2017-2021 for minor construction and NRM alone.
In closing, VFW is impressed with the breadth and depth of VA's gap
analysis and their process of determining corrective actions for those
gaps. However, VFW would like to see more information on the building
disposal process, as well as requests for funding that will set VA's
capital plan on the right trajectory. VFW also requests that this
Committee and Congress as a whole take a serious look at the long-term
effects of not having a viable capital infrastructure for VA.
Partnerships with medical universities will fade, training and
recruitment of doctors will diminish, and vital research--which has
been a tremendous recruitment tool for VA--will not be productive. VFW
understands the Nation's financial trouble, reducing VA capital
infrastructure spending will have second and third causes of effect
that will cost taxpayers more in the long-term. There is no short-term
fix to the VA infrastructure problem, so we must stop looking for one
and begin funding VA construction at an appropriate level to set VA on
a path of correcting gaps so current and future veterans will receive
the care they earned and deserve.
Mr. Chairman, this concludes my testimony, I will be happy to
answer any questions you or the Committee may have.
Prepared Statement of Kaiser Permanente
Kaiser Permanente would like to thank the Committee on Veterans
Affairs of the United States House of Representatives for the
invitation to answer specific questions at today's hearing.
The Kaiser Permanente Medical Care Program is the largest private
integrated health care delivery system in the U.S., delivering health
care to approximately 8.7 million members in nine States and the
District of Columbia. Kaiser Permanente is comprised of Kaiser
Foundation Health Plan, Inc., the Nation's largest not-for-profit
health plan, and its health plan subsidiaries outside California and
Hawaii; the not-for-profit Kaiser Foundation Hospitals which operates
36 hospitals and over 400 other clinical facilities; and the Permanente
Medical Groups, independent physician group practices that contract
with Kaiser Foundation Health Plan to meet the health needs of Kaiser
Permanente's members. The vast majority of medical, pharmacy,
diagnostic, and laboratory services delivered to Kaiser Permanente
members are performed within Kaiser Permanente.
Kaiser Permanente's capital scope includes expenditures in three
major categories; new facility, information technology investments, and
plant maintenance and renovations. Facility expenditures include
investments in new hospitals, medical offices, and other ancillary
space to meet growing membership needs and enable the internalization
of care and services. These include both owned and leased space.
Facility expenditures also include the cost of expansion of existing
facilities, seismic upgrades, regulatory requirements, and maintenance
projects. Ancillary space includes pharmacies and laboratories, as well
as administrative space and business services.
The Professional Staff of the Committee contacted Kaiser Permanente
to request input to this hearing in the form of specific questions
regarding our own capital planning processes, as follows.
Questions and answers:
1. Does your organization use a cost analysis in planning construction
or renovation projects for purchase or lease?
All capital projects require the submission of a business case for
funding approval. There are predetermined thresholds, based on the
dollar amount associated with the capital investment, which determine
the specific requirements of each business case. The business case for
major capital investments includes a full cost analysis of all
operating expenditures and capital expenditures evaluated over a 10
year time frame. Individual cost analysis inputs (for example, costs
expressed as dollars per square foot) are compared to internal metrics.
Additionally, high level place holders are used for long range capital
planning. These numbers are determined based on a high level internal
cost model estimates. At the time of the actual funding request,
business cases and options are developed and evaluated in more detail.
Kaiser Permanente is in the process of developing benchmarks that are
tied to external industry standards.
2. How is an analysis of alternatives conducted?
We assemble a comparative matrix that allows us to evaluate the
short list of options for capital projects. This matrix includes the
pertinent qualitative and quantitative drivers to the decisions (i.e.
entitlements, parking, hard and soft costs, etc.)
It is the responsibility of the group who is submitting the
business case to identify and evaluate the most relevant, realistic
alternatives to proposed projects. Key considerations include----
Can existing facilities accommodate forecasted service
demand?
Can existing facilities be renovated/modified to
accommodate forecasted service demand more cost effectively?
Is there an option to lease space for services in a way
that is more financially beneficial to the organization?
Is a lower cost venue available for purchase and
renovation?
Can the project be built using a smaller footprint?
Reduced scope?
Are there other providers in the market that can
accommodate demand via contracting or partnership arrangement in an
appropriate manner?
Is there a higher and better use for the planned invested
capital in other parts of the region?
In addition to describing these alternatives, regions are
responsible for identifying and to the extent possible quantifying key
risks associated with each alternative to the end of providing a full
rationale for the recommended option.
3. On average, how many pages constitute a cost analysis of any given
small and large project?
The length of a cost analysis really depends on the complexity of
the cash flows and the transactions at hand. A typical business case
includes the following in the cost analysis: comparative summary, net
present value (NPV) analysis for each option under consideration, cash
flow for each option considered, profit and loss (P& L) analysis for
options considered and capital cost estimates for all options.
4. Who provides the analysis (internal to your organization or
independent third party)?
Comprehensive cost analysis is generated, reviewed and approved
internally.
5. Is the organization providing analysis contracted to provide the
service? If so, is that expense valuable in overall cost
savings related to your organizations decision?
This type of analysis is done using internal resources. While it's
impossible to assign an accurate dollar amount to the value our
organization receives through these thorough analyses, experience shows
that a poorly planned investment can cost the organization millions of
dollars over the life-cycle of a facility. For example, over-building a
facility (building more square footage than is needed to meet market
demands) increases both the initial investment and ongoing operational
cost. It also ``locks-up'' capital resources that could be utilized to
address other areas of need. Under-building a facility may force us to
outsource services at a less efficient cost that could be achieved
internally.
6. What is the value of comprehensive cost analysis in relation to your
organization's construction or renovation projects?
Comprehensive cost analysis is an essential element of informed
decision-making and project approvals at Kaiser Permanente. This type
of analysis allows Kaiser Permanente to:
better predict total project cost;
appropriately plan and build a long-term, multi-year
capital program;
compare predictive cost models to our actual costs so
that we may improve analysis of future projects;
properly evaluate a range of options to make informed
capital decisions going forward; and
provide a benchmark against completed project cost and
published industry cost data.
We hope that these answers are helpful to the Committee as it
examines the Department of Veterans Affairs capital planning process.
Kaiser Permanente would be happy to answer any additional questions the
Committee may have.
Sacred Heart Health System
Pensacola, FL
April 4, 2011
Hon. Jeff Miller
House of Representatives
U.S. Congress
Hon. Bob Filner
House of Representatives
U.S. Congress
Dear Chairman Miller and Representative Filner:
I am Peter Heckathorn, Executive Vice President of Sacred Heart
Health System in Pensacola, Florida. I lead strategic and operational
planning for the health system and I have been in that role for 14
years. Prior to that I was involved in various health care
organizations and was a consultant to large medical systems across the
country.
Thank you for the opportunity to provide some information on how
private health care organizations plan and budget for operations,
technology, and facility investment. I apologize in advance for not
being able to see you in person, but I suffered an acute medical
condition that has temporarily blinded me in one eye and limits my
ability to both write and travel.
Background
Sacred Heart Health System (``SHHS'') is part of Ascension Health,
the largest not-for-profit health care provider in the country, with
physician clinics, hospitals, and nursing homes in 20 States. Ascension
Health providers serve the full spectrum of populations, but with a
special preference for the poor and vulnerable.
SHHS is an integrated health system providing physician care,
inpatient community hospital services through 3 hospitals (with 543
beds operating at 80 plus percent occupancy), as well as highly
specialized regional services such as heart surgery, cancer care, and
pediatric specialty services. SHHS provides primary and specialty
physician care through clinics and medical offices for citizens
throughout a 10 county region in western Florida and southern Alabama.
SHHS also provides tertiary care for infants, children, and adults in a
20 county region including services for active duty military personnel
and their dependents. Sacred Heart Hospital in Pensacola was named one
of the best hospitals in the country in 2011 by HealthGrades, an
independent organization that analyzes clinical quality outcomes for
all hospitals. Additionally, Thomson Reuters named our Sacred Heart
Hospital on the Emerald Coast in Destin one of the top 100 hospitals.
We are presently engaged in the annual development of an integrated
strategic and financial plan that includes major capital projects. Over
the last 10 years, SHHS has constructed two new hospitals and over a
million square feet of ambulatory care space.
What I will share is a standard practice across the health care
industry on how large, multi-region health systems engage in effective
planning.
Strategic, Operational and Financial Planning Process
Health systems are driven to ensure careful and thoughtful
financial stewardship and investment in the services for the
communities we serve. Health care financial operating margins are very
slim (averaging 1-2%), and the facility and technology driven nature of
our industry demands tremendous amounts of capital investment. Careful
planning and cash management are critical to survival. Therefore, it is
incumbent on multi-regional systems to ensure that each of their local
regional health systems annually create and update a 5-year strategic,
operational, and financial plan to support that system's operating and
capital expenditures budget.
A well-managed health system (``HS'') will create an integrated
strategic, operating and financial plan (``ISOF Plan'') that
incorporates the following elements in a detailed 5-year forecast
document to be used by managers, executives, boards, and regional/
national staff to track progress:
Demographic and Market Analysis: Population, economic and
health care statistics, trends, and forecasts are developed in a
defined geographic market. Detailed population by age, gender, and race
are analyzed for changes and trends, as well as employment, local
business trends, and disease trends to assess their effects on the
potential demand for services. Existing trends of utilization at the
local regional system's facilities and other local facilities
(including private and public) would be articulated and analyzed
relative to the population and economic activity. All local trends and
forecasts would be reviewed against national trends. Local, State, and
Federal Government activities, financing, and regulations would all be
scrutinized for implications on the demand for care and financing of
services. All the data can be obtained from commercially available
health information and planning companies who specialize in providing
historical data, predictive demand and supply tools, and provide
information regarding demographic and technology trends.
Market Dynamics Review: Strategic and operating trends of
other providers (including the VA medical facilities, the active-duty
armed forces health care facilities) are analyzed for potential short-
term and long-term impacts. In the private sector, there may be an
avoidance of duplicating services or a need to provide a competitive
service to maintain income viability as facilities compete on quality,
customer service and clinical capability. The opportunities would be
carefully balanced against the demographic analyses, preferred
strategies, and financial investments and returns necessary to ensure
organizational sustainability. This situation and opportunities
analysis influences strategic planning goals.
Strategy Plan: Most large health care organizations have
developed strategies that are derived from their mission and vision.
Those strategies would then be tailored through specific tactics to fit
the specific market characteristics of the communities the regional
health system serves. The operational implementation of each of these
strategies should be addressed in the detail of the regional health
system's ISOF Plan with concrete measureable performance goals.
Performance against those goals should be tracked throughout the year
by the local health system leadership, the regional/national system
office, and the local boards of directors to ensure that the local ISOF
Plan is effectively being pursued and implemented to further local
regional and collective system-wide plans.
Financial and Capital Investment Budgets: Annually, in
concert with the strategic and operational planning process, a 5-year
financial and capital investment plan is created. These plans reflect
the strategic and operating commitments of the local health system. The
financial plan would only be approved for 1 year and although capital
investments are listed, they are not approved for more than the current
year without a far more detailed and rigorous process which is outlined
below. It is the expectation that the 5-year financial and capital
plans will be reliable and consistent from year to year. Significant
variation from year to year would be a major concern, unless major
events (e.g., hurricane) occurred. Such variation would reduce the
credibility of a local system seeking to add facilities and capacity or
start a new location.
Performance Evaluation: The ISOF Plan would be approved
by the local regional health system's board and the national health
system's board. Throughout the year, performance against the ISOF
Plan's specific goals and financial plan would be evaluated. Most large
private systems link executive's and management's compensation to the
execution of the ISOF Plan goals.
Major New Technology or Building Projects
Major new technology and facility projects are analyzed separately
from routine replacement of equipment. The financial plan described
above includes routine capital replacements, including equipment and
facility refreshes.
Major technology and capital projects (e.g. over $10 million in
expenditures) would demand a multi-year conceptual planning lead time
and detailed analysis before receipt of funding approval by the system-
wide office. The process for approval and subsequent funding entails
written justifications, analyses, and reviews in a thorough,
disciplined, and documented process that involves multiple external and
internal experts in planning, technology, operations, and finance. We
shall call this the ``capital project submission and review process.''
Step 1: Initial Project Vetting
A prerequisite for a project to be qualified for the ``submission''
process is that the conceptual project has been identified and
discussed in the specific local regional health system's 5-year ISOF
Plan as a critical goal to implement system strategy, and is in the
local regional health system's capital investment budget as a priority
that ``outranks'' other items it seeks. The creation of the ISOF Plan
should involve a large number of stakeholders (e.g. staff, local health
system board members [business and community leaders who live in the
community)) in the preparation, critique, and refinement of the ISOF
Plan document. Potential projects are carefully debated to ensure that
the highest-priority, sustainable projects are conceived. Every year
each local regional health system's ISOF Plan is also reviewed by an
independent team at the system-wide office with the local regional
executive that oversees the health system. Each local regional
executive also annually presents their ISOF Plan and the proposed
projects to other regional executives and system-wide leadership. This
process provides for early constructive feedback on the potential
project's strategic rationale, financial potential, and alternatives.
This process also alleviates sudden crisis-driven projects.
It is expected that in each year's version of the ISOF Plan the
local regional market statistics and strategies pertinent to a
potential project would have been identified, articulated, and modified
to identify key rationales and data promoting or proposing other
alternatives to the project.
