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Senate Report 119-97 - ACQUISITION REFORM AND COST ASSESSMENT ACT OF 2025
[Senate Report 119-97]
[From the U.S. Government Publishing Office]
Calendar No. 277
119th Congress } { Report
SENATE
1st Session } { 119-97
======================================================================
ACQUISITION REFORM AND COST ASSESSMENT ACT
OF 2025
----------------
December 2, 2025.--ordered to be printed
----------------
Mr. Moran, from the Committee on Veteran's Affairs,
submitted the following
R E P O R T
[To accompany S. 1591]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to which was referred
the bill (S. 1591) to amend title 38, United States Code, to
reorganize the acquisition structure of the Department of
Veterans Affairs and to establish the Director of Cost
Assessment and Program Evaluation in the Department, and for
other purposes, having considered the same, reports favorably
thereon with an amendment in the nature of a substitute and
recommends that the bill, as amended, do pass.
Introduction
On May 5, 2025, Senator Jerry Moran from Kansas introduced
S. 1591, the Acquisition Reform and Cost Assessment Act of 2025
(ARCA Act of 2025). Senators Jim Banks from Indiana, Mark
Warner from Virginia, Angus King from Maine, and Mike Rounds
from South Dakota were later added as cosponsors to the bill.
The bill was referred to the Committee on Veterans' Affairs
(hereinafter, ``Committee'').
Committee Hearings
On May 21, 2025, the Committee held a hearing on
legislation pending before the Committee, including S. 1591.
Testimony was received from: Thomas O'Toole, MD, Acting
Assistant Under Secretary for Health for Clinical Services,
Veterans Health Administration, U.S. Department of Veterans
Affairs; Morgan Brown, National Legislative Director, Paralyzed
Veterans of America; Brian Dempsey, Director, Government
Affairs, Wounded Warrior Project; and Jon Retzer, Deputy
National Legislative Director for Health, Disabled American
Veterans.
Committee Meeting
After reviewing the testimony from the foregoing hearing,
the Committee met in open session on July 30, 2025, to consider
the Committee Print to S. 1591. The Committee, by voice vote,
voted to favorably report S.1591, as amended, en bloc with
other measures, to the Senate.
Summary of the Committee Bill as Reported
S. 1591, as reported (hereinafter, ``the Committee bill''),
consists of eleven sections, summarized below.
Section 1 provides the short title, the Acquisition Reform
and Cost Assessment Act of 2025 (ARCA Act of 2025), and a table
of contents.
Section 2 would amend title 38, United States Code, by
adding Subchapter VII to Chapter 81, defining ``major
acquisition program'' as one with a life-cycle cost exceeding
$1,000,000,000 or annual cost exceeding $200,000,000 (adjusted
per section 1908 of title 41). It would also increase the
number of Assistant Secretaries authorized at the Department of
Veterans Affairs (VA) from seven to eight, designating one as
the Assistant Secretary for Acquisition to serve as the Chief
Acquisition Officer and lead the Office of Acquisition. It
would also establish Deputy Assistant Secretaries for
Logistics, Procurement, and Acquisition, Program Management,
and Performance, and appoint at least four Program Executive
Officers for medical, IT, professional services, and other
areas.
Section 3 would require Program Executive Officers to
appoint managers for major acquisition programs within 30 days
of approval, with level-three project management certification,
to develop program baselines, ensure compliance, and manage
risks, reporting through the Assistant Secretary for
Acquisition.
Section 4 would mandate organizational consolidation of
acquisition, procurement, and logistics activities under the
Assistant Secretary for Acquisition within one year, with a
plan and briefing to Congress within 90 days.
Section 5 would require VA to contract for Independent
Verification and Validation (IV&V) of major acquisition
programs within 120 days, with strict eligibility criteria
(i.e., three prime contracts from governmental or commercial
health care organizations, satisfactory past performance, no
conflict of interest) and proportional funding from VA
subdivisions.
Section 6 would establish the Director of Cost Assessment
and Program Evaluation to develop cost estimation policies,
conduct independent cost estimates, evaluate program
effectiveness, and submit annual reports to Congress.
Section 7 would prioritize acquisition internship programs
for entry-level hiring, requiring the number of participants to
not be fewer than twice the number of participants during
fiscal year 2025 and not more than four times the number of
participants during such fiscal year until human capital needs
are met.
Section 8 would require a systems engineering analysis of
VA's acquisition process by the Acquisition Innovation Research
Center, chartered by the Department of Defense, with a report
to Congress within one year.
Section 9 would establish a standardized requirements
development process for VA major acquisition programs,
incorporating data-driven assessments and stakeholder input,
with a report to Congress within 180 days.
Section 10 would make conforming amendments, striking
section 8171(5) and (6) and section 8172 of title 38 USC.
Section 11 would update the table of sections in title 38
USC to reflect the new subchapter, titled ``Acquisition
Organization, Cost Assessment, and Program Evaluation.''
Background and Discussion
Sec. 2. Department of Veterans Affairs Acquisition Organization
This section would improve oversight of VA's key
acquisition programs, which provide essential services and
technology for veterans. It would redefine ``major acquisition
program'' as those with life-cycle costs over $1 billion or
annual costs above $200 million, addressing issues like cost
overruns and delays in high-cost initiatives. It would further
establish a central Office of Acquisition under an Assistant
Secretary, including Program Executive Officers and Deputy
Assistant Secretaries, for better coordination and require
independent analysis and requirements development. These
changes would improve efficiency and accountability, supporting
VA's current reforms.
Background
VA manages significant acquisition programs to procure
services, supplies, technology, and systems critical to
delivering timely and high-quality care, benefits, and services
to eligible veterans and other beneficiaries. The Committee
bill would redefine ``major acquisition program'' to focus
oversight on high-cost initiatives (defined as those with life-
cycle costs exceeding $1,000,000,000 or annual costs exceeding
$200,000,000), addressing concerns about cost overruns and
delays in programs like the Electronic Health Record
Modernization (EHRM).
