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65–874 2011

INSPECT WHAT YOU EXPECT: CONSTRUCTION 

CONTRACTING PRACTICES AT THE 

U.S. DEPARTMENT OF VETERANS AFFAIRS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

APRIL 13, 2011 

Serial No. 112–8 

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 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida 

DAVID P. ROE, Tennessee 

MARLIN A. STUTZMAN, Indiana 

BILL FLORES, Texas 

BILL JOHNSON, Ohio 

JEFF DENHAM, California 

JON RUNYAN, New Jersey 

DAN BENISHEK, Michigan 

ANN MARIE BUERKLE, New York 

TIM HUELSKAMP, Kansas 

Vacancy 

Vacancy 

BOB FILNER, California, Ranking 

CORRINE BROWN, Florida 

SILVESTRE REYES, Texas 

MICHAEL H. MICHAUD, Maine 

LINDA T. SA ́ NCHEZ, California 

BRUCE L. BRALEY, Iowa 

JERRY MCNERNEY, California 

JOE DONNELLY, Indiana 

TIMOTHY J. WALZ, Minnesota 

JOHN BARROW, Georgia 

RUSS CARNAHAN, Missouri 

Helen W. Tolar, Staff Director and Chief Counsel 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

BILL JOHNSON, Ohio, Chairman 

CLIFF STEARNS, Florida 

DOUG LAMBORN, Colorado 

DAVID P. ROE, Tennessee 

DAN BENISHEK, Michigan 

BILL FLORES, Texas 

JOE DONNELLY, Indiana, Ranking 

JERRY MCNERNEY, California 

JOHN BARROW, Georgia 

BOB FILNER, California 

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 official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 


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C O N T E N T S 

April 13, 2011 

Page 

Inspect What You Expect: Construction Contracting Practices at the U.S. 

Department of Veterans Affairs .......................................................................... 1 

OPENING STATEMENTS 

Chairman Bill Johnson ........................................................................................... 1 

Prepared statement of Chairman Johnson ..................................................... 33 

Hon. Joe Donnelly, Ranking Democratic Member ................................................ 3 

Prepared statement of Congressman Donnelly .............................................. 34 

Hon. John Barrow, prepared statement of ............................................................ 34 

WITNESSES 

U.S. Department of Veterans Affairs: 

Belinda J. Finn, Assistant Inspector General for Audits and Evaluations, 

Office of Inspector General .............................................................................. 4 

Prepared statement of Ms. Finn ..................................................................... 35 

Glenn D. Haggstrom, Executive Director, Office of Acquisition, Logistics, 

and Construction .............................................................................................. 13 

Prepared statement of Mr. Haggstrom ........................................................... 40 

MATERIAL SUBMITTED FOR THE RECORD 

Post-Hearing Follow-up Information: 

Glenn D. Haggstrom, Executive Director, Office of Acquisition, Logistics, 

and Construction, U.S. Department of Veterans Affairs to Director 

for Congressional Affairs, Memorandum and Attachments, dated 

April 28, 2011 ................................................................................................ 42 

Post-Hearing Questions and Responses for the Record: 

Hon. Bill Johnson, Chairman, Subcommittee on Oversight and Investigations, Committee on Veterans’ Affairs, to Hon. Eric K. Shinseki, Secretary, U.S. Department of Veterans Affairs, letter dated May 10, 2011, 

and VA responses .......................................................................................... 47 

Hon. Joe Donnelly, Ranking Member, Subcommittee on Oversight and 

Investigations, Committee on Veterans’ Affairs, to Glenn D. Haggstrom, 

Executive Director, Office of Acquisition, Logistics, and Construction, 

U.S. Department of Veterans Affairs, letter dated May 2, 2011, and 

VA responses ................................................................................................. 68 


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INSPECT WHAT YOU EXPECT: CONSTRUCTION 

CONTRACTING PRACTICES AT THE 

U.S. DEPARTMENT OF VETERANS AFFAIRS 

WEDNESDAY, April 13, 2011 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON VETERANS’ AFFAIRS, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:04 a.m., in 

Room 334, Cannon House Office Building, Bill Johnson [Chairman 

of the Subcommittee] presiding. 

Present: Representatives Johnson, Roe, Donnelly, McNerney, and 

Barrow. 

OPENING STATEMENT OF CHAIRMAN JOHNSON 

Mr. JOHNSON. Well, good morning, this hearing will come to 

order this morning. 

I want to welcome everyone to today’s hearing on Inspect What 

You Expect: Construction Contracting Practices at the U.S. Department of Veterans Affairs (VA). 