If the regional executive, after feedback from her or his peers,
determines that a project has sufficient strategic and financial
probability of success, then a ``master facility plan'' would be
completed or updated. The master plan would be prepared by a multi-
disciplinary team of independent outside consultants with specific
expertise in health care planning, finance, operations, and facilities.
There are many firms that provide these services. The master facility
plan defines, and rigorously evaluates, current and future options
including no action, delay, and modifications of current service
capabilities against multiple demand and volume scenarios. This
external assessment would have a significant influence on whether
national system office staff will evaluate the potential project as
sufficiently competitive to submit. The external consultants and system
staff collectively identify trends that will affect in- and out-patient
utilization and how those factors would manifest themselves in that
specific community and in the organization's facilities. That detailed
strategy, planning scenario, options, and facility-concepts testing
process takes 6-8 months to complete. At every evaluation step in the
process, the external consultants' findings are reviewed with the local
regional health system.
Step 2: Project Review Upon Submission
If a project obtains a positive review in the ``master facility
plan,'' a conceptual project application package is created. This
includes the master facility plan, preferred options and approaches to
the project with a detailed integrated strategy, operating, and
financial plan demonstrating various, but hopefully a high, cost-
benefit ratio. The project is then formally entered into the capital
project submission and review process. Routinely, large national
systems have a multi-disciplinary team of experts (``Capital Project
Review Team'') who review the conceptual project and its plan in
entirety and provide a written analysis. Those experts generally are
not involved in the local regional health system's operations and
therefore can independently evaluate and rank all competing projects
from the various local regional systems. The Capital Project Review
Team (``CPRT'') (made up of planning, finance, and operations staff
integrated with design, construction, technology, and contracting
staff) provide the ability to evaluate all potential aspects of a
project. These experts may have selected the outside experts to perform
the master facility plan. Their assessments coupled with input from the
submitting regions' staff are vital to determining the project's
viability, rationality, priority, and timing.
Acceptance by the CPRT is paramount for a project to proceed into
the review portion of the process. The CPRT's rejection of a project
would demand that the conceptual project and its plan be reworked. The
CPRT team's acceptance is documented in a written summary of the
conceptual project with specific cost/benefit metrics and forwarded to
a system-wide committee (``System-Wide Committee'') charged with
allocating the limited 5-year forward-looking capital project budget.
The capital budget is determined by the financial capacity of the whole
national system's financial capacity and cannot exceed established
limits in order to maintain credit ratings. Therefore, project ranking
is critical. The System-Wide Committee would approve, pend, or deny a
project. Approval by the Committee only means that the project can be
imbedded in the multi-year ISFO Plan of the local regional system and
has been ``preliminary'' approved subject to subsequent detailed
analyses and agreed upon implementation timing.
Step 3: Preliminary Approval of Capital Projects
Once the preliminary approval is obtained, the local regional
health system would commence to develop a functional design and
operating program as well as an architectural schematic design. Upon
completion of that work, which may be overseen by a system-wide
facilities manager, the project is resubmitted to the CRPT for
analysis. If the CRPT's analysis concludes that the preliminary-
approved project will meet operating and financial objectives as
originally submitted, it will recommend the project back the System-
Wide Committee for a second approval review. The System-Wide Committee
can approve, pend, or deny a project when the project is compared to
other projects on the Committee's priority list and based on the
system's current available capital. If a project exceeds a certain cost
(e.g. $50 million) the project must go to the Board of Directors of the
national system for approval. If the project was approved, then a
``Not-To-Exceed'' Budget'' is created and the project is subjected to a
``best practices test'' to ensure that it will be the best possible
facility before going to detailed design and bidding.
Step 4: Final Approval for Capital Projects
After the second national system approval, the project enters
detailed design and budgeting. The expectation is that the results of
this activity would result in a project ready for construction bidding.
If during the detailed design and budgeting process, the project
appears to have exceeded its approved scope or the detailed cost
estimates determine that the project will exceed budget, the project is
halted for a review with the system-wide CPRT and potentially
facilities consults. If the capital costs cannot be modified to meet
the budget and the performance objectives, then a project can be
altered or canceled. Therefore, there is a careful focus at the
preliminary stages of this process to ensure that the estimates
employed are reasonable and consistent with industry standards. If the
project moves forward to bidding and contracting, routine meetings,
between regional management and the CPRT and facilities staff at the
system-wide office, would occur (as frequently as monthly) to review
time schedule and budget adherence. Any variation could result in the
project being returned for a review by the senior executive level
System-Wide Committee or the Board of Directors of the national system.
This process could, in theory, take only 2 years to get to
drawings. However, based on the need to have orderly long term capital
planning this process is more likely to have an elapsed time of 3 to 7
years. This necessitates extremely thoughtful and disciplined ISFO Plan
processes and analytic capabilities.
Concepts to Potentially Consider:
In many communities, veterans have significant medical needs that
cross the continuum of care and require specialized professionals. In
our region there are hospitals with excess facility and clinical
capacity, recognized high quality services, and experience with caring
for active-duty personnel and veterans. Perhaps the VA should consider
how to encourage public-private partnerships that would meet veterans
and active duty military needs using existing resources in communities
in which the beneficiaries reside.
With implementation of new electronic health information exchanges
between civilian and military health providers, access to medical
history, testing results, and medical records will be even faster than
before. Perhaps the VA might consider the alternatives of contracting
with community physicians and hospitals to create quick access to care
without the costs of building new facilities.
Thank you for letting me share some information and perspectives.
Respectfully,
Peter Heckathorn, CMPE
Executive Vice President
MATERIAL SUBMITTED FOR THE RECORD
Office of Public Affairs Washington, DC
Media Relations (202) 461-7600
......................... www.va.gov
Department of Veterans Affairs News Release
FOR IMMEDIATE RELEASE
February 10, 2011
VA & HUD Issue First-Ever Report on Homeless Veterans
Assessment Key to Preventing and Ending Homelessness
WASHINGTON--For the first time, the Department of Veterans Affairs
(VA) and the Department of Housing and Urban Development today
published the most authoritative analysis of the extent and nature of
homelessness among Veterans. According to HUD and VA's assessment,
nearly 76,000 Veterans were homeless on a given night in 2009 while
roughly 136,000 Veterans spent at least one night in a shelter during
that year.
This unprecedented assessment is based on an annual report HUD
provides to Congress and explores in greater depth the demographics of
Veterans who are homeless, how the number of Veterans compare to others
who are homeless, and how Veterans access and use the Nation's homeless
response system. HUD's report, Veteran Homelessness: A Supplement to
the 2009 Annual Homeless Assessment Report to Congress, examines the
data in the department's annual report to Congress in-depth.
``With our Federal, State and community partners working together,
more Veterans are moving into safe housing,'' said Secretary of
Veterans Affairs Eric K. Shinseki. ``But we're not done yet. Providing
assistance in mental health, substance abuse treatment, education and
employment goes hand-in-hand with preventive steps and permanent
supportive housing. We continue to work towards our goal of finding
every Veteran safe housing and access to needed services.''
Last June, President Obama announced the Nation's first
comprehensive strategy to prevent and end homelessness, including a
focus on homeless Veterans. The report, Opening Doors: Federal
Strategic Plan to Prevent and End Homelessness, puts the country on a
path to end Veterans and chronic homelessness by 2015; and to ending
homelessness among children, family, and youth by 2020. Read more about
the Administration's strategic plan to prevent and end homelessness in
America.
__________
Key Findings of Opening Doors: Federal Strategic Plan
to Prevent and End Homelessness
More than 3,000 cities and counties reported 75,609
homeless Veterans on a single night in January of 2009; 57 percent were
staying in an emergency shelter or transitional housing program while
the remaining 43 percent were unsheltered. Veterans represent
approximately 12 percent of all homeless persons counted nationwide
during the 2009 `point-in-time snapshot.'
During a 12-month period in 2009, an estimated 136,000
Veterans--or about 1 in every 168 Veterans--spent at least one night in
an emergency shelter or transitional housing program. The vast majority
of sheltered homeless Veterans (96 percent) experienced homelessness
alone while a much smaller share (four percent) was part of a family.
Sheltered homeless Veterans are most often individual white men between
the ages of 31 and 50 and living with a disability.
Low-income Veterans are twice as likely to become
homeless compared to all low-income adults. HUD and VA also examined
the likelihood of becoming homeless among American Veterans with
particular demographic characteristics. In 2009, twice as many poor
Hispanic Veterans used a shelter at some point during the year compared
with poor non-Hispanic Veterans. African American Veterans in poverty
had similar rates of homelessness.
Most Veterans who used emergency shelter stayed for only
brief periods. One-third stayed in shelter for less than 1 week; 61
percent used a shelter for less than 1 month; and 84 percent stayed for
less than 3 months. The report also concluded that Veterans remained in
shelters longer than did non-Veterans. In 2009, the median length of
stay for Veterans who were alone was 21 days in an emergency shelter
and 117 days in transitional housing. By contrast, non-veteran
individuals stayed in an emergency shelter for 17 days and 106 days in
transitional housing.
Nearly half of homeless Veterans were located in
California, Texas, New York and Florida while only 28 percent of all
Veterans were located in those same four States.
The report studied the path homeless Veterans take into
the shelter system and found most Veterans come from another homeless
location and few entered the shelter system from their own housing or
from housing provided by family or friends.
Sheltered homeless Veterans are far more likely to be
alone rather than part of a family household; 96 percent of Veterans
are individuals compared to 63 percent in the overall homeless
population.
For more information on VA's efforts to end homelessness among
Veterans, visit VA's Web page at www.va.gov/homelessness.
[The VA/HUD's report, ``Veteran Homelessness: A Supplement to the
2009 Annual Homeless Assessment Report to Congress,'' will be retained
in the Committee files.]
U.S. Government Accountability Office
Washington, DC.
April 20, 2011
The Honorable Jeff Miller
Chairman
Committee on Veterans' Affairs
House of Representatives
Subject: Response to Question for the Record; Committee on Veterans'
Affairs, April 5, 2011, Hearing on ``Deconstructing the U.S. Department
of Veterans Affairs Construction Planning''
Dear Mr. Chairman:
This letter responds to your question during the April 5, 2011,
hearing entitled, Deconstructing the U.S. Department of Veterans
Affairs Construction Planning.
We stated that we would answer by submitting a written response for
the record. Our answer to the question is enclosed and is based on our
previous work, updates to that work, and our knowledge of the areas
addressed. Our previous work was conducted in accordance with GAO's
quality assurance framework or generally accepted government auditing
standards. We also asked the Department of Veterans affairs to verify
the factual content of our response, and we incorporated their
clarifications accordingly.
If you have any questions or would like to discuss our response,
please contact me at (202) 512-2834 or [email protected].
Sincerely yours,
Lorelei St. James
Acting Director, Physical Infrastructure Issues
Enclosure
__________
Response to Hearing Question for the Record
Deconstructing the U.S. Department of Veterans Affairs
Construction Planning
April 5, 2011
Committee on Veterans' Affairs, U.S. House of Representatives
Question for Lorelei St. James, Acting Director, Physical
Infrastructure Issues,
U.S. Government Accountability Office
Question from Chairman Jeff Miller
Do you know which of those suggestions the GAO made to VA were
implemented [regarding recommendations in our report, VA Construction:
VA is Working to Improve Initial Project Cost Estimates but Should
Analyze Cost and Risk Schedules, GAO-10-189 dated December 14, 2009]?
As a part of its 2012 Congressional budget submission, VA provided
an update on actions taken to implement GAO's recommendations regarding
VA's cost estimate process.\1\ According to VA, these recommendations
are partially implemented and are on target to be fully implemented in
fiscal year 2011. We also asked VA to provide any updates to the
implementation status. GAO publicly reports on agency progress in
implementing recommendations--including those made to VA in GAO-10-189.
GAO will continue to monitor and follow up on the implementation of the
recommendations made to VA on this matter. More specifically:
---------------------------------------------------------------------------
\1\ The Department of Veterans Affairs: FY 2012 Budget Submission
Summary Volume, Volume I of 4, (Washington, D.C.: February 2011).
Recommendation 1: To provide a realistic estimate of when a
construction project may be completed as well as the risks to the
project that could be mitigated, we recommend that the Secretary of
Veterans Affairs direct the Office of Construction and Facilities
Management (CFM) to require the use of an integrated master schedule
for all major construction projects.\2\ This schedule should integrate
all phases of project design and construction.
---------------------------------------------------------------------------
\2\ An integrated master schedule should be horizontally and
vertically linked. The schedule should be horizontally integrated,
meaning that it should link the products and outcomes associated with
already sequenced activities. The schedule should also be vertically
integrated, meaning that traceability exists among varying levels of
activities and supporting tasks and sub-tasks.
Action Taken: VA has reported progress, but has not yet
fully implemented this recommendation. In VA's 2012 Congressional
Budget Submission, VA reported that it was updating its internal
guidance and requirements to incorporate integrated master schedules
for all major construction projects. In the meantime, VA reported that
at the outset of each new project, its project management teams were
developing integrated master schedules for both the design and
construction phases. According to VA, this recommendation will be fully
---------------------------------------------------------------------------
implemented in fiscal year 2011.
Recommendation 2: To provide a realistic estimate of when a
construction project may be completed as well as the risks to the
project that could be mitigated, the Secretary of VA should direct CFM
to conduct a schedule risk analysis, when appropriate, based on the
project's cost, schedule, complexity, or other factors. Such a risk
analysis should include a determination of the largest risks to the
project, a plan for mitigating those risks, and an estimate of when the
project will be finished if the risks are not mitigated.