Committee Bill
The Committee bill would establish the Office of
Acquisition under an Assistant Secretary, with Program
Executive Officers and Deputy Assistant Secretaries to
centralize oversight. It would further add provisions for
independent analysis and requirements development to enhance
efficiency and accountability, complementing VA's ongoing
acquisition reforms.
Section 3: Department of Veterans Affairs Major Acquisition Program
Managers
Major VA programs have faced delays and failures due to
weak early oversight and leadership. GAO reviewed VA's major
acquisition programs and found that nearly all (approximately
90 percent) did not use the department's official Acquisition
Program Management Framework (in place since 2017), which is
designed to enforce early oversight, including setting
baselines for costs, schedules, and performance. Instead, these
programs relied on ad-hoc, program-specific approaches that
``vary widely in robustness.''\1\ This section would require VA
to appoint level-three certified project managers for all major
programs under the Assistant Secretary for Acquisition. These
managers will set firm baselines for costs and schedules,
ensure compliance, and manage risks, helping to avoid past
problems.
---------------------------------------------------------------------------
\1\U.S. Government Accountability Office, GAO-22-105195, VA
Acquisition Management: Action Needed to Ensure Success of New
Oversight Framework (August 2022).
---------------------------------------------------------------------------
Background
VA's Electronic Health Record Modernization (EHRM) program,
launched in 2018, ballooned from $10 billion to over $16
billion with repeated delays and site failures by 2023,
exposing chronic gaps in early program oversight and
unqualified leadership.\2\
---------------------------------------------------------------------------
\2\U.S. Government Accountability Office, GAO-25-108091, Electronic
Health Record Modernization: VA Is Making Incremental Improvements, but
Much More Remains to Be Done (February 2025).
---------------------------------------------------------------------------
Committee Bill
The Committee bill would mandate VA to appoint level-three
certified project managers to all major acquisition programs to
lock in baselines, enforce compliance, and mitigate risks under
the Assistant Secretary, directly addressing GAO findings that
70 percent of major VA acquisitions lacked disciplined
management from inception.
Section 4: Department of Veterans Affairs Acquisition and Procurement
Reorganization Matters
Background
Section 4 of the Committee bill would require unification
within one year--with a 90-day congressional plan--to eliminate
silos, streamline decision-making, and have a consolidated
model.
VA's three main administrations--the Veterans Health
Administration, the Veterans Benefits Administration, and the
National Cemetery Administration--have separate acquisition,
procurement, and logistics operations, leading to repeated
contracts, mismatched systems, and yearly waste. To address
that, the Committee bill orders full consolidation under the
Assistant Secretary for Acquisition within one year, including
a plan and briefing to Congress within 90 days. This will
reduce duplication, improve decision-making, and create a
single system for better operations, oversight, and cost
control.
Committee Bill
The Committee bill would mandate organizational
consolidation of acquisition, procurement, and logistics
activities under the Assistant Secretary for Acquisition within
one year, with a plan and briefing to Congress within 90 days.
Section 5: Independent Verification and Validation (IV&V) of Major
Acquisition Programs of Department of Veterans Affairs
VA program launches have missed early problems with
usability, causing safety issues and restarts, due to reliance
on contractor self-reports. The Committee bill would require VA
to hire IV&V contractors for major programs within 120 days. It
would further stipulate that contractors have at least three
health-sector contracts, good past performance, and no
conflicts. Costs would be shared across VA units for neutral
reviews of technical aspects like usability and integration.
Background
VA's 2020 EHRM rollout ignored early warnings of usability
flaws, leading to patient safety incidents and a 2023 program
reset. The Committee bill would require contracted IV&V within
120 days with rigorous vendor criteria (three health-sector
primes, clean past performance, no conflicts) and cost-sharing
to ensure unbiased technical scrutiny, ending reliance on self-
certified contractor reports that masked critical defects.
Committee Bill
The Committee bill would require VA to contract for IV&V of
major acquisition programs within 120 days, with strict
eligibility criteria (i.e., three prime contracts from
governmental or commercial health care organizations,
satisfactory past performance, no conflict of interest) and
proportional funding from VA subdivisions.
Section 6: Department of Veterans Affairs Cost Assessment and Program
Evaluation
VA often underestimates costs in major programs, without
independent checks, leading to funding delays. The Committee
bill would create a Director of Cost Assessment and Program
Evaluation to set cost policies, make independent estimates,
review program results, and send annual reports to Congress.
Background
VA consistently underestimated major program costs--EHRM by
60 percent, VHA facility leases by 300 percent--due to absent
independent cost modeling, triggering congressional holds on
funding.
Committee Bill
The Committee bill would establish the Director of Cost
Assessment and Program Evaluation to develop cost estimation
policies, conduct independent cost estimates, evaluate program
effectiveness, and submit annual reports to Congress, with
simplified responsibilities compared to the original bill.
Section 7: Improvement to Hiring of Entry-Level Acquisition Position in
Department of Veterans Affairs
The Department of Veterans Affairs faces persistent
challenges in maintaining a robust and experienced acquisition
workforce, a critical capability for overseeing complex
contracts and ensuring taxpayer dollars are spent effectively
on veteran services. A 2024 VA Office of the Inspector General
report highlighted severe staffing shortfalls.
Background
A 2024 VA Office of the Inspector General report revealed
the VA could not provide data on its acquisition workforce's
education levels, years of experience, retirement eligibility,
and hiring.\3\ The Committee bill would require internship
growth of two to four times the FY 2025 levels until needs are
met to rebuild a pipeline of certified professionals and ensure
institutional knowledge retention.
---------------------------------------------------------------------------
\3\U.S. Government Accountability Office, GAO-22-105031, VA
Acquisition Management: Actions Needed to Better Manage the Acquisition
Workforce (September 2022).
---------------------------------------------------------------------------
Committee Bill
The Committee bill would prioritize acquisition internship
programs for entry-level hiring, requiring the number of
participants to not be fewer than twice the number of
participants during fiscal year 2025 and not more than four
times the number of participants during such fiscal year until
human capital needs are met. By requiring participation to fall
between two and four times the fiscal year 2025 level, the bill
aims to expand the internship program at a pace that is both
impactful, while helping to resolve staffing gaps, and
manageable for the department's supervision, training, and
budget structures.