I would also like to apologize in advance that I may have to leave 

early or intermittently for a markup at the Natural Resources 

Committee taking place this morning. I apologize in advance for 

that conflict. I know that some other Members may have to leave 

for that same purpose, they will be affected as well, but we will get 

through the hearing as best we can or we will recess if necessary 

to accommodate those. 

Before we start I would like us to real briefly recite the pledge 

of allegiance. So if everyone would rise we will start off that way. 

[Pledge was taken.] 

Mr. JOHNSON. And again, thank you very much. 

In a Department the size of the VA, the contracting process involves billions of dollars annually. These funds are necessary to ensure those who so bravely served the country are provided the care 

and benefits that they have earned; however, problems arise when 

the contracting process is mismanaged and poorly executed contracting on the scale of billions of dollars, such as what we see at 

VA, can mean billions of dollars wasted, taxpayer dollars that were 

supposed to help the veterans. 

A contracting process done correctly can actually help an organization save money in the long run. 

Good contracting on a construction project entails having an 

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erential treatment, and executing a timely process that results in 

a product delivered in a timely fashion and at the best cost. 

VA has acknowledged it would improve the quality of its contracting process through the use of the Electronic Contract Management System, or eCMS, as it has become known. 

In June of 2007, an information letter was issued by VA’s Executive Director of the Office of Acquisition and Logistics mandating 

the use of eCMS. This database would record and track procurement actions of over $25,000, and the data could then be easily and 

comprehensively reviewed to determine the effectiveness of VA’s 

contracting processes and make changes where necessary. Cost 

overruns could be identified and addressed early on, and perhaps 

even prevented in the first place. 

This sensible approach to overseeing the contracting process 

could reduce overall contract mismanagement, prevent potential 

fraud, and ultimately prevent wasted taxpayer funding. 

For some reason, despite its mandated usage, many supervisors 

and managers across the VA choose and have chosen to ignore 

eCMS, instead allowing the contracting system and associated runaway costs to continue. 

VA’s Office of Inspector General (OIG) found clear cases of missing and incomplete information, and in one test discovered that 83 

percent of the transactions that should have gone into eCMS were 

left out. Examples such as this dilute the value of eCMS as an accountability measure, and in the end veterans and taxpayers bear 

the loss. 

While VA acknowledged the OIG’s findings and concurred with 

recommendations for improvement, it is my wish to see concrete 

evidence of that improvement. 

Reports of other clear cases of contract mismanagement are 

equally disturbing, including bundling contracts as well as splitting 

contracts, as was substantiated by the Deputy Assistant Secretary 

for Acquisition and Logistics nearly a year ago. 

As these contracts are mishandled, much needed construction is 

slowed considerably and the needed services that a new medical facility would provide are further delayed. Again, those who are hurt 

most by these actions are the veterans. 

If we are to get this right, there must be decisive leadership in 

contracting and accountability for actions at all levels. If eCMS was 

mandated by VA’s leadership to be used, why then is it obviously 

not being used? If certain contracts on a construction project are 

intended for veteran-owned small businesses, why would a large 

business be competing for them? If plans are put in place for an 

expanded outpatient clinic, why then would the size and scope of 

that project change, not once, but twice? 

It is past time for these billions of construction contracting dollars to be used effectively, efficiently, and in a timely fashion so the 

veterans who need the services provided by these facilities can access them. 

I appreciate everyone’s attendance at this hearing and I now 

yield to the Ranking Member for an opening statement. 

[The prepared statement of Chairman Johnson appears on p. 33.] 


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OPENING STATEMENT OF HON. JOE DONNELLY 

Mr. DONNELLY. Thank you, Mr. Chairman, for holding this hearing today, I look forward to today’s discussion. 

I would like to welcome everyone as we have the opportunity to 

conduct the Subcommittee on Oversight and Investigations first 

hearing of the 112th Congress. 

I am honored to serve as the Ranking Member and look forward 

to working with Chairman Johnson and other Members on both 

sides of the aisle. 

Prior to today’s hearing, we had the opportunity to meet and discuss the Oversight and Investigations (O&I) agenda for the upcoming year, and from our discussions, I know we have a full plate, 

and one we are both committed to working in a bipartisan manner 

as we seek to provide the oversight our Nation’s veterans rightly 

deserve. 

Today’s hearing is an example of that bipartisan work. The VA 

procurement efforts and initiatives have been problematic and controversial at times. It is important we make certain the VA is doing 

their due diligence prior to awarding contracts. There are many 

steps the VA must take in between initiating procurement project 

proposals and post-awards. 