Action Taken: VA has reported progress, but has not yet
fully implemented this recommendation. In its 2012 Congressional Budget
Submission, VA reported that this recommendation was being incorporated
into its internal guidance. In the meantime, it has updated its
instructions to architectural/engineering contractors to reflect the
need to consider schedule risk analysis during schedule development.
According to VA, this recommendation also will be fully implemented in
fiscal year 2011.
Recommendation 3: To improve estimates of the cost of a major
construction project as well as the risks that may influence the cost
and how these risks can be mitigated, the Secretary of VA should direct
CFM to conduct a cost risk analysis of major construction projects.
Action Taken: VA has reported progress, but has not yet
fully implemented this recommendation. In its 2012 Congressional Budget
Submission, VA reported that cost risk analysis considerations are also
being addressed through updates of internal guidance. VA noted that the
schedule risk considerations that architectural/engineering contractors
were being instructed to consider, described above, would enable a
better assessment of cost risk in the interim. According to VA, this
recommendation also will be fully implemented in fiscal year 2011.
Committee on Veterans' Affairs
Washington, DC.
May 13, 2011
The Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420
Dear Mr. Secretary:
In reference to our full Committee hearing entitled,
``Deconstructing the Department of Veterans Affairs Construction
Planning,'' that took place on April 5, 2011, I would appreciate it if
you could answer the following hearing questions by the close of
business on June 10, 2011.
1. GAO's recent report on VA real property did not assess the
extent to which the results of Strategic Capital Investment Planning
(SCIP) are reflected in the President's fiscal year 2012 budget. How
does SCIP respond to GAO's recommendation to provide the results of
your capital planning efforts, including details on the estimated cost
of all future projects, to Congress on a yearly basis? How will
effectiveness measured be reported to Congress?
2. In the Department's fiscal year 2012 budget submission's
discussion of the SCIP process, utilization gap is defined as ``the
difference between current workload and projected 2018 demand.'' When
conducting future capital investment planning, did VA look at projected
utilization rates beyond 2018, especially considering the Department's
aging patient population? If not, why not? What is the justification
behind the decision to project demand 7 years ahead to 2018?
3. Currently, activation and operational costs are not included
in the SCIP analysis. However, the Committee was told that the
Department was working on a plan to account for these crucial costs as
part of SCIP. Please provide details as to how you intend to estimate
these costs and make it transparent. Further, please provide an
estimate for activation and operational costs for the new medical
facility in Orlando, FL; New Orleans, LA; Denver, CO; and Las Vegas, NV
as well as each major medical facility project submitted in the FY 2012
budget.
4. In January, the Government Accountability Office (GAO) issued
a report on VA Real Property entitled ``Realignment Progressing, but
Greater Transparency about Future Priorities is Needed.'' You concurred
with their recommendation to provide Congress with full SCIP results
and subsequent capital planning efforts, including details on estimated
future project costs annually. When can we expect to receive that
information from the Department? Why was that information not provided
previously?
5. In the past, GAO has reported that VA and the Department of
Defense (DoD) lacked a joint nationwide market analysis to obtain
information on what their combined future workloads in the areas of
services, facilities, and patient needs would be and lacked performance
measures that would be useful for evaluating how well they are
achieving joint health care resource-sharing goals. Did SCIP address
any of these deficiencies? If so, please provide a detailed account as
to how VA conducted a nationwide market analysis to obtain information
on what the VA and DoD combined future workloads were in the areas of
services, facilities, and patient needs and what performance measures
were used to evaluate if and how well you are achieving joint health
care resource-sharing goals.
6. How will VA measure the effectiveness of SCIP, and how will VA
inform Congress of its effectiveness?
7. GAO's recent report on VA real property did not assess the
extent to which the results of SCIP are reflected in the President's
fiscal year 2012 budget. How does SCIP respond to GAO's recommendation
to provide the results of your capital planning efforts, including
details on the estimated cost of all future projects, to Congress on a
yearly basis? To what extent does SCIP define the gaps in meeting its
capital investment needs?
8. The Department's total capital budget for FY 2012 is
relatively low when compared with the SCIP estimated magnitude cost
over the full 10 years. Please provide the Committee more detail on how
the successive requests in following years will come to meet the
estimated total SCIP costs.
9. Are all of the 10-year SCIP projections strictly based on a
10-year patient projection model? If not, please describe those
variations. Please describe what tools the Department uses to arrive at
its projected patient workloads at the 5-, 10-, and 20-year forecasts.
10. What methods, including Milliman utilization projection data,
were used in VA analysis of options for future construction?
11. What impact, if any, do you believe the Patient Protection and
Affordable Care Act will have on utilization rates for VA health care?
Does VA expect that more low-income veterans will utilize private
health care providers as a result of this law? If so, how will that
impact the Department's capital investments?
12. In your written statement, you emphasized that in addition to
ensuring access and safety for veterans and employees in VA facilities,
``we must also ensure the efficient and effective use of taxpayer's
dollars.'' Given that, please explain the discrepancy between the
amount the Department identified as necessary to fulfilling the needs
identified in the 10-year capital action plan (between $53 billion and
$65 billion according to the Department's FY 2012 budget submission)
and a FY 2012 request of $2.876 billion, less than 5 percent of that
10-year number.
13. What performance measures, if any, do you intend to employ to
centrally monitor the implementation and impact of the SCIP plan and
how will VA inform Congress of the effectiveness of SCIP?
14. What weight, if any, does the Department place on the overall
fiscal condition of the Federal Government and the Nation's economy
when conducting long-term strategic property planning?
15. To what extent does SCIP define VA's overarching, national
strategy for its capital investments?
16. When did VA complete its most recent gap analysis, including
facility condition assessments, of its capital investments and what
were the results?
17. For access gap analysis under SCIP, please provide more
specific information on how the criteria of drive-time and distance
gaps are decided within a geographical area, and the likelihood of
these criteria being modified during the 10-year SCIP implementation.
18. What is VA doing to address challenges in managing its real
property, such as improving its project cost estimates?
19. How long does VA estimate it will take to complete the major
and minor construction projects that are ongoing?
20. What is the percent weighting factor for reducing excess
property that VA used to evaluate projects?
21. What are the factors and methodologies currently being
considered for identifying activation costs and annual costs of VA
facilities?
22. What will be the detailed recurring annual costs of the new
and replacement VA Medical Center facilities, including maintenance and
operation?
23. Of the 830 underutilized buildings identified by VA in the
April 5 hearing, how many are 60 years or older? Of these buildings 60
years or older, how many are leased and how many are owned by VA?
24. What is the total number of buildings leased by VA? What is
the total number of buildings owned by VA?
25. What plan is in place to speed up final disposition for the
underutilized facilities?
26. Do the targeted energy efficiency and cost savings of 30
percent higher than current building standards create higher costs or
slower contracting and construction than could otherwise be achieved?
What are the targeted energy efficiency and cost savings at other large
agencies?
27. The VA's Facility Condition Assessment (FCA) report compares
the correction cost of buildings in poor or critical condition compared
to the total replacement cost of the building. Is there a ratio of
those two numbers that definitively decides whether VA will move toward
one action or the other, and if so what is that ratio? If there is not
a definitive ratio in the FCA report, what are other factors that
dictate whether to correct versus replace a facility?
28. In a report recently submitted to the Committee by the
Secretary outlining construction and design contracts not awarded by
the end of the last fiscal year, the replacement medical center
facility in Denver, Colorado, was referenced. Funds have been
appropriated for this project since Fiscal Year 2004, and yet the Phase
I demolition was not awarded until April 2009. The report tells the
Committee that the ``project went from a replacement medical center to
a super clinic, then back to a replacement medical center on a smaller
(emphasis added) scale than the original project.'' Can you explain to
this committee how the planning started with one size, got
significantly bigger, then significantly smaller?
29. Another contract that was not awarded in the expected time
pertains to the replacement medical center in New Orleans. The city of
New Orleans and the state of Louisiana were expected to transfer the
remaining property to VA by early March 2011. Did this transfer happen?
a. Does the transfer mentioned in the report relate to
privately-owned property that officials have taken over
using eminent domain? How many residents have been
displaced because of this project?
30. Please provide a status update on all 10 of the projects
listed in that report.
31. What is the review process when revising a construction
project, such as a change in the square footage of the facility?
32. How and by whom are cost analyses conducted and reviewed by
the Department when examining facility construction options? What are
the contents of these analyses?
33. Has VA ever considered using an independent review process to
make an unbiased decision given all possible alternatives related to VA
facilities? If so, why has this process not been adopted yet?
34. What are VA's plans to reduce the $9.4 billion backlog in
repairs?
35. The Capital Asset Realignment for Enhanced Services (CARES)
process identified a gap in inpatient care in Far South TX. However,
the CARES Commission did not recommend constructing a small VA hospital
in this region because: a single location would not accommodate the
dispersed veteran population; the low volume need could not support a
full range of specialty care; and veterans would still be required to
travel to the San Antonio Veterans Affairs Medical Center for specialty
care. CARES did recommend constructing a large specialized outpatient
health care center (HCC) in collaboration with the University of Texas
Regional Academic Health Center and establishing contracts with the
large well-regarded multi-specialty private hospitals for inpatient
care in the region. In January of this year, VA opened a new Health
Care Center (HCC) at Harlingen, TX. However, some stakeholders remain
concerned that an inpatient VA medical center in Far South Texas is
essential. Did the Strategic Capital Investment Planning (SCIP) process
evaluate the need for an inpatient VA hospital in Far South Texas? If
so, please provide details as to the outcome of the SCIP evaluation.
Additionally, please provide VA's views on the sufficiency of the
existing infrastructure and services in Far South Texas to meet the
current and future demand for veterans' health care and any
recommendations for the need for enhanced services.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your response to
Diane Kirkland at [email protected]. If you have any
questions, please call 202-225-3527.
Sincerely,
JEFF MILLER
Chairman
__________
The Honorable Jeff Miller, Chairman
House Committee on Veterans Affairs
``Deconstructing the Department of Veterans Affairs Construction
Planning,'' April 5, 2011 Hearing
Question 1: GAO's recent report on VA real property did not assess
the extent to which the results of Strategic Capital Investment
Planning (SCIP) are reflected in the President's fiscal year 2012
budget. How does SCIP respond to GAO's recommendation to provide the
results of your capital planning efforts, including details on the
estimated cost of all future projects, to Congress on a yearly basis?
How will effectiveness measured be reported to Congress?
Response: The SCIP plan was released after the final GAO report was
issued. The SCIP plan lists the projects and estimated costs to be
addressed in FY 2012. It also details the projects (including location,
description, and estimated cost) and other investment levels needed to
meet gaps for fiscal years 2013-2021.
The SCIP process determines the investments needed to address gaps
in space, access, safety, facility condition, efficiencies, and
utilization. SCIP's main objective is to identify VA infrastructure
gaps and propose a systematic and integrated plan to address those
needs. Therefore, the current metrics used to measure effectiveness are
primarily process-focused. For example, a key measure was the
prioritized list of projects and 10-year SCIP plan delivered on-time
along with the Department's budget. Other measures that are tracked
include the number of VA staff who are trained on important SCIP
elements and requirements, and the percentage of projects in budget
execution that were reviewed during the SCIP process. In the future,
once projects are funded, constructed and in use, VA will be able to
measure their impact on the various SCIP-identified gaps. Measured
results will be included in future VA budget and SCIP submissions.
Question 2: In the Department's fiscal year 2012 budget
submission's discussion of the SCIP process, utilization gap is defined
as ``the difference between current workload and projected 2018
demand.'' When conducting future capital investment planning, did VA
look at projected utilization rates beyond 2018, especially considering
the Department's aging patient population? If not, why not? What is the
justification behind the decision to project demand 7 years ahead to
2018?
Response: Yes, VA looks at projected utilization rates across a 20-
year planning horizon to identify and plan appropriately for the
degrees of growth or decline across the planning horizon. SCIP uses a
10-year planning horizon (the current workload used in this case is
base year 2008 projections) as a realistic time frame for estimating
future capital requirements, but within the context of 20-year
projections. Analyzing long-term demand trends help ensure, for
example, projects are not over built where a near-term peak in demand
is followed by a steady decline. The 20-year projections are generated
by VA's Enrollee Health Care Projection Model, which is supported by
Milliman, Inc., the largest health care actuarial consultancy in the
U.S.
Question 3: Currently, activation and operational costs are not
included in the SCIP analysis. However, the Committee was told that the
Department was working on a plan to account for these crucial costs as
part of SCIP. Please provide details as to how you intend to estimate
these costs and make it transparent. Further, please provide an
estimate for activation and operational costs for the new medical
facility in Orlando, FL; New Orleans, LA; Denver, CO; and Las Vegas, NV
as well as each major medical facility project submitted in the FY 2012
budget.
Response: VA is currently working on a methodology to include
estimated activation costs for future SCIP projects. These costs will
be included in FY 2013 and future plans.
Question 4: In January, the Government Accountability Office (GAO)
issued a report on VA Real Property entitled ``Realignment Progressing,
but Greater Transparency about Future Priorities is Needed.'' You
concurred with their recommendation to provide Congress with full SCIP
results and subsequent capital planning efforts, including details on
estimated future project costs annually. When can we expect to receive
that information from the Department? Why was that information not
provided previously?