Section 8: Independent Analysis of Acquisition Process of Department of
Veterans Affairs
VA's uneven acquisition methods have caused incompatible IT
systems and extra costs, with 2023 testimony noting no standard
engineering approach. Section 8 of the Committee bill would
require the Acquisition Innovation Research Center, a DoD
group, to analyze VA processes over one year and report to
Congress. The review will suggest engineering methods to
improve workflows.
Background
VA's ad-hoc acquisition processes produced incompatible
information technology (IT) systems and redundant
infrastructure, with 2023 testimony citing ``no systems
engineering discipline.''
Committee Bill
The Committee bill would require a systems engineering
analysis of VA's acquisition process by the Acquisition
Innovation Research Center, chartered by the Department of
Defense (DoD), with a report to Congress within one year.
Section 9: Requirements Development Process
VA program costs have consistently increased because of
poorly written requirements. GAO says VA IT issues come from
poorly defined requirements. Section 9 of the Committee bill
would set a standard process for major programs using data and
input from stakeholders like clinicians and require VA to
report to Congress within 180 days to clarify needs and cut
changes.
Background
EHRM requirements were rewritten 17 times after contract
award because of the vague initial specifications, locking VA
into costly change orders. Because key functional needs,
interfaces, and performance expectations were not clearly
defined before EHRM contract award, each adjustment to the
program had to be processed as a formal change order. As a
result, these repeated rewrites increased costs, delayed the
schedule, and revealed that the program's requirements were not
properly defined. Section 9 enforces data-driven, stakeholder-
inclusive requirements within 180 days to front-load clarity,
reduce scope creep, and align acquisitions with clinical and
operational realities.\4\
---------------------------------------------------------------------------
\4\U.S. Government Accountability Office, GAO-25-106874, Electronic
Health Records: VA Is Making Incremental Improvements in New System but
Needs Updated Cost Estimate and Schedule (March 2025).
---------------------------------------------------------------------------
Committee Bill
The Committee bill establishes a standardized requirements
development process for major acquisition programs,
incorporating data-driven assessments and stakeholder input,
with a report to Congress within 180 days. This would address
GAO's findings that the VA's history of IT failures are often
tied to poorly defined or changing requirements and its
recommendation for VA to establish an enterprise requirements
management process.\5\
---------------------------------------------------------------------------
\5\U.S. Government Accountability Office, GAO-20-719T, Veterans
Affairs: VA Needs to Address Persistent IT Modernization and
Cybersecurity Challenges (September 2020).
---------------------------------------------------------------------------
Section 10: Conforming Amendments
Section 10 of the Committee bill would update laws in 38
U.S.C. Sec. Sec. 8171-8175 by removing extra definitions, like
``major information technology project'' from Sec. 8171(5)-(6),
while keeping those needed for Sec. Sec. 8173-8175. It would
further delete all of Sec. 8172 but moves its project manager
rules here. These changes ensure the bill fits with current law
without adding new rules.
Background
To harmonize the improvements needed with 38 USC 8171,
8172, 8173 the definitions for ``major information technology
project'' from 8171 and ``major acquisition program'' were
removed.
Committee Bill
The Committee bill makes conforming amendments, striking
section 8171(5) and (6) and section 8172 of title 38. Section
10 would strike paragraphs (5) and (6) in 8171 but kept the
definitions still needed for 8173, 8174, 8175. All of 8172 was
stricken but moved the project manager qualifications into this
bill.
Congressional Budget Office Cost Estimate
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 402 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
S. 1591 would make changes to acquisition and contracting
processes used by the Department of Veterans Affairs (VA).
Specifically, the bill would:
Establish a new office to evaluate the cost
of major acquisition programs;
Require several studies and reports on how
VA acquires products and services;
Reorganize VA's current acquisition
workforce; and
Establish new rules for vendors that test VA
programs, such as those dealing with information
technology.
In total, implementing S. 1591 would cost $24 million over
the 2026-2030 period, CBO estimates. Such spending would be
subject to the availability of appropriated funds.
The costs of the legislation, detailed in Table 1, fall
within budget function 700 (veterans benefits and services).
Table 1.--Estimated Increases in Spending Subject to Appropriation Under S. 1591
----------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-------------------------------------------------------
2026 2027 2028 2029 2030 2026-2030
----------------------------------------------------------------------------------------------------------------
Cost Assessment Office:
Estimated Authorization............................. 2 5 5 5 5 22
Estimated Outlays................................... 2 5 5 5 5 22
Studies and Reports:
Estimated Authorization............................. 1 1 * * * 2
Estimated Outlays................................... * 1 1 * * 2
Total Changes:
Estimated Authorization............................. 2 3 3 5 5 24
Estimated Outlays................................... 1 3 4 5 5 24
----------------------------------------------------------------------------------------------------------------
* = between zero and $500,000.
Cost assessment office. S. 1591 would establish a new
Director of Cost Assessment and Program Evaluation. The
director would lead a team responsible for estimating the cost
of new major acquisition programs and evaluating the
effectiveness of existing ones. Using information on similar
offices at other agencies, CBO estimates that VA would
eventually require 25 full-time equivalent employees to perform
the office's duties. Those employees would receive an average
annual compensation of about $200,000. As a result,
establishing the new office would cost $22 million over the
2026-2030 period, CBO estimates.
Studies and reports. The bill would require VA to contract
with the Department of Defense's Acquisition Research Center to
conduct a study of VA's acquisition processes. Using
information from VA, CBO estimates that satisfying that
requirement would cost $1 million. The bill also would require
four other studies and reports. Using information on the cost
of similar efforts, CBO estimates that satisfying those
requirements would cost $1 million. In total, the bill's study
and reporting requirements would cost $2 million over the 2026-
2030 period, CBO estimates.
Acquisition reorganization. S. 1591 would reorganize VA's
existing acquisition workforce and processes under a new
Assistant Secretary for Acquisition. VA currently employs
people who would fill positions under the reorganization and
meet the bill's requirements for acquisition processes (such as
appointing managers for major programs). Thus, CBO estimates
that any associated costs would be less than $500,000.