Today, we hope the VA will assure us that construction projects 

are fully reviewed to ensure successful delivery and management. 

It seems to me that there have been too many VA Office of Inspector General reports indicating that the VA’s lack of contract details is there. Furthermore, unrealistic and unreasonable acquisition plans have led to escalated contract costs and unmet contractor milestones. 

One of my concerns is how many times do we need to meet with 

the VA only to find out that after millions of dollars have been 

spent on a contract the contractor walks away with these funds 

after the VA cancels their contracts due to unmet deliverables? 

This is an indication that we have to do better. 

Furthermore, since the 110th Congress, this Committee has been 

providing oversight on contract bundling. I am familiar with these 

issues having been a Member of the Committee on Veterans’ Affairs since the 110th Congress and have participated in various 

hearings on this topic. 

Contract bundling by contracting officers should be reviewed 

carefully as well. Whether it may be awarding contracts or setaside initiatives for veteran-owned small businesses, bundled contracts create opportunities for fraud and mismanagement. 

I will be particularly interested in the implementation of the 

VA’s Electronic Contract Management System. 

Thank you, Mr. Chairman, and I yield back. 

[The prepared statement of Mr. Donnelly appears on p. 34.] 

Mr. JOHNSON. I thank my colleague for his comments and now 

I invite the first panel to the witness table. 

On this panel we will hear testimony from Belinda J. Finn, Assistant Inspector General for Audits and Evaluations at the VA Office of Inspector General; Assistant Inspector General Finn is accompanied by Cherie Palmer, and Audit Director at the Chicago 

Audit Operations Division of the VA Office of the Inspector General. 


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Ms. Finn, your complete written statement will be made part of 

this hearing record, and you are recognized for 5 minutes. 

STATEMENT OF BELINDA J. FINN, ASSISTANT INSPECTOR 

GENERAL FOR AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY CHERIE PALMER, DIRECTOR, CHICAGO OFFICE OF AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS 

STATEMENT OF BELINDA J. FINN 

Ms. FINN. Mr. Chairman and Members of the Subcommittee, 

good morning and thank you for this opportunity to testify on the 

Department of Veterans Affairs procurement processes and construction. 

With me today is Cherie Palmer, Director of the Chicago Audit 

Division. 

Procurement continues to be one of VA’s major management 

challenges. Our oversight of VA’s procurement activities has reported on the need for increased management visibility of VA acquisitions on several occasions. Having accurate and reliable information is critical for VA’s ability to manage its acquisitions nationwide and make good procurement decisions. 

In July 2009, we reported that the VA Electronic Contract Management System known as eCMS, contained incomplete information on VA acquisitions. We compared the contract actions in eCMS 

with data from two other sources. 

First, we looked for information on over 6,000 procurement actions from VA’s Integrated Funds Control System. We found that 

nearly 83 percent of those actions were not recorded in eCMS. 

Second, we compared contract actions from the General Services 

Administration’s (GSA’s) Federal Procurement Data System and 

found nearly 21 percent of those actions were only partially completed in eCMS. The eCMS contained no information on another 31 

percent, and in total eCMS had complete information on less than 

half of the over 1400 actions we checked from GSA’s system. 

Therefore, we concluded that the reports generated by eCMS 

were unreliable, incomplete, and could not be used when making 

management decisions. 

We recommended eight separate actions of which three remain 

unimplemented today. The open recommendations including implementing a VA-wide eCMS policy handbook, improving the technical 

performance of eCMS, and integrating eCMS with VA financial systems. 

Additionally ongoing audit work at VA’s largest contracting activity continues to identify problems in the use of eCMS to develop 

and maintain national contracts. 

As part of our oversight on VA’s construction program, we performed a follow-up audit in 2009 and found that VA had established a Quality Assurance (QA) program and procedures to resolve 

previously reported problems; however, QA programs still needed 

written policies, procedures, performance measures, and a staffing 

plan. We noted that the QA program could not oversee contract 


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schedule slippage because it was focused on performing field acquisition reviews. 

VA management agreed with our recommendations to address 

the reported problems and has completed action on all but one of 

the four recommendations. 

We will continue to access the effectiveness of VA’s construction 

program in future work. 

In addition to our national audits of acquisition and construction, 

the OIG provides ongoing oversight through other avenues. For example, OIG criminal investigators liaison with VA contracting personnel, program managers, and contractor staff to deter, detect, 

and investigate potential construction fraud. 