Response: The SCIP plan lists the projects and estimated costs to
be addressed in FY 2012. It also details the projects (including
location, description, and estimated cost) and other investment levels
needed to meet gaps for fiscal years 2013-2021. Prior VA 5-Year Capital
Plans did include costs for budget year projects and estimated costs
for other high priority major construction and leasing projects. The
future costs in the current SCIP plan were provided along with the
assumption that they are a ``snap shot'' of magnitude costs that will
be refined as projects move through the budget process including
preparation of OMB 300 business cases, prospectus details provided in
budget submission and at completion of project design.
Question 5: In the past, GAO has reported that VA and the
Department of Defense (DoD) lacked a joint nationwide market analysis
to obtain information on what their combined future workloads in the
areas of services, facilities, and patient needs would be and lacked
performance measures that would be useful for evaluating how well they
are achieving joint health care resource-sharing goals. Did SCIP
address any of these deficiencies? If so, please provide a detailed
account as to how VA conducted a nationwide market analysis to obtain
information on what the VA and DoD combined future workloads were in
the areas of services, facilities, and patient needs and what
performance measures were used to evaluate if and how well you are
achieving joint health care resource-sharing goals.
Response: The SCIP process did not include information on combined
VA/DoD future workloads in the areas of services, facilities, and
patient needs. However, both VA and DoD capital investment
methodologies include criteria that credits these types of projects
during the prioritization and ranking process. In addition, the Joint
Executive Council (JEC) through its Construction Planning Committee
(CPC) is currently exploring ways to develop more robust VA/DoD joint
strategic capital planning. This includes realigning existing planning
processes and funding mechanisms to allow for additional joint ventures
that would enhance services to Veterans.
All construction projects submitted for the current VA Strategic
Capital Investment Planning (SCIP) process were reviewed by staff in
the DoD Collaboration Office to determine opportunities for joint
construction. DoD staff also reviewed the current SCIP submissions and
participated in the SCIP review process. This transparency of VA
construction proposals and evaluation process provided multiple chances
for DoD and VA to identify future joint construction opportunities
throughout the SCIP. VA is invited to participate in DoD's Capital
Investment Decision Model (CIDM) process when DoD will prioritize
proposed construction projects.
There currently are feasibility studies being conducted in Fort
Leavenworth, KS; Wichita, KS; and Bremerton, WA to determine the need/
justification for joint construction projects in those geographic
areas, again, based on populations and workload. The Fort Leavenworth
study is a joint effort between the Army and VA; Wichita is between Air
Force and VA; and Bremerton is between Navy and VA. All studies are
nearing completion. Pending this nationwide analysis, we have begun to
analyze joint markets where construction needs have been identified, to
determine the combined services, facilities, and patient needs. A
combined multi-service market analysis has just been completed for the
Oahu market. This study examined the populations and health care
requirements for all military markets including Army, Navy, and Air
Force, plus VA.
Question 6: How will VA measure the effectiveness of SCIP, and how
will VA inform Congress of its effectiveness?
Response: The SCIP process determines the investments needed to
address gaps in space, access, safety, facility condition,
efficiencies, and utilization. SCIP's main objective is to identify VA
infrastructure gaps and propose a systematic and integrated plan to
address those needs. Therefore, the current metrics used to measure
effectiveness are primarily process-focused. For example, a key measure
was the prioritized list of projects and 10-year SCIP plan delivered
on-time along with the Department's budget. Other measures that are
tracked include the number of VA staff who are trained on important
SCIP elements and requirements, and the percentage of projects in
budget execution that were reviewed during the SCIP process. In the
future, once projects are funded, constructed and in use, VA will be
able to measure their impact on the various SCIP-identified gaps.
Measured results will be included in future VA budget and SCIP
submissions.
Question 7: GAO's recent report on VA real property did not assess
the extent to which the results of SCIP are reflected in the
President's fiscal year 2012 budget. How does SCIP respond to GAO's
recommendation to provide the results of your capital planning efforts,
including details on the estimated cost of all future projects, to
Congress on a yearly basis? To what extent does SCIP define the gaps in
meeting its capital investment needs?
Response: The SCIP plan lists the projects to be addressed in FY
2012. It also details the projects (including location, description,
and estimated cost) and other investment levels needed to meet gaps for
fiscal years 2013-2021. The future costs in the current SCIP plan were
provided along with the assumption that they are a ``snap shot'' of
magnitude costs that will be refined as projects move through the
budget process including preparation of OMB 300 business cases,
prospectus details provided in budget submission and at completion of
project design. SCIP incorporates service gaps to identify the
Department's capital investment needs. Service gaps are identified at
the Departmental level for the Administrations.
Question 8: The Department's total capital budget for FY 2012 is
relatively low when compared with the SCIP estimated magnitude cost
over the full 10 years. Please provide the Committee more detail on how
the successive requests in following years will come to meet the
estimated total SCIP costs.
Response: An important goal of SCIP was to identify the full extent
of the problem. The SCIP 10-Year Action Plan identified $53-$65 billion
in magnitude cost estimates over the course of the 10-year planning
horizon needed to close performance gaps. A second goal of SCIP was to
start a national conversation about the best way to close our gaps and
ensure we are providing Veterans, their families, and their survivors
with the best services and care. VA's 2012 budget submission reflects
the hard choices that were made in order to balance the construction
needs identified in the SCIP 10-year plan and other VA priorities (such
as the cost to provide medical care and Veteran benefits and services).
The SCIP plan provides a rational, data-driven strategic framework
to ensure capital investments are focused on the most critical
infrastructure needs first and these investments are then funded in
priority order. All projects are prioritized based on identified needs
and the ability to close known performance gaps. The SCIP plan will be
updated every year allowing for changes in health care delivery
technologies, cost saving solutions and changing Veteran demographics
to be incorporated into the process. VA will work with Congress and the
VSO's to implement the SCIP plan. We look forward to working with
Congress to come up with effective solutions to closing these gaps.
Question 9: Are all of the 10-year SCIP projections strictly based
on a 10-year patient projection model? If not, please describe those
variations. Please describe what tools the Department uses to arrive at
its projected patient workloads at the 5-, 10-, and 20-year forecasts.
Response: No, the utilization (patient) projection model produces
annual utilization projections out over a 20-year planning horizon. The
20-year projections are generated by VA's Enrollee Health Care
Projection Model (EHCPM), which is supported by Milliman, Inc., the
largest health care actuarial consultancy in the U.S. The EHCPM is an
assumption-based demand projection model. The multitude of assumptions
used in this model make it possible to project future utilization and
expenditures by making explicit assumptions (through research and
analysis) about how specific utilization and expenditure patterns may
differ from current patterns under various scenarios. The model
projects enrollment, utilization, and expenditures for the enrolled
Veteran population for over 60 categories of health care services for
each of the 20 projection years, allowing multiple planning horizon
options. First, the model determines how many Veterans will be enrolled
in VA in each projection year and their age, priority, and geographic
location. Next, the model projects the total health care services
needed by those enrollees and then estimates the portion of that care
that those enrollees will demand from VA.
Question 10: What methods, including Milliman utilization
projection data, were used in VA analysis of options for future
construction?
Response: SCIP is a data driven process based on service and
infrastructure gaps. Future construction projects are defined as part
of SCIP based on the gaps identified for closure. Each gap area has a
process or method used to identify the service gap and quantity of gap
that needs to be addressed. For workload/utilization, the Milliman
model projects workload need in the future. This future need is then
compared with the current actual workload facility by facility. In
cases where future demand is projected to be higher than current
demand, a gap is identified that must be filled through SCIP. The
workload/utilization demand projections from Milliman are also used to
generate the space gap used in SCIP. Using VA's space criteria, the
Milliman projections are converted into actual Gross Square Feet
required, then compared to the current space available or space that
will become available in the future to meet this demand. The gap is
determined by comparing the future need for space with the available
space, resulting in either more space being required or excess space
for disposal. The remaining gaps, such as security, energy, access, and
condition, use current data to compare to a standard or target to
define the service gap to be addressed in SCIP. As shown here, SCIP
uses detailed methods and processes to define all gaps that potentially
could require future construction.
Question 11: What impact, if any, do you believe the Patient
Protection and Affordable Care Act will have on utilization rates for
VA health care? Does VA expect that more low-income veterans will
utilize private health care providers as a result of this law? If so,
how will that impact the Department's capital investments?
Response: VHA created a task force in 2009 that continues to
monitor proposed health care reform legislation for potential impacts
on VHA health care. VHA does not yet have any projections on impact to
the system as the regulatory process is still in its infancy.
Question 12: In your written statement, you emphasized that in
addition to ensuring access and safety for veterans and employees in VA
facilities, ``we must also ensure the efficient and effective use of
taxpayer's dollars.'' Given that, please explain the discrepancy
between the amount the Department identified as necessary to fulfilling
the needs identified in the 10-year capital action plan (between $53
billion and $65 billion according to the Department's FY 2012 budget
submission) and a FY 2012 request of $2.876 billion, less than 5
percent of that 10-year number.
Response: An important goal of SCIP was to identify the full extent
of the problem. The SCIP 10-Year Action Plan identified $53-$65 billion
in magnitude cost estimates over the course of the 10-year planning
horizon needed to close performance gaps. A second goal of SCIP was to
start a national conversation about the best way to close our gaps and
ensure we are providing Veterans, their families, and their survivors
with the best services and care. VA's 2012 budget submission reflects
the hard choices that were made in order to balance the construction
needs identified in the SCIP 10-year plan and other VA priorities (such
as the cost to provide medical care and Veteran benefits and services).
The SCIP plan provides a rational, data-driven strategic framework to
ensure capital investments are focused on the most critical
infrastructure needs first and these investments are then funded in
priority order. All projects are prioritized based on identified needs
and the ability to close known performance gaps. The SCIP plan will be
updated every year allowing for changes in health care delivery
technologies, cost saving solutions and changing Veteran demographics
to be incorporated into the process. VA will work with and keep
Congress informed of progress on implement of the SCIP. We look forward
to working with Congress to come up with effective solutions to closing
these gaps.
Question 13: What performance measures, if any, do you intend to
employ to centrally monitor the implementation and impact of the SCIP
plan and how will VA inform Congress of the effectiveness of SCIP?
Response: The SCIP process determines the investments needed to
address gaps in space, access, safety, facility condition,
efficiencies, and utilization. SCIP's main objective is to identify VA
infrastructure gaps and propose a systematic and integrated plan to
address those needs. Therefore, the current metrics used to measure
effectiveness are primarily process-focused. For example, a key measure
was the prioritized list of projects and 10-year SCIP plan delivered
on-time along with the Department's budget. Other measures that are
tracked include the number of VA staff who are trained on important
SCIP elements and requirements, and the percentage of projects in
budget execution that were reviewed during the SCIP process. In the
future, once projects are funded, constructed, and in use, VA will be
able to measure their impact on the various SCIP-identified gaps.
Measured results will be included in future VA budget and SCIP
submissions.
Question 14: What weight, if any, does the Department place on the
overall fiscal condition of the Federal Government and the Nation's
economy when conducting long-term strategic property planning?
Response: VA works closely with the Office and Management and
Budget in order to ensure the fiscal condition of the Nation is fully
integrated into our long term planning. OMB provides the current and
economic indexes rates (such as discount, inflation rate and economic
indicators) used in developing many of our capital planning tools and
documents.
Question 15: To what extent does SCIP define VA's overarching,
national strategy for its capital investments?
Response: The Strategic Capital Investment Planning's (SCIP)
approach to capital programs reflects VA's priorities and good
stewardship of resources to maximize benefits and services to Veterans.
SCIP demonstrates effectiveness and accountability by developing a
comprehensive review of requirements and prioritizing construction
needs across all VA organizations. VA's capital program is driven by
the strategic direction embodied in SCIP--to close performance gaps and
provide sufficient capital to ensure Veterans receive the best service
in facilities that are:
Safe and secure
Located closer to where Veterans live
Modern and state-of-the-art
Capable of supporting the demand for services and
benefits
Able to serve homeless Veterans through use of vacant
facilities
Question 16: When did VA complete its most recent gap analysis,
including facility condition assessments, of its capital investments
and what were the results?
Response: VA completes gap analysis for SCIP on an annual basis.
The gap analysis for FY 2012 SCIP was completed in January 2010. Each
gap area represented in SCIP, such as space or condition, has an
analysis performed in support of the annual process. For example,
condition assessments are completed throughout the year and summarized
in the annual gap analysis. Other gap areas, such as space and energy,
are tracked throughout the year and the final end of year numbers are
used to perform the gap analysis. The results of the gap analysis
performed for SCIP are represented in VA's FY 2012 budget for each gap
area, by administration.
Question 17: For access gap analysis under SCIP, please provide
more specific information on how the criteria of drive-time and
distance gaps are decided within a geographical area, and the
likelihood of these criteria being modified during the 10-year SCIP
implementation.
Response: VA's current drive-time access guidelines grew out of
VA's recognition that improving access to Veteran care was necessary to
improve the quality and value of services. As early as the mid-1990s, a
structured process of objective data capture, systematic measurement,
and monitoring of outcomes and benchmarks was developed as a vehicle
for VHA leaders to manage access performance and promote
accountability. The current drive-time guidelines, developed during the
Capital Asset Realignment for Enhanced Services (CARES) study, have
been used by VHA to assess and manage health care access, and when
making Capital asset decisions. A work group is currently conducting a
comprehensive review of existing drive-time guidelines and will make
recommendations for improvements as necessary. The recommendations and
findings of the work group will enhance VHA's capability to plan for
access expansion as well as make accurate policy decisions regarding
Veterans' access to health care and capital budgeting.