Program testing. The bill would direct VA to contract for
independent verification and validation (IV&V) services,
including for testing information technology systems to ensure
they function properly and meet VA's requirements. Any such
contract must ensure that the vendor has experience performing
IV&V services at other agencies and has no conflict of interest
that would prevent independent testing. VA currently contracts
for IV&V services for major acquisition programs. CBO estimates
that the cost of modifying those contracts to meet the bill's
requirements would be less than $500,000.
The CBO staff contact for this estimate is Logan Smith. The
estimate was reviewed by Christina Hawley Anthony, Deputy
Director of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
Regulatory Impact Statement
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee on Veterans'
Affairs has made an evaluation of the regulatory impact that
would be incurred in carrying out the Committee bill. The
Committee finds that the Committee bill would not entail any
regulation of individuals or businesses, result in any impact
on the personal privacy of any individuals, and that the
paperwork resulting from enactment would be minimal.
Tabulation of Votes Cast in Committee
In compliance with paragraph 7(b) of rule XXVI of the
Standing Rules of the Senate, the following is a tabulation of
votes cast by members of the Committee on Veterans' Affairs at
its July 30, 2025, meeting.
During this meeting, Chairman Moran called up 23 bills,
including S. 1591, to be considered en bloc. The bills were
reported favorably by voice vote en bloc.
Agency Report
On May 21, 2025, Thomas O'Toole, M.D., Acting Assistant
Under Secretary for Health for Clinical Services, Veterans
Health Administration, U.S. Department of Veterans Affairs,
appeared before the Committee and submitted testimony on S.
1591. An excerpt from that testimony is reprinted below:
statement of thomas o'toole, m.d., acting assistant under secretary for
health for clinical services, veterans health administration (vha),
department of veterans affairs before the senate committee on veterans'
affairs
acquisition reform and cost assessment act of 2025 (s. 1591)
This bill includes nine total sections, with section 1
providing a short title and table of contents.
Section 2(a) would add new subchapter VII, ``Acquisition
Organization, Cost Assessment, and Program Evaluation,'' to
chapter 81 of title 38, U.S.C. The new subchapter would include
section 8181, ``Definitions,'' which would add definitions for
the terms ``major acquisition program'' and ``non-major
acquisition program'' that would apply throughout the
subchapter. Section 2(b) would amend 38 U.S.C. Sec. 308 to
increase the number of Assistant Secretaries from seven to
eight, including the addition of an Assistant Secretary for
``Acquisition and innovation''.
Section 2(c) would add a new section 8182, ``Acquisition
organization,'' to title 38, U.S.C., which would direct the
Secretary to designate an Assistant Secretary for Acquisition
and Innovation, who would also be the Chief Acquisition Officer
(CAO). The Assistant Secretary would be the head of the Office
of Acquisition and Innovation, and major program offices would
align under the Office. The budget for the Office would be
established in VA's budget justification materials submitted to
Congress. The Secretary would appoint three Deputy Assistant
Secretaries (DAS), who would report to the Assistant Secretary
for Acquisition and Innovation--a DAS for Logistics, a DAS for
Innovation, and a DAS for Procurement. The DAS for Logistics
would be responsible for the administration of logistics and
supply chain operations. The DAS for Innovation would be
responsible for all research development, testing, and
innovation development organizations, including the VHA
Innovation Ecosystem. The DAS for Procurement would be
responsible for all VA procurement and contracting
organizations.
VA supports the intent of this section, subject to amendments and
the availability of appropriations
VA supports the intent of this section, subject to
amendments, because it enhances the focus on and coordination
of acquisition and innovation activities, ensuring they align
with Presidential priorities to streamline processes, improve
efficiency, and foster a more innovative approach to acquiring
and developing capabilities. This new role and organization
better support and reflect the CAO's responsibilities and the
increasing complexity of VA's acquisition needs. The CAO serves
as the primary advisor to the Secretary for all major
acquisitions, manages 17,000 acquisition professionals, and is
responsible for providing oversight of approximately $100
billion in VA's major acquisition programs. VA believes
additional amendments are needed to give effect to the intent
of this section, particularly with revising the dollar value
for major/non-major acquisition programs to align with the
definition of ``Major Information Technology Project'' in 38
U.S.C. Sec. 8171(5) (as added by the Department of Veterans
Affairs Information Technology Reform Act of 2022 (section 403
of the Joseph Maxwell Cleland and Robert Joseph Dole Memorial
Veterans Benefits and Health Care Improvement Act of 2022; P.L.
117-328, Div. U)). VA also recommends adding a DAS for
Acquisition, Program Management, and Performance, who would
report to the Assistant Secretary for Acquisition and
Innovation. This additional DAS role would focus on the
critical aspects of VA's ``Big A'' acquisitions. This role
would transcend mere procurement, placing a strong emphasis on
lifecycle management that is intricately structured around
vital elements: requirements planning, programming and
budgeting, policy innovation, performance standards,
governance, and enhancing the capabilities of the acquisition
workforce. This comprehensive approach would ensure that our
major acquisitions are both effective and forward-thinking,
paving the way for successful outcomes.
VA does not have a cost estimate for this section.
Section 3 would add a new section 8183, ``Major acquisition
program managers.'' The new section would direct the Deputy
Secretary to appoint a manager to administer a major
acquisition program not later than 30 days after the Secretary
approves commencement of the program. Each appointed manager
would report to the Assistant Secretary for Acquisition and
Innovation and be responsible for developing a ``program
baseline.'' The program baseline would include a description of
each acquisition phase; requirements for advancing the program;
and estimates for cost, schedule, and performance for the
lifecycle of the program. The manager would be responsible for
ensuring that the program is in compliance with such
requirements, securing funding, adopting standardized
processes, and ensuring personnel responsible for estimating
the budget for the program are able to raise concerns prior to
the establishment of the program baseline. The manager would be
responsible for ensuring that: the program complies with cost
accounting standards as applicable; the program has a qualified
workforce; and the program has adequate technology and
production capacity prior to commencing if the program is
related to manufacturing.