Finally, our Office of Contract Review began reviewing pre-award 

documents and claims related to construction contracts earlier this 

year. 

While VA has recognized deficiencies in its acquisition processes 

and infrastructure they have much more work to do. We believe VA 

should continue its efforts to leverage the full capability of eCMS 

and integrate it into existing and future financial systems. 

Mr. Chairman, this concludes my statement. We would be 

pleased to answer any questions that you or other Members of the 

Subcommittee may have. 

[The prepared statement of Ms. Finn appears on p. 35.] 

Mr. JOHNSON. Thank you, Ms. Finn, I appreciate that very much. 

We will now—Ms. Palmer you do not have an opening statement; 

is that correct? Okay. All right, just wanted to make sure. 

Well, let us immediately go into questions. And Ms. Finn, could 

you describe for us the basic functions of eCMS? 

Ms. FINN. I will describe them as far as I can. I am not a user 

of the system, so a more complete answer would probably come 

from the second panel, from the VA experts. 

The eCMS is a contract writing system. It was developed to be 

able to prepare contract documents and clauses easily. 

For us it provides the capability to compile information on the 

contracts in a particular location. Before eCMS, that capability was 

not in the Department, and as we were doing audits we would have 

to build a universe at every location we went to in order to have 

a group of contracts from which to do our work. 

Mr. JOHNSON. In your written testimony, you provided several 

examples of incomplete or missing contracts within eCMS. In your 

opinion, would the proper use of eCMS have aided the VA in more 

effective project management? 

Ms. FINN. It is a little difficult to extrapolate the contract information in eCMS to total project management, and I say that because project management involves much more than just managing 

the contract. Certainly though knowing your contracts and having 

that information handy is a critical piece of information. 

Mr. JOHNSON. During your testimony, you talked about one of 

your recommendations being the integration of eCMS into other VA 

systems, including their financial management systems. I believe 

that is what you said if I understood correctly. Certainly program 

management, financial management of projects as a core aspect of 

any program management philosophy or system. 


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Is it safe to say that if eCMS were being used properly and integrated properly that we would have, the VA would have a more effective vision or ability to see comprehensively what is going on 

within these very expensive contract or construction projects? 

Ms. FINN. I think that is fair to say. One of the issues we noted 

when we were first looking at the usage of eCMS is that people 

working in the field had to input information twice in order to use 

eCMS. They had to put in it eCMS and they also had to put it into 

the Integrated Funds Distribution, Control Point Activity, Accounting and Procurement (IFCAP) system, which is the integrated fund 

control system. 

IFCAP controlled the obligations, and so those managers really 

needed to put it into the IFCAP because that was their funding 

mechanism in their financial system that fed into VA’s financial 

systems. So faced with those choices, they tended to put it into 

their financial system and not put it into eCMS. 

If it is integrated, they will put it into eCMS and it should feed 

into the financial system and we will have better records. 

Mr. JOHNSON. Okay. Let us go back to the overall purpose of 

eCMS, and correct me if I am wrong, but eCMS is basically an 

oversight, an accountability tool, right? I mean it allows those, including senior officials within the VA, as well as Members of Congress, to be able to go look at the status of projects and contracts, 

correct? 

Ms. FINN. Yes, and from our viewpoint, it is a great advantage 

when contracts are on eCMS because we can look at them remotely 

from our office in Los Angeles where as before, we had to travel 

to every single facility in order to look at hard copies. 

Mr. JOHNSON. All right. 

Thank you very much, I think that is all the questions I have 

at this point. I will now yield to Ranking Member Donnelly for his 

questions. 

Mr. DONNELLY. Thank you, Mr. Chairman. Good morning, Ms. 

Finn, thank you for being with us here today, and good morning, 

Ms. Palmer, thank you very much. I am from South Bend, Indiana, 

not too far away from Chicago, so it is good to see you out here. 

Ms. Finn, why do you think these problems have developed? Is 

there a consistent theme as to something VA is missing or is failing 

to do in hitting the proper contracting methods? 

Ms. FINN. Are you referring to why consistently we find eCMS 

still isn’t being used? 

Mr. DONNELLY. Yes. 

Ms. FINN. Okay. Ms. Palmer has some insights on that, I am 

going to ask her to share them. 

Ms. PALMER. Thank you, Belinda. 