Question 18: What is VA doing to address challenges in managing its
real property, such as improving its project cost estimates?
Response: VA does indeed face many challenges in managing its
capital portfolio of over 5,500 owned buildings (143 million square
feet), with an average age greater than 60 years. (VA's portfolio
includes 1,594 historic buildings.) SCIP represents the best mix of
projects including the action plans that contain magnitude cost
estimates based on a ``snapshot'' in time. Project costs are refined
and improved as the project moves along in the budget process--
beginning with the magnitude cost found in the action plan, refined at
the business case submission, and later through the detailed OMB 300
business case. The estimated costs are improved and provided in the
project prospectus in the budget submission and may be updated again at
completion of project design. VA is also working to develop a
methodology for including activation (project estimated start-up cost)
in future SCIP plans beginning with the 2013 SCIP submission.
Question 19: How long does VA estimate it will take to complete
major and minor construction projects that are ongoing?
Response: The level of major construction funding provided will
have a critical and direct impact on the time it takes to complete all
ongoing projects. There are currently 23 partially funded major
construction projects that total approximately $6 billion in remaining
need. In order to maximize resources, VA requests funds for phased
major projects based on the project's schedule and its ability to
obligate in the request year. VA anticipates a large majority of
partially funded minor construction projects will be obligated by the
end of FY 2012.
Question 20: What is the percent weighting factor for reducing
excess property that VA used to evaluate projects?
Response: The two sub-criteria focused specifically on reducing
excess property are Space--Repurposing and Space--Demolition, each of
which are valued at a maximum of 1.2 percent of the project score.
However, capital projects were evaluated on 18 distinct sub-criteria
for the FY 2012 SCIP process, several of which can apply to a project
that reduces excess property. The Repurposing and Demolition sub-
criteria are part of the Right-Sizing Inventory major criterion that is
ranked 5th out of the 6 major criteria. Another component of the
project score is the rating factor applied to each sub-criterion. The
rating factor applied to both the Repurposing and Demolition sub-
criteria is the percentage of the gap filled. Not all projects will
earn a rating of 1 (the highest possible rating) for these sub-
criteria.
A project that reduces excess space can earn points for various
other sub-criteria. For example, a project that reduces excess property
could also receive points for any combination of the following sub-
criteria: Safety/Compliance (10.9 percent); Seismic (11.4 percent);
Supporting Initiatives (3.3 percent); Energy Standards (3.9 percent);
Best Value Solutions (3.6 percent); and Maximize Efficiencies (1.2
percent). Percentage values represent the maximum point value.
Major Construction Projects Funded FY 2006-2011
----------------------------------------------------------------------------------------------------------------
Total
Location Description Estimated Funding Estimated Status
Cost Year Completion Date
----------------------------------------------------------------------------------------------------------------
VHA Major Construction Projects:
----------------------------------------------------------------------------------------------------------------
Gainesville FL Correct Patient 114,200,000 2004 15-Jun-11........ CO
Privacy
Deficiencies
----------------------------------------------------------------------------------------------------------------
Las Vegas NV New Medical 593,500,000 2004 30-Apr-13........ CO
Facility
(Overview)
----------------------------------------------------------------------------------------------------------------
Long Beach CA Seismic Corrections/ 129,545,000 2004 28-Feb-14........ CO
Clinical,B-7 & 126
----------------------------------------------------------------------------------------------------------------
Orlando FL New Medical 665,400,000 2004 30-Oct-12........ CO
Facility
(Overview)
----------------------------------------------------------------------------------------------------------------
Palo Alto CA Seismic 54,000,000 2004 30-Nov-11........ CO
Corrections, Bldg.
2 (Overview)
----------------------------------------------------------------------------------------------------------------
Pittsburgh PA Medical Center 295,594,471 2004 28-Feb-14........ CO
Consolidation
(Overview)
----------------------------------------------------------------------------------------------------------------
Atlanta GA Modernize Patient 24,534,000 2005 1-Feb-12......... CO
Wards (Overview)
----------------------------------------------------------------------------------------------------------------
Bay Pines FL Outpatient Clinic 89,800,000 2005 30-Sep-11........ CO
(Lee County)
----------------------------------------------------------------------------------------------------------------
San Juan PR Seismic Corrections 277,000,000 2005 30-Sep-14........ CO
Bldg. 1 (Overview)
----------------------------------------------------------------------------------------------------------------
Syracuse NY Addition For SCI 86,969,000 2005 13-Jul-12........ CO
Center (Overview)
----------------------------------------------------------------------------------------------------------------
Biloxi MS Restoration Of 304,000,000 2006 30-Nov-12........ CO
Hospital/
Consolidation of
Gulfport
(Overview)
----------------------------------------------------------------------------------------------------------------
Denver CO New Medical Center 800,000,000 2004/05 28-Feb-14........ CO
Facility
(Overview)
----------------------------------------------------------------------------------------------------------------
Fayetteville AR Clinical Addition 90,600,000 2006/08 20-Sep-12........ CO
----------------------------------------------------------------------------------------------------------------
New Orleans LA New Medical 995,000,000 2006 30-Dec-14........ CD
Facility (OV)
----------------------------------------------------------------------------------------------------------------
Columbia MO Operating Suite 25,830,000 2007 28-Jan-13........ CO
Replacement
----------------------------------------------------------------------------------------------------------------
Milwaukee WI Spinal Cord Injury 29,500,000 2007 31-May-11........ PC
Center
----------------------------------------------------------------------------------------------------------------
St. Louis MO Med Facility Improv 346,300,000 2007 TBD.............. CO
(JBD) & Cem Expansion
(Overview)
----------------------------------------------------------------------------------------------------------------
Palo Alto CA Centers for 716,600,000 2008 TBD.............. CO
Ambulatory Care/
Polytrauma-Blind
Rehabilitation
(Overview)
----------------------------------------------------------------------------------------------------------------
San Antonio TX Polytrauma Center, 66,000,000 2008 1-Apr-13......... CO
& Renovation of
Exist Bldg. 1
(Overview)
----------------------------------------------------------------------------------------------------------------
Tampa FL Polytrauma 231,500,000 2008 TBD.............. CO
Expansion/Bed
Tower (Overview)
----------------------------------------------------------------------------------------------------------------
American WA Seismic Corrections 52,600,000 2009 TBD.............. DD
Lake of Bldg. 81
----------------------------------------------------------------------------------------------------------------
Bay Pines FL Inpatient/ 158,200,000 2009 TBD.............. CO
Outpatient
Improvements
(Overview)
----------------------------------------------------------------------------------------------------------------
Bronx NY Spinal Cord Injury 225,900,000 2009 TBD.............. S/DD
Center (SCI)
(Overview)
----------------------------------------------------------------------------------------------------------------
Dallas TX Clinical Expansion 156,400,000 2009 TBD.............. DD
for Mental Health
----------------------------------------------------------------------------------------------------------------
Louisville KY New Medical TBD 2009 TBD.............. MP
Facility
----------------------------------------------------------------------------------------------------------------
Omaha NE Omaha--Replacement 560,000,000 2009 TBD.............. S/DD
Facility
----------------------------------------------------------------------------------------------------------------
Seattle WA B101 Mental Health 211,700,000 2009 TBD.............. DD
(Overview)
----------------------------------------------------------------------------------------------------------------
Walla Walla WA Multi Specialty 71,400,000 2009 TBD.............. CO
Care (Overview)
----------------------------------------------------------------------------------------------------------------
West Los CA Seismic 326,900,000 2009 TBD.............. DD
Angeles Corrections--Vario
us Bldgs.
(Overview)
----------------------------------------------------------------------------------------------------------------
Brockton MA Long-Term Care 188,000,000 2010 TBD.............. DD
Spinal Cord Injury
(SCI) (Overview)
----------------------------------------------------------------------------------------------------------------
Canandaigua NY New Construction 370,100,000 2010 TBD.............. S/DD
and Renovation
----------------------------------------------------------------------------------------------------------------
Long Beach CA Seismic 258,400,000 2010 TBD.............. DD
Corrections--Menta
l Health &
Community Living
Center
----------------------------------------------------------------------------------------------------------------
Palo Alto CA Livermore 354,300,000 2010 TBD.............. SD
Realignment (OV)
----------------------------------------------------------------------------------------------------------------
Perry Point MD Replacement CLC 90,100,000 2010 TBD.............. AE
----------------------------------------------------------------------------------------------------------------
Saint Louis MO New Bed Tower, 433,400,000 2010 TBD.............. AE
Research Building,
Parking Garage
(Overview)
----------------------------------------------------------------------------------------------------------------
Temple TX Information 10,552,000 2009 27-Jan-12........ CO
Technology (IT)
Building
----------------------------------------------------------------------------------------------------------------
San Diego CA SCI, Seismic 195,000,000 2010 TBD.............. DD
Corrections--(Over
view)
----------------------------------------------------------------------------------------------------------------
Sacramento CA Alameda Outpatient 208,600,000 2011 TBD.............. AE
Clinic
----------------------------------------------------------------------------------------------------------------
NCA Major Construction Projects:
----------------------------------------------------------------------------------------------------------------
San Diego CA Miramar Natl Cem-- 26,450,000 2006 20-Jan-12........ CO
Master Plan and
Phase I
Development of
Miramar Annex
----------------------------------------------------------------------------------------------------------------
Bakersfield CA New National 16,232,492 2008 20-Aug-11........ CO
Cemetery--Phase 1B
----------------------------------------------------------------------------------------------------------------
Columbia/ SC Ft. Jackson Natl 16,196,072 2008 10-Sep-11........ CO
Greenville Cem--New National
Cemetery--Phase 1B
Development
----------------------------------------------------------------------------------------------------------------
Ft. Sam TX Phase B-- 11,000,000 2008 1-May-13......... CD
Houston Infrastructure
Repairs (SHPO)
----------------------------------------------------------------------------------------------------------------
Jacksonville FL New Cemetery--Phase 16,166,438 2008 11-Jul-11........ CO
1 B Development
----------------------------------------------------------------------------------------------------------------
Philadelphia PA Washington Crossing 23,636,000 2008 14-Feb-12........ CO
Natl Cem--New
Cemetery--Phase 1B
Development
----------------------------------------------------------------------------------------------------------------
Sarasota FL New National 23,187,232 2008 12-Jul-12........ CO
Cemetery--Phase IB
Development
----------------------------------------------------------------------------------------------------------------
Bayamon PR Puerto Rico Natl 33,900,000 2009 16-Oct-12........ CO
Cem--Gravesite Exp
& Cemetery Improv
on Remaining Land
----------------------------------------------------------------------------------------------------------------
Bourne MA Massachusetts Natl 20,500,000 2009 15-Jun-13........ AA
Cem--Gravesite
Expansion &
Improvements--Phas
e 3
----------------------------------------------------------------------------------------------------------------
Calverton NY Gravesite Expansion 30,535,000 2009 9-Oct-11......... CO
And Columbaria
----------------------------------------------------------------------------------------------------------------
Elwood IL Abraham Lincoln 39,300,000 2010 6-Mar-12......... CO
Cem--Phase 2
Gravesite
Expansion
----------------------------------------------------------------------------------------------------------------
Houston TX Gravesite Expansion 35,000,000 2010 9-Jan-13......... CO
& Improvements--
Phase 4
----------------------------------------------------------------------------------------------------------------
Annville PA Indiantown Gap 23,500,000 2011 1-Oct-13......... CD
National Cemetery--
Phase 4 Expansion
----------------------------------------------------------------------------------------------------------------
Kent WA Tahoma National 25,800,000 2011 30-Dec-13........ CD
Cemetery--Phase 2
Expansion
----------------------------------------------------------------------------------------------------------------
Los Angeles CA Columbarium 27,600,000 2011 30-Oct-13........ CD
Expansion
----------------------------------------------------------------------------------------------------------------
Status Codes:
AA--Advertise & Award
AE--Selection of the AE Firm for Design
DD--Design Development
CD--Construction Documents
CO--Construction
S/DD--Schematics/Design Development
MP--Master Plan
Question 21: What are the factors and methodologies currently being
considered for identifying activation costs and annual costs of VA
facilities?
Response: VA is currently working with contractors to develop a
tool that will calculate all in non-recurring and recurring costs for
activating VHA facilities, which it expects to incorporate into its
Strategic Capital Investment Planning (SCIP) process in the 2013 budget
cycle. This model will factor in space type, change in mission,
incremental change in workload, locality, estimated construction
project costs, square footage, net new FTE, and IT requirements in
order to estimate non-recurring and recurring activation costs for IT
and total building activation needs. VA will continue to refine its
estimates over the course of the construction project using planned
equipment lists and FTE estimates as they become available.
Question 22: What will be the detailed recurring annual costs of
the new and replacement VA Medical Center facilities, including
maintenance and operation?
Response: The detailed recurring maintenance and operation cost of
new facilities (major construction) are included in the project
prospectus (Chapter 2) of Volume 4 of the VA construction budget
submission.
Question 23: Of the 830 underutilized buildings identified by VA in
the April 5 hearing, how many are 60 years or older? Of these buildings
60 years or older, how many are leased and how many are owned by VA?
Response: Of the identified underutilized buildings, VA has 662
buildings that are 60 years or older at the end of FY 2010. All are
owned by VA.