The manager would be required to submit a certification,
within 90 days of establishing the program baseline, stating
that alternative requirements were considered prior to
establishing the program baseline. The certification would be
submitted to the program decision authority (the Assistant
Secretary for Acquisition and Innovation). The Secretary would
ensure that the program management offices for the major
acquisition programs are independent of VBA, VHA, and the
National Cemetery Administration (NCA), and other staff offices
by reporting directly to the Assistant Secretary for
Acquisition and Innovation. The manager would be required to
notify the program decision authority within 30 days of the
conclusion of an acquisition phase of a major acquisition
program. The manager would not be allowed to proceed to a
subsequent acquisition phase without the authorization of the
program decision authority.
VA supports the intent of this section, subject to amendments
VA supports the intent of this section, subject to minor
amendments, as VA has taken action to establish a policy that
major acquisition programs require certified program managers
and teams appointed by the Deputy Secretary to ensure efficient
planning, execution, and oversight of VA's most complex and
high-stakes programs. VA also seeks to ensure that Assistant
Secretary for Acquisition and Innovation would align and seek
input from other senior functional areas regarding statutory
requirements for program oversight.
VA does not have a cost estimate for this section.
Section 4 would transfer all contracting officers and
acquisition centers to the Office of Acquisition and
Innovation. All activities related to the administration of
logistics and supply chain operation would be consolidated
under the DAS for Logistics.
VA supports the intent of this section
VA does not have a cost estimate for this section.
Section 5 would require the Secretary to enter into one or
more contracts for the independent verification and validation
(IV&V) of a major acquisition program or major information
technology project. To be awarded a contract, the CAO would
have to determine that the entity performs or has performed,
within a 3-year period as prime contractor, IV&V or systems
engineering and technical advisory support of major acquisition
programs or defense systems. The entity, including its
subsidiaries, subcontractors, and investments, would be
precluded from receiving an award if it was performing or had
performed within a 3-year period a covered contract for the
project or system involved or for VA. If requested by Congress,
contracting officers would be required to submit an
organizational conflict of interest mitigation plan submitted
by the entity within 30 days from the request. VA would send a
copy of the IV&V to Congress not later than 30 days after it
was performed. The Chief Financial Officer would need to
ensure, to the extent practicable, that each organizational
subdivision that enters into a contract for IV&V proportionally
contributes to the funding of each contract.
VA supports the intent of this section, subject to amendments
VA supports the intent of this section, subject to
amendments. With the exclusive mandate for IV&V by external
contractors, the Department would need to carefully review
existing IV&V and testing-related contracts for compliance
while ensuring continuity. This shift may unintentionally
exclude experienced VA contractors who lack the required DoD-
related contract experience; therefore, VA believes refining
the proposed legislative language for clarity and proactively
addressing these exclusions would be crucial to mitigating
operational disruptions. To preserve operational integrity and
effectiveness, leveraging both governmental expertise and
external contractor support in IV&V processes is vital, and
adhering to industry standards such as IEEE Std. 1012 while
maintaining flexibility in IV&V implementation will ensure
comprehensive oversight without compromising quality.
VA does not have a cost estimate for this section.
Section 6 would add a new section 8184, ``Cost assessment
and program evaluation.'' This new section would establish a
Director of Cost Assessment and Program Evaluation (CAPE) who
would report directly to the Secretary. The CAPE Director would
provide independent analysis and advice to the Secretary and
other senior VA officials on matters assigned to the Director
pursuant to this section and to 38 U.S.C. Sec. 303. Proposed
section 8184(c) would establish two Deputy Directors within the
CAPE Office, one for Cost Assessment and one for Program
Evaluation. Proposed section 8184(d) would define the
responsibilities of the CAPE Director. The Secretary would have
to ensure that the Director promptly received the results of
all cost estimates and cost analyses conducted by VBA, VHA,
NCA, or staff offices and all studies conducted by the
Administration, in connection with such cost estimates and cost
analyses for major acquisition programs and major automated
information system programs of the Administrations. The
Director also would have to have timely access to any records
and data in the Department. Proposed section 8184(h) and
section 6(b) of the bill would define VA's annual reporting
requirements. Finally, section 6(b) would define reporting
requirements on the monitoring of operating and support costs
for major acquisition programs.
VA does not support this section
While VA agrees with the intent behind establishing a CAPE
Director function to enhance oversight, VA does not support
this section. VA does not believe that establishing the
function and roles in law is necessary. VA seeks the
flexibility to develop and expand existing capabilities within
the Office of Management without the additional constraints
prescribed in this section.
VA does not have a cost estimate for this section.
Section 7 would add two new sections, 8185 and 8186, titled
``Other transaction authority'' and ``Advance market
commitments for technologies or services for provision of
health care,'' respectively. Proposed section 8185 would
establish another transaction authority (OTA) that would permit
VA to enter into transactions with non-traditional contractors
to perform certain types of research or innovation development
activities. The authority could also be exercised by the Deputy
Assistant Secretary for Innovation for activities that align
with the mission of the VHA Innovation Ecosystem, provided
certain requirements are met. The criteria include research
that is not duplicative, a determination by the senior
procurement executive that the research is appropriate, that
the transaction will not exceed $5 million to include all
options (unless a determination is made to exceed such limits),
and other details and limitations. It also would specify notice
and reporting requirements to Congress, require VA prescribe
regulations to carry out the section, and limit authority under
this section to a term of 3 years after the date of enactment.
Finally, it would define various terms.
Proposed section 8186 would grant VA authority to enter
into advance market commitments by guaranteeing VA purchase, at
a predetermined price, a technology or service provided by an
entity that addresses an unmet need in the provision of health
care to Veterans. It further would specify criteria that must
be met prior to entering into an advanced market commitment, to
include clearly defined and transparent rules, clear
definitions, defined dispute settlement mechanisms, and the
ability to modify under certain conditions. The section also
would outline a reporting requirement to notify Congress within
120 days of execution of an advanced market commitment.
VA supports the intent of this section
VA supports the intent of this section because it would
provide VA with the tools to drive rapid innovation. OTA would
minimize barriers, facilitate more streamlined bidirectional
collaborations with industry, and help VA attract new, private
sector entities that do not traditionally engage with VA.