During our audit work for the audit of eCMS, we surveyed 1,382 

users across all VA business lines. Our survey respondents stated 

that eCMS is not used consistently due to personnel shortages, 

time constraints, heavy workloads, inadequate training, and conflicting guidance. They also stated that the system was slow and 

cumbersome and told us that they received conflicting guidance on 

how to use the system. 

During our ongoing work at the National Acquisition Center, we 

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struction (OALC) mandated eCMS usage, it did not adequately ensure the required use of eCMS. 

Contract data is entered and maintained in the National Acquisition Center Contract Management System, which is a separate system; however, eCMS is the mandated acquisition information system. It only serves VA customers and that is why they utilize two 

systems. Other government agencies, non-VA customers using the 

national contracts cannot access the information available in 

eCMS. The CM system provides an Internet electronic catalog function that allows non-VA customers to access that contract data. 

Mr. DONNELLY. Do you feel the VA personnel who do contracting 

that the eCMS system is there but they more or less feel I have 

to get a contract done, I have to get this organized, I have to get 

this out and they really don’t know how to properly use eCMS, is 

that what you are hearing? 

Ms. PALMER. I think the survey that we did in 2009 would agree 

with exactly what you said, but we haven’t done any follow-up 

work. 

Mr. DONNELLY. Ms. Finn, do you have any estimate, ballpark, we 

are not going to hold you to an exact number obviously, but the 

failure to use the system properly, the contracting that is done 

with some of the steps missing. Do you have any idea how much 

money this is costing us at the end of the day? How much money 

could be saved that is not? 

Ms. FINN. No, sir, I really don’t. I can’t say for sure those contracts aren’t managed properly. 

Mr. DONNELLY. Right. 

Ms. FINN. We just know they are not being recorded. 

Mr. DONNELLY. Okay. And so what we have is we can’t say the 

contracts aren’t being run the best that contracts can be run, it has 

just not been put into the system the right way. 

Ms. FINN. It is not in the system and so, therefore, the visibility 

of that contract is possibly going to be limited once you get away 

from the local facility where the contract was awarded. 

Mr. DONNELLY. What do you think is the most important thing 

that the VA can do to start running these contracts properly? 

Ms. FINN. I think having the oversight and the visibility is a very 

important first step. You can’t manage what you don’t know about, 

and that is true for the facility, the Veterans Integrated Services 

Network (VISN), the network offices, and also the Veterans Health 

Administration (VHA), as well as VA and even my office. It is hard 

to provide oversight when you don’t know about something and you 

have to go search it out. I think that is a key. 

I think the problems with the usage of eCMS being cumbersome 

and hard are hurdles that the Department is still working on to 

improve the technical performance of the system and that is a critical step, because as you said, if you are pushed for time you may 

skip a step because it is hard to do. So they definitely need to work 

on improving the technical performance of the system and the integration to make it seamless that will help improve the visibility a 

great deal. 

Mr. DONNELLY. Well, my time is up, but I want to thank both 

of you for your efforts to do a good job with the VA and to save 

taxpayer dollars. 


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So with that, Mr. Chairman, I will yield back. 

Mr. JOHNSON. I thank the gentleman and I now yield to my colleague from Tennessee, Mr. Roe, for your questioning. 

Mr. ROE. Okay, thank you, Mr. Chairman, and thank you all for 

being here today. 

I guess one of the questions, you know, we talk a lot about mandates around here, you are being adjudicated in a court about another subject, but if the VA is mandated to implement and use this 

system are there any penalties if you just decide it is too—I think 

you mentioned we don’t have enough people, it is too cumbersome, 

and slow, we are not trained and on and on. Those are all excuses, 

but if you are mandated to do it I thought you should be doing it, 

and if you don’t do it is there any penalty at all for not just not 

doing it? 

Ms. FINN. I don’t know of any penalty, but the VA panel who is 

coming after me may be able to answer that question. 

Mr. ROE. Okay. Well, I realize that new things or different things 

are hard to do. I mean we have all been in new systems that are 

difficult and we tend to go with what we are comfortable with and 

we know has worked before. 

And so, I guess the next question I have on the new eCMS system, it was put there for transparency; is that correct, so that you 

and I and other people would have access to this information so 

that we can make decisions about how these billions of dollars in 

VA are being spent; is that correct? 

Ms. FINN. That is my understanding. 

Mr. ROE. Yes. And when it is not being implemented is there a 

way, Ms. Finn, and I guess Ms. Palmer either one of you can answer this, that you can easily find out this information or is it just 

a rat maze? 

Ms. FINN. No, there is not a way. In the past, in order to do audits at facilities, we have had to resort to searching through financial systems using cost accounting codes or other mechanisms to 

try and identify contracts. It is very difficult. 