Question 24: What is the total number of buildings leased by VA?
What is the total number of buildings owned by VA?
Response: VA leased a total of 1,629 buildings and owned an
additional 5,541 buildings at the end of FY 2010.
Question 25: What plan is in place to speed up final disposition
for the underutilized facilities?
Response: Each year, VA identifies candidates for reuse or disposal
through the Building Utilization Reuse and Review (BURR) process. The
BURR process seeks to reuse underutilized assets where feasible,
resulting in a quicker disposition as compared to demolition. In
addition, VA has included excess space in the calculation of space gaps
in Strategic Capital Investment Planning (SCIP), ensuring underutilized
space is properly planned for. This means that facilities must either
reuse excess space or have a disposal plan in place, before claiming an
additional space need, creating a strong incentive to accelerate reuse
and disposal planning. VA has also emphasized both reuse and disposal
opportunities in its Real Property Cost Savings and Innovation Plan. In
this plan, VA has identified 131 vacant or underutilized buildings to
repurpose for homeless housing, 17 buildings to repurpose for other
Enhanced-Use Lease initiatives, and 128 vacant or underutilized
buildings to demolish or mothball.
Question 26: Do the targeted energy efficiency and cost savings of
30 percent higher than current building standards create higher costs
or slower contracting and construction than could otherwise be
achieved? What are the targeted energy efficiency and cost savings at
other large agencies?
Response: As stated in the Energy Policy Act of 2005, all Federal
agencies are mandated to achieve the 30 percent target under the Energy
Independence and Security Act (EISA). VA budgets an incremental three
to 5 percent of total project costs to achieve this target. No delays
in contracting or construction are associated with meeting this target.
Question 27: The VA's Facility Condition Assessment (FCA) report
compares the correction cost of buildings in poor or critical condition
compared to the total replacement cost of the building. Is there a
ratio of those two numbers that definitively decides whether VA will
move toward one action or the other, and if so what is that ratio? If
there is not a definitive ratio in the FCA report, what are other
factors that dictate whether to correct versus replace a facility?
Response: There is no definitive threshold. The final decision
between repair and replacement will depend on local conditions,
including historic status of the building and the nature of facility
space need. However, in general, SCIP Space Analysis recommends
disposal of buildings in which the correction cost of FCA deficiencies
is greater than 50 percent of the replacement value of the building.
Question 28: In a report recently submitted to the Committee by the
Secretary outlining construction and design contracts not awarded by
the end of the last fiscal year, the replacement medical center
facility in Denver, Colorado, was referenced. Funds have been
appropriated for this project since Fiscal Year 2004, and yet the Phase
I demolition was not awarded until April 2009. The report tells the
Committee that the ``project went from a replacement medical center to
a super clinic, then back to a replacement medical center on a smaller
(emphasis added) scale than the original project.'' Can you explain to
this committee how the planning started with one size, got
significantly bigger, then significantly smaller?
Response: Chronology of Events--Planning Studies and Key Decisions
Regarding the Denver VA Medical Center
In 2000-2003, discussions about options for the Denver
VAMC began between the Network 19 Director and CEO of the University of
Colorado Hospital (UCH). The University of Colorado Health Sciences
Center and the University of Colorado Hospital had secured access to
the former Fitzsimons Army Medical Center campus through the City of
Aurora Redevelopment Authority who took over the campus through the
BRAC process. The University announced their long-range plan to
completely relocate the Health Sciences Center and the University
Hospital to the Fitzsimons campus. During this time frame, several
feasibility studies were done to explore a potential partnership
between VA and the University of Colorado at the Fitzsimons campus. The
general consensus was to proceed in further evaluating options for the
Denver VAMC and a possible joint venture with the University of
Colorado Hospital (UCH).
In May 2004, Secretary Principi approved a recommendation
to replace the 55-year-old Clermont Street hospital. The Secretary's
CARES decision from May 2004 was that the VA ``will build a replacement
VA medical center through a sharing agreement with DoD on the
Fitzsimmons campus with some shared facilities with the University of
Colorado.''
In 2005-2007, Secretary Nicholson furthered the
development of the actual location site of the replacement hospital on
the Fitzsimons campus and secured congressional delegation
authorizations and appropriations.
In January 2008, Secretary Peake was briefed on the
status of the new replacement hospital which was a modern, state-of-
the-art, regional medical center--with a pricetag of more than $1.1
billion. Concern was raised that building a hospital of such size would
not properly serve Veterans outside of the greater Denver area.
In April 2008, a new plan was developed to build a new
Ambulatory Care Center that would have the same number of outpatient
clinics as the existing hospital, and was to have a suite for same-day
surgeries. The one important difference between the old plan and the
new one: instead of VA building its own ``bed tower'' to house patients
who remain in the hospital overnight, we would lease hospital floors
from the University of Colorado Hospital. Special areas were to be set
aside for a 22-bed nursing home care unit: and Rocky Mountain area
Veterans with spinal cord injuries would get a new 12-bed Spinal Cord
Injury unit. We were to build two new Ambulatory Centers: one in
Colorado Springs and another in Billings and would provide expanded
services at existing clinics in Grand Junction, Helena and Cheyenne,
and expand home care services and telehealth programs. External
stakeholders, however, did not embrace the concept of a ``hospital
within a hospital'' and the concept encountered considerable opposition
from external stakeholders and the Colorado congressional delegation.
In 2009, Secretary Shinseki made the decision to proceed
with the construction of a stand alone VA Medical Center in Denver,
Colorado and supported other aspects of the VISN 19 Expansion of
Services Plan as a strong model of care that will address the
challenges of providing quality health care in an accessible and
integrated manner. This plan will result in the addition of two Health
Care centers--one in Colorado Springs, Colorado and one in Billings,
Montana and the addition of ten new sites of care through Rural Health
initiatives. The design of this plan is in full alignment with national
VA strategic imperatives and will increase access and provision of
inpatient and outpatient services for Veterans in their local
community.
In 2010-2011, plans have progressed with the construction
of the new stand alone hospital in concert with Secretary Shinseki's
vision.
Question 29: Another contract that was not awarded in the expected
time pertains to the replacement medical center in New Orleans. The
city of New Orleans and the State of Louisiana were expected to
transfer the remaining property to VA by early March 2011. Did this
transfer happen?
Response: VA acquired all of the land necessary to construct the
replacement VA medical center (VAMC) in late April 2011, with the
exception of one parcel (the Dixie Brewery) to be used for research
space. VA began site preparation work, awarded the first construction
change order for Site Surcharging (site dewatering), and began
construction in May 2011. Activation of the facility is expected to
commence by December 2014.
Question 29(a): Does the transfer mentioned in the report relate to
privately-owned property that officials have taken over using eminent
domain? How many residents have been displaced because of this project?
Response: VA is not privy to the exact number of residents that
have been displaced via either the State of Louisiana using its power
of eminent domain or for other reasons. The State acquired and
assembled all 194 parcels for the new VAMC, then deeded the property to
VA. Before the State acquired the property, there were approximately
208 people living on 63 of the 194 parcels. The State, using its power
of eminent domain has acquired 102 parcels (53 residential parcels, 30
commercial parcels, and 19 vacant parcels), while the remaining parcels
were acquired through agreed purchase price transactions with the
landowners.
Question 30: Please provide a status update on all 10 of the
projects listed in that report.
Response: The ten projects are listed below.
DESIGN
1. Louisville, KY--New Medical Facility
Status: Funds for this project were appropriated in fiscal year
(FY) 2009. Design cannot be awarded until a final decision can be made
on project scope and location. A feasibility study, which highlighted
pros and cons associated with site alternatives, and a market survey,
which determined potential availability of alternative sites, were
completed in FY 2010, but real estate due diligence studies must be
completed to facilitate a final programmatic decision. These due
diligence studies are currently underway and should be completed in
July 2011 to facilitate a September 2011 decision. Negotiations for
master planning and design cannot be completed until a site has been
selected and if necessary, a site procurement schedule established.
Until that occurs, the balance of the design and construction schedule
cannot be determined.
2. West Los Angeles, CA--Seismic Corrections of Several Buildings
Status: Funds were appropriated in FY 2009. Contract award for
construction documents (CDs) for the various buildings is still
anticipated in September 2011. Building 209 is on a separate
accelerated schedule aimed at completing the building for homeless
Veterans by September 2012. Additional construction funding will be
requested in a future budget submission.
3. Brockton, MA--Spinal Cord Injury Center (SCI)/Mental Health
Renovation
Status: Funds were appropriated in FY 2010. The audit by the
Defense Contract Audit Agency (DCAA) took considerably longer than
expected. A contract was awarded in August 2010 to develop conceptual
and schematic designs. A CD award is expected to occur no earlier than
late fall 2011. Construction funding will be requested in a future
budget submission.
4. Bronx, NY--Spinal Cord Injury/Disorder (SCI/D) Center
Status: Funds were appropriated in FY 2009. The audit by DCAA took
considerably longer than expected. A contract was awarded in September
2010 to develop conceptual and schematic designs (SDs) for both the
parking garage and SCI phases of construction. A kick-off meeting was
held in October 2010 for these design phases. The CD contract is
anticipated to be awarded no earlier than late summer 2011.
Construction funding will be requested in a future budget submission.
5. Canandaigua, NY--CARES New Construction and Renovation
Status: Funds were appropriated in FY 2010. The magnitude and
complexity of the project led to a number of changes, and the audit by
the DCAA took more than 8 months to complete. A contract was awarded in
September 2010 to develop conceptual and SDs for the new community
living center, domiciliary, clinic, and other planned renovations to
the existing facility. A CD award is expected to occur in May 2012.
Construction funding will be requested in a future budget submission.
6. Livermore, CA--Livermore Realignment
Status: Funds were appropriated in FY 2010. Site selection and
procurement is ongoing with an anticipated acquisition date in June
2011. VA awarded a contract for SD and design development (DD) with
options for construction documents and construction period services in
June 2010. VA anticipates the option for DDs to be exercised in
November 2011. Completion of new construction will provide swing space
allowing renovation of specialty clinics in Palo Alto.
7. Long Beach, CA--Seismic Corrections, Mental Health and Community
Living Center (CLC)
Status: Funds were appropriated in FY 2010. Separating the mental
health inpatient and outpatient services into two independent
facilities, major revisions to the CLC space program, additions of a
parking structure and co-generation plant, and designing the CLC to new
planning standards have delayed CD award to late summer 2011.
Construction funding will be requested in a future budget submission.
8. Perry Point, MD--Replacement CLC
Status: Funds were appropriated in FY 2010. A delay was experienced
in the architect-engineer selection process and several modifications
were made to the project plan. SD and DD contract negotiations are
underway with a contract award scheduled for the third quarter of FY
2011. Construction funding will be requested in a future budget
submission.
9. St. Louis, MO--John Cochran Division--New Bed Tower
Status: Funds were appropriated in FY 2010. The authorization for
land acquisition was received in April 2010, and the efforts to acquire
land on the north and south sides of the existing hospital are not
expected to be finalized until 2012. The architect engineer contract
award is scheduled for June 2011. Award planned for evaluation of two
additional layouts for master plan with SDs, DDs, CDs, and construction
period services (CPS) as option items to be exercised at a later date.
The outcome of the land acquisition will play a dominant role in the
overall direction of the project as well as the project phasing and
schedule. Construction funding will be requested in a future budget
submission.
10. San Diego, CA--Seismic Deficiency, SCI and CLC
Status: Funds were appropriated in FY 2010. A contract for
schematic design and design development was executed in September 2009.
Design revisions include co-locating the SCI patients and CLC residents
into one facility increasing the number of SCI inpatient beds,
increasing the size of the parking structure, and designing the CLC to
the new planning standards. The revisions have delayed CD award to late
summer 2011.
Question 31: What is the review process when revising a
construction project, such as a change in the square footage of the
facility?
Response: The current process for construction scope changes
includes a review of all increases and decreases to a project's scope
along with the associated costs and schedule impacts. These recommended
changes are reviewed internally through the Veterans Health
Administration's Capital Asset Board, and then a recommendation is sent
to VHA leadership for concurrence. If the change is recommended for
approval and triggers congressional notification, the notification will
occur prior to implementation of the change. Many times these changes
arise during the early phases of design. Most medical projects
initially receive design funding, and then construction funding is
requested in a subsequent fiscal year. Changes are communicated in the
budget prospectus when requesting the construction funding.
Question 32: How and by whom are cost analyses conducted and
reviewed by the Department when examining facility construction
options? What are the contents of these analyses?
Response: VA staff use several methods to conduct cost analyses and
they are reviewed by various VA staff throughout the development of a
project. At a project's inception, facility staff may conduct market
surveys to analyze the cost of new construction, lease, and renovation
options. Next, projects are submitted through the SCIP process, via the
business case application, for inclusion in the annual budget request
and a cost-effectiveness analysis (CEA) template is required. The CEA
is a tool used to analyze the cost of the status quo and viable
options. The SCIP process is completed approximately 12 months prior to
funds being appropriated for a capital project and possibly several
years before a contract is awarded. As a project progresses to the
contract award stage further cost analysis is conducted.
Cost is one element in deciding between capital options. VA staff
at the facilities in need conduct the first cost analyses and
associated assessments when considering whether a VA structure should
be leased, renovated, or built new. The first step in deciding which
capital solution should be chosen is to establish the type and level of
the health care services needed and their appropriate location(s). VA's
Health Care Planning Model provides data on the projected Veteran
population, demographics, utilization, and access that assist in this
determination.