Having OTA, including for research, prototyping, and follow-on
production, as a flexible acquisition tool would enable VA to
address its immediate challenges today and prepare us to tackle
future challenges to modernize VA rapidly in the years to come.
VA does not have a cost estimate for this section.
Section 8 would require VA to monitor the training and
experience gap of professionals and establish or expand any
existing internship or development pipelines for 1102
contracting officers at VA.
VA supports the intent of this section
VA supports the intent of this section because it
underscores VA's need to expand internship and development
pipelines for 1102 contracting officers to address training and
experience gaps. VA has initiatives underway and will continue
to prioritize improving the skills and competencies of its
acquisition workforce, thereby enhancing the Department's long-
term operational efficiency and effectiveness in managing
acquisitions.
VA does not have a cost estimate for this section.
Section 9 is a clerical amendment to amend the table of
sections to add subchapter VII and sections 8181-8186 to 38
U.S.C.
VA supports the intent of this section
VA welcomes the opportunity to work with the Committee on
technical assistance, including necessary conforming
amendments.
There is no cost associated with this section.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the Committee bill are shown as follows: (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italics, existing law in which no change is proposed
is shown in roman):
TITLE 38. VETERANS' BENEFITS
* * * * * * *
PART I. GENERAL PROVISIONS
* * * * * * *
CHAPTER 3. DEPARTMENT OF VETERANS AFFAIRS
* * * * * * *
SEC. 308. ASSISTANT SECRETARIES; DEPUTY ASSISTANT SECRETARIES
(a)(1) There shall be in the Department not more than
[seven] eight Assistant Secretaries.
(2) Except as provided in paragraph (3), each Assistant
Secretary appointed under paragraph (1) shall be appointed by
the President, by and with the advice and consent of the
Senate.
(3) The following Assistant Secretaries may be appointed
without the advice and consent of the Senate:
(A) The Assistant Secretary for Management.
(B) The Assistant Secretary for Human Resources and
Administration.
(C) The Assistant Secretary for Public and
Intergovernmental Affairs.
(D) The Assistant Secretary for Operations, Security,
and Preparedness.
(b) The Secretary shall assign to the Assistant Secretaries
responsibility for the administration of such functions and
duties as the Secretary considers appropriate, including the
following functions:
(1) Budgetary and financial functions.
(2) Personnel management and labor relations
functions.
(3) Planning, studies, and evaluations.
(4) Management, productivity, and logistic support
functions.
(5) Information management functions as required by
section 3506 of title 44.
(6) Capital facilities and real property program
functions.
(7) Equal opportunity functions.
(8) Functions regarding the investigation of
complaints of employment discrimination within the
Department.
(9) Functions regarding intergovernmental, public,
and consumer information and affairs.
(10) [Procurement functions.] Acquisition functions.
(11) Operations, preparedness, security, and law
enforcement functions.
(12) The functions set forth in section 323(c) of
this title.
* * * * * * *
PART VI. ACQUISITION AND DISPOSITION OF PROPERTY
* * * * * * *
CHAPTER 81. ACQUISITION AND OPERATION OF HOSPITAL
AND DOMICILIARY FACILITIES; PROCUREMENT AND
SUPPLY; ENHANCED-USE LEASES OF REAL PROPERTY
* * * * * * *
CHAPTER 81. DEPARTMENT OF VETERANS AFFAIRS
* * * * * * *
Subchapter VI--Information Technology Projects and
Activities
SEC. 8171. DEFINITIONS
In this subchapter:
(1) The term ``appropriate congressional committees''
means--
(A) the Committee on Veterans' Affairs and
the Committee on Appropriations of the Senate;
and
(B) the Committee on Veterans' Affairs and
the Committee on Appropriations of the House of
Representatives.
(2) The term ``information technology'' has the
meaning given that term in section 11101 of title 40.
(3)(A) The term ``information technology project''
means a project or program of the Department (including
a project or program of any element of the Department)
for, or including, the acquisition or implementation of
information technology.
(B) In cases where the Secretary transmits to the
Director of the Office of Management and Budget
information regarding information technology
investments, which may consist of individual or
multiple projects, the term ``information technology
project'' refers to an individual project or program or
a grouping of multiple projects or programs resulting
in the acquisition or implementation of discrete
information technology.
(4) The term ``life cycle costs'' means all direct
and indirect costs to acquire, implement, operate, and
maintain information technology, including with respect
to costs of any element of the Department.
[(5) The term ``major information technology
project'' means an information technology project if--]
[(A) the project is designated by the
Secretary, the Chief Information Officer of the
Department, or the Director of the Office of
Management and Budget as a major information
technology investment, as defined in section
11302 of title 40; or]
[(B) the dollar value of the project is
estimated by the Secretary to exceed--]
[(i) $1,000,000,000 (as adjusted for
inflation pursuant to section 1908 of
title 41) for the total life cycle
costs of the project; or]
[(ii) $200,000,000 (as adjusted for
inflation pursuant to section 1908 of
title 41) annually.]
[(6) The term ``business owner'' means, with respect
to an information technology project, the program
manager, project manager, or other supervisory official
of the Department responsible for the project.]
[SEC. 8172. MANAGEMENT OF MAJOR INFORMATION TECHNOLOGY PROJECTS]
[(a) Cost, Schedule, and Performance Information.--]
[(1) The Secretary shall, acting through the Chief
Information Officer of the Department, submit to the
appropriate congressional committees a report
containing information on the cost, schedule, and
performance of each major information technology
project that begins after the date of the enactment of
the Joseph Maxwell Cleland and Robert Joseph Dole
Memorial Veterans Benefits and Health Care Improvement
Act of 2022, as generated by the business owner of the
project, prior to the commencement of such project.]
[(2) Each report submitted under paragraph (1) for a
project shall include, with respect to such project,
the following:]
[(A) An estimate of acquisition costs,
implementation costs, and life cycle costs.]
[(B) An intended implementation schedule
indicating significant milestones, initial
operating capability, and full operating
capability or completion.]
[(C) Key business, functional, and
performance objectives.]
[(b) Baseline.--]
[(1) The Secretary shall use the information on the
cost, schedule, and performance of a major information
technology project included in the report under
subsection (a) as the baseline against which changes or
variances are measured during the life cycle of such
project.]
[(2) The Secretary shall--]
[(A) annually update the baseline of a major
information technology project pursuant to
subsection (c); and]
[(B) include such updated baseline in the
documents providing detailed information on the
budget for the Department that the Secretary
submits to Congress in conjunction with the
President's budget submission pursuant to
section 1105 of title 31.]
[(c) Changes and Variances.--]
[(1) Not later than 60 days after the date on which
the Secretary identifies a change or variance described
in paragraph (2) in the cost, schedule, or performance
of a major information technology project, the
Secretary, acting through the Chief Information
Officer, shall submit to the appropriate congressional
committees a notification of such change or variance,
including a description and explanation for such change
or variance.]
[(2) A change or variance in the cost, schedule, or
performance of a major information technology project
described in this paragraph is--]
[(A) with respect to the acquisition,
implementation, or life cycle cost of the
project, or development increment therein, a
change or variance that is 10 percent or
greater compared to the baseline;]
[(B) with respect to the schedule for a
development increment or for achieving a
significant milestone, initial operating
capability, or full operating capability, or
for the final completion of the project, a
change or variance that is 180 days or greater
compared to the baseline; or]
[(C) with respect to the performance, an
instance where a key business, functional, or
performance objective is not attained, or is
not anticipated to be attained, in whole or in
part.]
[(d) Management.--The Secretary shall ensure that each
major information technology project is managed by an
interdisciplinary team consisting of the following:]
[(1) A project manager who--]
[(A)(i) is certified in project management at
level three by--]
[(I) the Department;]
[(II) the Federal Acquisition
Institute pursuant to section 1201 of
title 41; or]
[(III) the Department of Defense
pursuant to section 1701a of title 10;
or]
[(ii) holds an equivalent certification by a
private sector project management certification
organization, as determined appropriate by the
Secretary; and]
[(B) is an employee of the Office of
Information and Technology of the Department or
an employee of an element of the Department at
which the project originates.]
[(2) A functional lead who is an employee of the
element of the Department at which the project
originates.]
[(3) A technical lead who is an employee of the
Office of Information and Technology of the
Department.]
[(4) A contracting officer.]
[(5) Sufficient other project management, functional,
technical, and procurement personnel as the Secretary
determines appropriate.]
* * * * * * *
Subchapter VII--Acquisition Organization, Cost Assessment, and
Program Evaluation
SEC. 8181. DEFINITION OF MAJOR ACQUISITION PROGRAM
In this subchapter, the term ``major acquisition program''
means a program of the Department to acquire services,
supplies, technology, systems, or a combination thereof, with
an estimated total program cost, estimated by the Secretary,
that exceeds--
(1) $1,000,000,000 (adjusted pursuant to section 1908
of title 41) for the total life cycle cost of the
program; or
(2) $200,000,000 (adjusted pursuant to section 1908
of title 41) annually.
SEC. 8182. ACQUISITION ORGANIZATION
(a) Assistant Secretary for Acquisition; Chief Acquisition
Officer.--(1) The Secretary shall designate one of the
Assistant Secretaries specified in subsection (a)(1) of section
308 of this title as the Assistant Secretary of Veterans
Affairs for Acquisition, who shall focus solely on the
administration of functions specified in subsection (b)(10) of
such section.
(2) Pursuant to section 1702(a) of title 41, the Secretary
shall designate the Assistant Secretary of Veterans Affairs for
Acquisition as the Chief Acquisition Officer of the Department.
(b) Office of Acquisition.--(1) There is in the Department
an Office of Acquisition.
(2) The head of the Office of Acquisition shall be the
Assistant Secretary of Veterans Affairs for Acquisition
designated pursuant to subsection (a).
(3) The Secretary shall take such actions as may be
necessary to ensure that major acquisition program offices of
the Department align under the Office of Acquisition and report
directly to the Assistant Secretary of Veterans Affairs for
Acquisition.
(4) The budget of the Office of Acquisition, including
budgets for major acquisition programs, shall be established in
the budget justification materials submitted to Congress in
support of the budget of the Department (as submitted with the
budget of the President under section 1105(a) of title 31).
(c) Deputy Assistant Secretary for Logistics.--(1) Pursuant
to section 308(d) of this title, the Secretary shall appoint a
Deputy Assistant Secretary of Veterans Affairs for Logistics,
who shall report to the Assistant Secretary for Acquisition.
(2) The Deputy Assistant Secretary of Veterans Affairs for
Logistics shall be responsible for administration of logistics
and supply chain operations of the Department.
(d) Deputy Assistant Secretary for Procurement.--(1)
Pursuant to section 308(d) of this title, the Secretary shall
appoint a Deputy Assistant Secretary of Veterans Affairs for
Procurement, who shall report to the Assistant Secretary for
Acquisition.
(2) The Deputy Assistant Secretary of Veterans Affairs for
Procurement shall be responsible for all procurement and
contracting organizations of the Department.
(e) Deputy Assistant Secretary for Acquisition, Program
Management, and Performance.--(1) Pursuant to section 308(d) of
this title, the Secretary shall appoint a Deputy Assistant
Secretary of Veterans Affairs for Acquisition, Program
Management, and Performance, who shall report to the Assistant
Secretary for Acquisition.
(2) The Deputy Assistant Secretary for Acquisition, Program
Management, and Performance shall be responsible for the
following:
(A) Lifecycle management.
(B) Requirements planning.
(C) Programming and budgeting.
(D) Policy.
(E) Performance standards.
(F) Governance.
(G) Enhancing the capabilities of the acquisition
workforce.
(f) Program Executive Officers.--
(1) The Assistant Secretary for Acquisition shall
appoint no fewer than four Program Executive Officers,
each responsible for overseeing major acquisition
programs in one of the following areas:
(A) Medical.
(B) Information technology.
(C) Professional services.