The second step is to determine the best solution to meet the need
(including SCIP identified infrastructure gaps) to provide that care--
with a new facility, leased facility, renovated facility, or contract
care where appropriate. All capital (major, minor, non-recurring
maintenance and leases) business case applications are reviewed and
prioritized by a Department-wide SCIP Board and approved through the VA
governance process.
VA staff (in most cases located at the facility), conduct the first
cost analysis and associated assessments when considering whether a VA
structure should be leased, renovated, or built new. The preparer of
the business case application proposes the alternative (build new,
renovate, lease, etc.) that will be used to meet identified gaps. They
must also provide additional justification if the most cost effective
means is the not chosen option. Factors, such as the need for
additional space, the ability to build on medical center campuses or
renovate existing buildings, the requirement for quick implementation
or flexibility to terminate a contract (leasing versus construction),
and duration (short-term vs. long term) of the need, all go into
determining the best solution for providing the best quality health
care. For example, a medical center campus that is landlocked, with no
excess space would need to pursue leasing or contracting out because
building on campus or renovating existing space to provide additional
care is not feasible. A campus with excess building space or acreage
could more easily renovate space or build new space on the campus.
The majority of VA projects are awarded on a firm fixed price basis
as a result of full and open competition. As such, a cost analysis is
not required for most of our projects as adequate competition
determines price reasonableness. In those relatively few cases where a
cost analysis is required, however, VA would request that the Defense
Contract Audit Agency (DCAA) conduct an audit of the firm's proposal.
DCAA has an agreement with VA to do this work on a reimbursable basis.
The DCAA audit lends support to the Contracting Officer in determining
that a price is fair and reasonable. In addition, we review historical
data as a preferred method of conducting our cost analysis along with
the support of the Architect-Engineer of record's independent
government estimate (IGE). All VA projects have an IGE, which is used
to compare cost proposals for determining cost/price to be fair and
reasonable.
Question 33: Has VA ever considered using an independent review
process to make an unbiased decision given all possible alternatives
related to VA facilities? If so, why has this process not been adopted
yet?
Response: VA's capital investment processes have in the past been
reviewed by outside parties, including the General Accounting Office
(GAO), and VA has been regarded as one of the leaders of these
processes in the Federal Government. The Department of Defense's Health
Affairs Capital Investment Planning process is in part modeled after
VA's process. We would welcome a review by GAO and other independent
parties and would embrace any recommendations on how to improve our
SCIP process. VA is responsible and accountable for making decisions
related to the delivery of health care and benefits services to
Veterans. This includes deciding the best means or facility type
(construction, lease, etc.) to provide the services. VA's current
process ensures projects, along with their possible alternatives, are
reviewed and approved at the facility level, and the VISN level prior
to being submitted to a Department-wide Panel and Board who evaluate
the projects against a standardized set of weighted decision criteria.
That evaluation results in a prioritized listing of capital projects
used to develop the annual budget request, which is reviewed and
approved by the Secretary. Half of the 18 decision criteria are
directly related to how much of a service gap a project will fill. The
gap data on access, utilization, facility condition, energy gaps,
space, etc. that is provided to project developers to guide their
decisions on possible alternatives, is used to justify the need for a
capital project and is unalterable. In addition, the decision on which
type of capital to request to fulfill a need is based on several other
factors, such as the ability to build new space or renovate existing
space on campus, or the need for the flexibility to terminate a lease
contract on short notice, or the availability of private sources to
provide services.
Question 34: What are VA's plans to reduce the $9.4 billion backlog
in repairs?
Response: Repair projects are prioritized along with other capital
investments. Most are funded by the VHA medical facilities account--
non-recurring maintenance (NRM) program. In addition, new major and
minor construction projects may also include components that address
facility repair needs.
VA has invested a significant amount in recent years to repair
existing facilities and building systems. From fiscal years (FY) 2009
through 2011, NRM funding has totaled $4.6 billion. NRM funding for the
last 3 years includes:
FY 2009 (Actual)--$1.6 billion
FY 2010 (Actual)--$1.9 billion
FY 2011 (Estimate)--$1.1 billion
VA will continue to invest in meeting facility condition deficiency
needs, especially those that have a direct impact on patient safety.
The SCIP plan provides (for the first time) a 10-year plan (including
specific projects and out-year requirements) to close the 95 percent
backlog in facility condition deficiency-related projects.
Question 35: The Capital Asset Realignment for Enhanced Services
(CARES) process identified a gap in inpatient care in Far South TX.
However, the CARES Commission did not recommend constructing a small VA
hospital in this region because: a single location would not
accommodate the dispersed veteran population; the low volume need could
not support a full range of specialty care; and veterans would still be
required to travel to the San Antonio Veterans Affairs Medical Center
for specialty care. CARES did recommended constructing a large
specialized outpatient health care center (HCC) in collaboration with
the University of Texas Regional Academic Health Center and
establishing contracts with the large well-regarded multi-specialty
private hospitals for inpatient care in the region. In January of this
year, VA opened a new Health Care Center (HCC) at Harlingen, TX.
However, some stakeholders remain concerned that an inpatient VA
medical center in Far South Texas is essential. Did the Strategic
Capital Investment Planning (SCIP) process evaluate the need for an
inpatient VA hospital in Far South Texas? If so, please provide details
as to the outcome of the SCIP evaluation. Additionally, please provide
VA's views on the sufficiency of the existing infrastructure and
services in Far South Texas to meet the current and future demand for
veterans' health care and any recommendations for the need for enhanced
services.
Response: The SCIP process and Plan includes evaluating the need
for inpatient services at all Veteran Integrated Service Networks
(VISNs) and meeting them within the SCIP 10-year time frame. The
projected inpatient beds for Far South TX continue to support the
current process of contracting inpatient care to the community; this is
the most cost effective and advantageous to the government. Therefore,
a new inpatient hospital in Far South Texas is not needed. To construct
a hospital, the inpatient demand would need to increase significantly
to ensure the safety of our patients through maintaining competency
levels of staff, and to attract high quality providers in a
competitive, professional environment.
The new Harlingen clinic was sized and subsequently constructed
based on the projected workload, so sizing and infrastructure
deficiencies should be minimal for several years. The new addition to
the clinic enhanced the existing services of Primary Care, Audiology,
Dental, Dermatology, Physical Therapy, Orthotics, Podiatry, Mental
Health (PTSD), Diabetic Retinal Imaging, Radiology and CT Scans,
Pulmonary, Ophthalmology, and Spinal Cord Injury Primary Care. The
addition created space for Ambulatory Surgery, Cardiology, Pulmonology
and Addiction Therapy. Other services are either contracted with the
University of Texas or offered at the San Antonio VA Medical Center.
Committee on Veterans' Affairs
Washington, DC.
May 6, 2011
The Honorable Eric K. Shinseki
The Secretary
U.S. Department of Veterans Affairs
Washington, DC 20420
Dear Secretary Shinseki:
In reference to our Full Committee hearing entitled
``Deconstructing the Department of Veterans Affairs Construction
Planning,'' that took place on April 5, 2011, I would appreciate it if
you could answer the enclosed hearing questions by the close of
business on May 27, 2011.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all full Member
and Subcommittee hearings. Therefore, it would be appreciated if you
could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your response to
Debbie Smith by fax at 202-225-2034. If you have any questions, please
call 202-225-9756.
Sincerely,
BOB FILNER
Ranking Democratic Member
CW:ds
__________
The Honorable Bob Filner, Ranking Member, House Committee on Veterans'
Affairs
``Deconstructing the Department of Veterans Affairs Construction
Planning''
April 5, 2011
Question 1: To what extent does SCIP define VA's overarching,
national strategy for its capital investments?
Response: The Strategic Capital Investment Planning's (SCIP)
approach to capital programs reflects VA priorities and good
stewardship of resources to maximize benefits and services to Veterans.
SCIP demonstrates effectiveness and accountability by developing a
comprehensive review of requirements and prioritizing consolidated
construction needs across all VA organizations. VA's capital program is
driven by the strategic direction embodied in SCIP--to close
performance gaps and provide sufficient capital to ensure Veterans
receive the best service in facilities that are:
Safe and secure;
Located closer to where Veterans live;
Modern and state-of-the-art;
Capable of supporting the demand for services and
benefits; and
Able to serve homeless Veterans through use of vacant
facilities.
Question 2: When did VA complete its most recent gap analysis,
including facility condition assessments, of its capital investment and
what were the results?
Response: VA completes annual gap analyses for the SCIP process.
The analysis for FY 2012 was completed in January 2010. Each gap area
represented in SCIP, such as space or condition, has an analysis
performed in support of the annual process. For example, condition
assessments are completed throughout the year and summarized in the
annual gap analysis. Other gap areas, such as space and energy, are
tracked throughout the year and the final end of year numbers are used
to perform the gap analysis. The results of the analysis performed for
the SCIP process are represented in VA's FY 2012 budget for each gap
area, by Administration (Veterans Health Administration, Veterans
Benefits Administration, National Cemetery Administration). The SCIP
plan and other VA Budget documents can be found on the Department's Web
site at http://www.va.gov/budget/products.asp
Question 3: To what extent does SCIP define the gaps in meeting its
capital investment needs?
Response: The SCIP process is gap-driven, such that all capital
investments are scored and prioritized based on the type and
criticality of the gaps closed. The outputs of SCIP are projects that
address the most critical gaps first, with additional projects in out-
years to address the remaining gaps. SCIP includes gap areas that
affect the needs for capital investment, including but not limited to,
safety, security, space, condition, energy efficiency, IT-related
infrastructure, workload, access, and functional gap areas. Although it
is possible there may be a capital need that addresses a gap not
included in SCIP, VA believes it has captured the majority of key
drivers for capital investment as part of the gap analysis process. Any
additional needs identified may be merged into the SCIP process as it
continues to mature.
Question 4: What are VA's plans to reduce the $9.4 billion backlog
in repairs?
Response: Repair projects are prioritized along with other capital
investments. Most are funded by VHA's medical facilities account--non-
recurring maintenance (NRM) program. In addition, new major and minor
construction projects may also include components that address facility
repair needs.
VA has invested a significant amount in recent years to repair
existing facilities and building systems. From fiscal years (FY) 2009
through 2011, NRM funding has totaled $4.6 billion. NRM funding for the
last 3 years includes:
FY 2009 (Actual)--$1.6 billion
FY 2010 (Actual)--$1.9 billion
FY 2011 (Estimate)--$1.1 billion
VA will continue to invest in meeting facility condition deficiency
needs, especially those that have a direct impact on patient safety.
The SCIP plan provides (for the first time) a 10-year plan (including
specific projects and out-year requirements) to close the 95 percent
backlog in facility condition deficiency-related projects.
Question 5: What is VA doing to address challenges in managing its
real property, such as improving its project cost estimates?
Response: The SCIP plan states that action plans will contain
magnitude cost estimates based on a ``snapshot'' in time. Project costs
are refined and improved as the project moves along in the budget
process--beginning with the magnitude cost found in the action plan,
refined at the business case submission, and later through the detailed
OMB 300 business case. The estimated costs are improved and provided in
the project prospectus in the budget submission and may be updated
again at completion of project design. VA is also working to develop a
methodology for including activation (project estimated start-up cost)
in future SCIP plans beginning with the SCIP 2013 submission.
Question 6: How long does VA estimate it will take to complete the
major and minor construction projects that are ongoing?
Response: There are currently 23 partially funded major
construction projects that total approximately $6 billion with
remaining need. In order to maximize resources, VA requests funds for
phased major projects based on the project's schedule and its ability
to obligate in the request year. The level of major construction
funding provided will have a critical and direct impact on the time it
takes to complete all ongoing projects. VA anticipates a large majority
of partially funded minor construction projects will be obligated by
the end of FY 2012.
Question 7: What is the percent weighting factor for reducing
excess property that VA used to evaluate projects?
Response: Capital projects were evaluated on 18 distinct sub-
criteria for the FY 2012 SCIP process, several of which apply to a
project that reduces excess property. Two sub-criteria focus
specifically on reducing excess property, Space--Repurposing and
Space--Demolition, each of which are valued at a maximum of 1.2 percent
of the project score. Repurposing and Demolition sub-criteria are part
of the Right-Sizing Inventory major criterion that is ranked fifth out
of the six major criteria. Another component of the project score is
the rating factor applied to each sub-criterion. The factor applied to
both the Repurposing and Demolition sub-criteria is the percentage of
the gap filled. Not all projects will earn a rating of 1 (the highest
possible rating) for these sub-criteria.
A project that reduces excess space can earn points for various
other sub-criteria. For example, a project that reduces excess property
could also receive points for any combination of the following sub-
criteria: Safety/Compliance (10.9 percent); Seismic (11.4 percent);
Supporting Initiatives (3.3 percent); Energy Standards (3.9 percent);
Best Value Solutions (3.6 percent); and Maximize Efficiencies (1.2
percent). Percentage values represent the maximum point value.
Question 8: GAO's recent report on VA real property did not assess
the extent to which the results of SCIP are reflected in the
President's fiscal year 2012 budget. How does SCIP respond to GAO's
recommendation to provide the results of your capital planning efforts,
including details on the estimated cost of all future projects, to
Congress on a yearly basis?