(D) Other areas not included in subparagraphs
(A) through (C).
(2) Each Program Executive Officer shall report
directly to the Assistant Secretary for Acquisition and
shall supervise the managers of major acquisition
programs within their respective area, as appointed
under section 8183 of this title.
(3) Each Program Executive Officer shall be--
(A) certified in project management at level
three by--
(i) the Department;
(ii) the Federal Acquisition
Institute pursuant to section 2101 of
title 41; or
(iii) the Department of Defense
pursuant to section 1701a of title 10;
or
(B) hold an equivalent certification by a
private sector project management certification
organization, as determined appropriate by the
Secretary.
SEC. 8183. MAJOR ACQUISITION PROGRAM MANAGERS
(a) Appointments.--Not later than 30 days after any date on
which the Secretary approves a major acquisition program to
commence, the applicable Program Executive Officer shall
appoint a manager to be responsible for administering such
program.
(b) Qualifications.--Each manager appointed pursuant to
subsection (a) shall be-- (1) certified in project management
at level three by--
(A) the Department;
(B) the Federal Acquisition Institute pursuant to
section 1201 of title 41; or
(C) the Department of Defense pursuant to section
1701a of title 10; or
(2) hold an equivalent certification by a private sector
project management certification organization, as determined
appropriate by the Secretary.
(c) Duties.--Each manager appointed pursuant to subsection
(a) for a major acquisition program shall--
(1) report to the Assistant Secretary for Acquisition
through the Program Executive Officer responsible for
the major acquisition program; and
(2) shall be responsible for, with respect to the
major acquisition program--
(A) developing, in coordination with the
Program Executive Officer, a plan to administer
major acquisition program, which shall be known
as the `program baseline' for the major
acquisition program, that includes--
(i) a description of each acquisition
phase of the major acquisition program;
(ii) for each such acquisition phase,
requirements for advancing the major
acquisition program to a subsequent
acquisition phase; and
(iii) estimates of the cost,
schedule, and performance of the major
acquisition program that account for
the entire life cycle of the major
acquisition program;
(B) ensuring the major acquisition program is
in compliance with such requirements and
providing all program documentation, including
program baseline documentation, cost, schedule,
performance and risk assessments, and other
relevant materials, to designated officials and
relevant governance boards;
(C) developing resource requests and
justifications necessary to satisfy such
requirements; and
(D) on a continuous basis, assessing and
managing risks to satisfying the requirements
of such program baseline relating to cost and
schedule.
(d) Program Decision Authority.--The Secretary shall ensure
that--
(1) program decision authority for oversight of a
major acquisition program is the Assistant Secretary
for Acquisition; and
(2) program management offices for major acquisition
programs are independent of the Veterans Benefits
Administration, the Veterans Health Administration, the
National Cemetery Administration, and staff offices of
the Department by reporting directly to the Assistant
Secretary for Acquisition.
(e) Program Decision Authority Notification Required.--Not
later than 30 days after any date on which a major acquisition
program concludes an acquisition phase, the manager of such
program appointed pursuant to subsection (a) shall notify the
program decision authority under subsection (c).
SEC. 8184. COST ASSESSMENT AND PROGRAM EVALUATION
(a) Director of Cost Assessment and Program Evaluation.--
There is in the Department a Director of Cost Assessment and
Program Evaluation, who shall report directly to the Secretary.
(b) Responsibilities.--The responsibilities of the Director
are as follows:
(1) To develop policies and procedures for cost
estimation and analysis of major acquisition programs
of the Department.
(2) To conduct independent cost estimates and
analyses for major acquisition programs to support
acquisition decisions, or any other acquisitions as
directed by the Secretary,
(3) To provide an independent cost estimate to the
Assistant Secretary for Acquisition in advance of a
decision to proceed with full-scale acquisition for a
major acquisition program or any other program as
directed by the Director.
(4) To evaluate the effectiveness of major
acquisition programs in meeting Department objectives.
(5) Not less frequently than once each year, to
submit to the Secretary and the Committee on Veterans'
Affairs of the Senate and the Committee on Veterans'
Affairs of the House of Representatives an annual
report on cost estimation and program evaluation
activities, including recommendations to improve
acquisition efficiency. Such report shall include a
list of all acquisitions where the independent cost
estimate for a major acquisition program exceeded the
budget request for the program by more than 5 percent.
(c) Support and Resources.--The Chief Financial Officer of
the Department shall provide to the Secretary such support and
resources as may be necessary for the Secretary to ensure the
effective establishment and functioning of the Director of Cost
Assessment and Program Evaluation.
SEC. 8185. REQUIREMENTS DEVELOPMENT PROCESS.
(a) Establishment of Process.-- (1) The Secretary shall
establish a standardized requirements development process for
major acquisition programs.
(2) The process established pursuant to paragraph (1)
shall--
(A) define and validate mission-driven requirements
for major acquisition programs exceeding $200,000,000
annually or $1,000,000,000 in lifecycle costs, in
coordination with the Assistant Secretary for
Acquisition;
(B) incorporate data-driven needs assessments,
stakeholder input from relevant administrations, staff
offices, and other elements of the Department and
veterans service organizations, and alignment with
statutory mandates, such as section 8121 of this title;
and
(C) ensure iterative validation of requirements
through independent verification and validation, as
described in section 8185 of this title, to confirm
cost, schedule, and performance baselines.
(b) Limitation on Personnel.--The Secretary shall implement
the process established pursuant to subsection (a) using staff
within the Office of Acquisition and other relevant offices of
the Department, as established under section 8182 of this
title, without creating new positions, unless a subsequent
cost-benefit analysis, validated by the Director of Cost
Assessment and Program Evaluation, justifies additional
resources.
* * * * * * *
Clerical Amendment
The table of sections at the beginning of chapter 81 of
title 38, United States Code, is amended by adding at the end
the following:
``Subchapter VII--Acquisition Organization, Cost Assessment, and
Program Evaluation''
``8181. Definition of major acquisition program.
``8182. Acquisition reorganization.
``8183. Major acquisition program managers.
``8184. Cost assessment and program evaluation.
``8185. Requirements development process.''
[all]