Response: The SCIP plan lists the projects to be addressed in FY
2012. It also details the projects (including location, description,
and estimated cost) and other investment levels needed to meet gaps for
fiscal years 2013-2021. Specific projects and associated estimated
costs can be found in volumes 4 and 5 of the Department's FY 2012
budget submission (http://www.va.gov/budget/products.asp).
Question 9: How will VA measure the effectiveness of SCIP, and how
will VA inform Congress of its effectiveness?
Response: The SCIP process determines the investments needed to
address gaps in space, access, safety, facility condition,
efficiencies, and utilization. SCIP does not guarantee that VA will
receive all the funding needed to close these gaps. Therefore, the
current metrics used to measure effectiveness are primarily process-
focused. For example, a key measure was the prioritized list of
projects and 10-year SCIP plan delivered on-time along with the
Department's budget. Other measures that are tracked include the number
of VA staff who are trained on important SCIP elements and
requirements, and the percentage of projects in budget execution that
were reviewed during the SCIP process. In the future, once projects are
funded, constructed and in use, VA will be able to measure their impact
on the various SCIP-identified gaps. Measured results will be included
in future VA budget submissions.
Committee on Veterans' Affairs
Washington, DC.
May 6, 2011
The Honorable Gene L. Dodaro
Comptroller General
U.S. General Accountability Office
441 G Street, NW
Washington, DC 20548
Dear Comptroller General:
In reference to our Full Committee hearing entitled
``Deconstructing the Department of Veterans Affairs Construction
Planning,'' that took place on April 5, 2011, I would appreciate it if
you could answer the enclosed hearing questions by the close of
business on May 27, 2011.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all full Member
and Subcommittee hearings. Therefore, it would be appreciated if you
could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your response to
Debbie Smith by fax at 202-225-2034. If you have any questions, please
call 202-225-9756.
Sincerely,
BOB FILNER
Ranking Democratic Member
CW:ds
__________
U.S. Government Accountability Office
Washington, DC.
May 26, 2011
The Honorable Bob Filner
Ranking Member
Committee on Veterans' Affairs
House of Representatives
Subject: Responses to Post Hearing Questions for the Record; Committee
on Veterans' Affairs, April 5, 2011, Hearing on ``Deconstructing the
Department of Veterans Affairs Construction Planning''
Dear Mr. Filner:
This letter responds to your May 6, 2011, request that we address
questions submitted for the record related to the April 5, 2011,
hearing entitled, Deconstructing the Department of Veterans Affairs
Construction Planning. Our answers to the questions are enclosed and
are based on our previous work, updates to that work, and our knowledge
of the areas addressed. Our previous work was conducted in accordance
with generally accepted government auditing standards or GAO's quality
assurance framework. Because our responses are based in large part on
previously issued products for which we sought and incorporated agency
comments, we did not seek agency comments on our responses to these
questions.
If you have any questions or would like to discuss our response,
please contact me at (202) 512-2834 or [email protected].
Sincerely yours,
Lorelei St. James
Acting Director, Physical Infrastructure Issues
Enclosure
__________
Response to Post Hearing Questions for the Record
Deconstructing the Department of Veterans Affairs
Construction Planning
April 5, 2011
Questions Submitted by the Honorable Bob Filner, Ranking Member,
Committee on Veterans' Affairs, U.S. House of Representatives
Questions for Lorelei St. James, Acting Director,
Physical Infrastructure Issues
U.S. Government Accountability Office (GAO)
Question 1: What other actions could the Department of Veterans
Affairs (VA) consider to ensure better management of its real property
portfolio?
Response: As we testified during the hearing before your committee
on April 5, 2011, GAO has been looking at this topic for decades and
has made a number of recommendations over the years.\1\ For example, in
2008, we reported that while VA had made significant progress in
reducing underutilized and vacant property, the agency does not track
how much it costs to maintain these properties or which authorities,
such as enhanced use leases, were most effective in property
reduction.\2\ As such, we recommended that VA develop an annual cost
estimate for how much it spends on underutilized and vacant property
and develop a way to track, monitor, and evaluate which authorities
were most effective at reducing it. VA concurred and has taken steps to
implement this recommendation. In an effort to review what costs can
and should be applied to supporting underutilized and vacant property,
VA told us it analyzes operational cost data to determine actual cost
to operate per square foot and has developed annual costs to maintain
vacant and underutilized properties at the individual building level.
In our 2009 report on VA construction,\3\ we recommended that VA
improve its cost risk analysis through the use of an integrated
construction schedule and a schedule risk analysis.\4\ According to VA,
this recommendation is partially implemented and will be fully
implemented in fiscal year 2011. More recently, in our 2011 report on
VA real property, we found that even though VA's capital planning
efforts led to realignment of its real property portfolio, more
transparency about the cost of future priorities could enhance
decision-making.\5\ As a result of this finding, we recommended that VA
annually provide to Congress the full results of SCIP and any other
subsequent capital planning efforts, including details on estimated
cost of future projects. In our response to question 2 of this
enclosure, we further discuss the implementation of this
recommendation. GAO publicly reports on agency progress in implementing
recommendations and will continue to monitor and follow up on the
implementation of the recommendations made to VA on these matters.
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\1\ GAO, VA Real Property: Realignment Progressing, but Greater
Transparency about Future Priorities Is Needed, GAO-11-521T
(Washington, D.C.: April 5, 2011).
\2\ GAO, Federal Real Property: Progress Made in Reducing Unneeded
Property, but VA Needs Better Information to Make Further Reductions,
GAO-08-939 (Washington, D.C.: September 10, 2008).
\3\ GAO, VA Construction: VA is Working to Improve Initial Project
Cost Estimates but Should Analyze Cost and Risk Schedules, GAO-10-189
(Washington, D.C.: December 14, 2009).
\4\ An integrated master schedule should be horizontally and
vertically linked. The schedule should be horizontally integrated,
meaning that it should link the products and outcomes associated with
already sequenced activities. The schedule should also be vertically
integrated, meaning that traceability exists among varying levels of
activities and supporting tasks and sub-tasks. A risk analysis should
include a determination of the largest risks to the project, a plan for
mitigating those risks, and an estimate of when the project will be
finished if the risks are not mitigated.
\5\ GAO, VA Real Property: Realignment Progressing, but Greater
Transparency about Future Priorities Is Needed, GAO-11-197 (Washington,
D.C.: Jan. 31, 2011).
Question 2: What actions can VA take to strengthen its Strategic
Capital Investment Planning (SCIP) or other capital investment planning
---------------------------------------------------------------------------
processes?
Response: In our 2011 report, we determined that VA could continue
to follow leading capital planning practices by ensuring that SCIP is
linked to its Strategic Plan.\6\ Further, we recommended that VA
provide the full results of its SCIP or other capital planning
processes to Congress on a yearly basis. VA concurred and recently
updated GAO on its initial efforts to implement this recommendation.
---------------------------------------------------------------------------
\6\ GAO-11-197.
---------------------------------------------------------------------------
In its fiscal year 2012 congressional budget submission, we found
that VA provided its SCIP results and its 10 year capital plan.\7\ The
10-year plan included the following details:
---------------------------------------------------------------------------
\7\ The Department of Veterans Affairs: FY 2012 Budget Submission
Construction and the 10-year Capital Plan, Volume 4 of 4 (Washington,
D.C.: February 2011).
fiscal year 2012 and potential future projects through
fiscal year 2021 with their estimated costs;
projects and cost estimates, sorted by investment type
(e.g., major construction, leases, minor construction, non-recurring
maintenance), location and prioritized rankings; and
a description of the SCIP process and methodology,
including the criteria by which projects are evaluated and prioritized.
Regarding efforts to strengthen SCIP, VA acknowledges that its
current estimates do not include activation costs. As such, VA stated
that it plans to develop a methodology to allow for the incorporation
of activation costs for future SCIP plans and we agree that this, too,
could strengthen SCIP and its results. While we reviewed VA's budget
submission, we did not validate VA's SCIP results. Further, VA's
current 10-year plan does not clarify how the agency plans to evaluate
and measure the validity of its capital planning results. Given VA's
effort to effect a large scale transformation of its real property
portfolio and the substantial capital investment these efforts will
require, we agree that capital planning is an especially important area
for VA. Further, measuring the success of VA's capital planning
efforts, such as SCIP, is critical in understanding the impact of
capital planning decisions and the extent to which real property
changes have helped improve service to veterans. Beyond these
observations, we would need to do additional work, focused on VA's
progress with SCIP, to identify additional actions that could be taken.
Question 3: Regarding real property management, what can VA do to
better close the gaps in veterans' care needs?
Response: Also in our 2011 report, we identified that VA, in an
effort to meet veterans' needs, could continue to ensure that its gap
analyses are linked to areas needed as outlined in its Strategic Plan.
For example, VA conducts gap analysis on access, utilization, space,
and condition of its real property and reports the results in its
annual budget submission.\8\ VA could also continue to explore
alternatives to dispose of excess property and better use underutilized
space, with initiatives such as enhanced use leasing,\9\ VA/DoD
collaborating & sharing,\10\ and addressing veteran homelessness.\11\
---------------------------------------------------------------------------
\8\ For its gap analysis, VA defines each type of gap as follows:
(1) Access Gap is the ability of Veterans to obtain needed services
within a defined geographical area, as defined by drive-time or
distance; (2) Utilization Gap is the difference between current
workload and projected 2018 demand for outpatient clinic stops and
inpatient bed days of care; (3) Space Gap is the difference between
current space inventory and projected 2018 space need; and (4)
Condition Gap is the cost estimate to correct all currently identified
deficiencies in buildings and infrastructure.
\9\ Enhanced-use leases are typically long-term agreements with
public and private entities for the use of VA property, resulting in
cash, in-kind consideration, or both. VA is authorized to enter into an
enhanced-use lease if it enhances the use of the property or results in
an improvement of services to veterans in the network in which the
property is located.
\10\ VA states that the fiscal year 2003 Defense Authorization Act
(Public Law 107-314, Section 721) required VA and DoD to establish a
joint incentive program to identify, evaluate and fund local, regional,
and national sharing initiatives.
\11\ VA has made an effort to repurpose unused VA properties for
the development of new housing opportunities for veterans and their
families.
Question 4: To what extent does SCIP better equip VA to address the
current backlog of maintenance, approximately $9.4 billion as reported
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in VA's 5-year capital plan for fiscal years 2010-2015?
Response: As a part of SCIP, VA centralized its prioritization of
capital projects across all of its administrations (VHA, NCA, and VBA)
and staff offices. SCIP resulted in a single, prioritized list of
projects for all of VA's major construction and minor construction,
leases, and non-recurring maintenance projects for fiscal year 2012.
Potential future projects, including non-recurring maintenance, are
also listed in the 10-year plan. While the potential project list in
the 10-year plan includes estimated costs, those projects are not
prioritized. To comment further on how SCIP could better equip VA to
address its maintenance backlog, we would need to do additional work to
more comprehensively assess the impact of SCIP, as it was relatively
new when we performed the work for our January 2011 report.
Committee on Veterans' Affairs
Washington, DC.
May 6, 2011
Raymond C. Kelley
Director, National Legislative Service
Veterans of Foreign Wars
200 Maryland Avenue, NE
Washington, DC 20002
Dear Ray:
In reference to our Full Committee hearing entitled
``Deconstructing the Department of Veterans Affairs Construction
Planning,'' that took place on April 5, 2011, I would appreciate it if
you could answer the enclosed hearing questions by the close of
business on May 27, 2011.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all full Member
and Subcommittee hearings. Therefore, it would be appreciated if you
could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your response to
Debbie Smith by fax at 202-225-2034. If you have any questions, please
call 202-225-9756.
Sincerely,
BOB FILNER
Ranking Democratic Member
CW:ds
__________
VFW response to the Honorable Bob Filner regarding questions concerning
the April 5, 2011
``Deconstructing the Department of Veterans Affairs Construction
Planning'' hearing
Question 1: Given that VFW does the construction portion of the
Independent Budget (IB), to what extent was your organization involved
in the development of the SCIP process? In other words, were you
actively involved and asked for input or were you simply given updates
through a briefing or some other form of communication once decisions
were made?
Response: No. VFW was not involved in the development of the SCIP
process. However, the process closely resembles widely accepted capital
asset management methods. The main difference between the capital plans
is how they determine the urgency of repair. Commercial capital plans
appear to base their decisions on usability while VA places more weight
on safety while scoring capital priorities. I believe that the only
place that VA could have sought input from VSOs would have been the
scoring process through the six criteria that is used to determine the
final ranking of asset gaps. Even though VSOs were not included in that
process, VFW would not have weighted the process any differently.
Question 2: The Independent Budget (IB) supports levels for minor
and major construction well above the amounts recommended by the
President's Budget. Please expand on your rationale for this
recommended increase.
Response: The Independent Budget (IB) minor construction accounts
are very comparable to those of the Administration. The main difference
in the levels can be found in the NCA construction accounts. The IB
requests funding to complete all partially funded construction projects
in FY 2012, while VA's plan takes multiple years to complete current
projects.
The defining difference between the IB recommendation and VA's
requested funding levels in Major construction is in the amount of time
that should be allowable to complete a partially funded project. VFW
and the IB believe that no major project should take more than 5 years
to fund. VA's FY 2012 plan funds most of its projects at a level that
will only pay 10 percent of the needed funding. If this level of
funding continues and VA is serious about following SCIP, they will
need to fund at a much higher level to fulfill the capital asset gaps
that have been identified.