Mr. ROE. So it would be impossible for me or anyone or any citizen or anybody else to ever get that information? 

Ms. FINN. I would think it would be pretty close, yes. 

Mr. ROE. Okay. So then one of the reasons, how long has this 

system been in place? When was it implemented, what year? 

Ms. FINN. 2007. 

Mr. ROE. So this is the fourth year that it would have been implemented. 

Ms. FINN. Yes, sir, I believe so. 

Mr. ROE. And it is not being used, and in a sense there is no penalty, there really isn’t any urgency to implement the system the 

best I can see; is that correct? 

Ms. FINN. The system is being used. It was not being used totally 

when we did our first audit. We haven’t done a full followup to see 

the total usage now, but we do know from some statistics the Department has reported to us as they have increased their oversight 

since our report that the usage has increased dramatically. 

Mr. ROE. Well, I guess from O&I investigation or is it reasonable 

to think that when you implement a system that you should be 

able to do it in less than 4 years? 


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Ms. FINN. I guess I would say the system is implemented. It has 

taken that long to get consistent usage, and I don’t know if it 

should take 4 years. It does seem a little long. 

Mr. ROE. I think we know the answer to that question. 

And this is through the VA procurement and various contracting, 

of course they will be up here in a minute and we will be able to 

ask them questions. 

If you had a suggestion would you relook? Do you think that your 

particular investigation has uncovered anything? Because you mentioned something I thought was very important, because they are 

entered in it doesn’t mean it is not being done right. 

Ms. FINN. Yes. 

Mr. ROE. It just means it is hard to find the information. 

Ms. FINN. Correct. 

Mr. ROE. Not that VA is hiding anything or anything like that, 

it is just that they are not—well, we will find out in a minute what 

they are doing. 

Any other comments about that? If not I have no further questions. 

Ms. FINN. No, sir, I don’t. 

Mr. JOHNSON. I thank the gentleman for yielding back. 

At this time I would recognize the gentleman from Georgia, Mr. 

Barrow. 

Mr. BARROW. Thank you, Mr. Chairman. 

Ms. Finn, thus far we have been talking about the subject of 

knowing what you are getting with goods and services. We haven’t 

talked so much about when you get what you bargain for, but making sure we get what we are paying for. But when we get it it has 

not been as much a part of your testimony as I have gathered. I 

note you say that the subject of contract schedule slippage hasn’t 

been the main focus, you have been focused mainly on performing 

field acquisition review, and it sounds like your focus has been not 

so much on when we get what we are paying for, but what we are 

getting and whether we are getting what we are paying for, and 

I want to talk about the subject of when we are getting what we 

are paying for or waiting for, because all the problems that you describe and talk about are much more—are aggravated greatly by 

the decision about when to decide to build something. 

Take in my situation, for example, we have been on the ready 

line for a community-based outpatient clinic (CBOC) in Statesboro, 

Georgia, for 4 years now and we have gotten conflicting reports 

from the VISN, from the Secretary’s office, as to when the thing is 

going to get built. And it disturbs me greatly when in response to 

our last inquiry about this, we get response from the VA that basically talks about what is going on in Hinesville, Georgia, a very different project in the adjoining district represented by my colleague, 

Jack Kingston, not at all responsive to the inquiry we were pursuing for years about trying to get something built in Statesboro. 

What can you say about the process about how we go about deciding where we are going to build things like community-based 

outpatient clinics? How is that process working? 

Ms. FINN. Unfortunately, Mr. Barrow, I can say very little about 

it, and mainly because we just have not done any comprehensive 

work to look at that process. 


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Mr. BARROW. Well, I am going to tell you, that is something of 

real concern to the folks that I represent, because it is a part of 

VA policy to try and provide the services on a local basis that are 

needed on a local basis, the health care, the mental care, the things 

that can be delivered locally greatly reduces the burden on the constituent population of having traveled long distances to get the socalled free care they have been promised that they bargained for, 

and to offer that promise on the one hand and then be dangling 

out the prospect of a CBOC in a hugely under-served area like I 

represent. 

You have folks in Augusta who are just ready to go to include 

these folks in their network. They want to get going on this. You 

got the constituent population in the five county areas surrounding 

Statesboro that is just dying to get local care so they don’t have to 

drive an hour either to Dublin or to Savannah, or worse yet to farther places in order to get the low maintenance, high-impact care 

they can get through a CBOC, and we have not gotten a straight 

answer yet as to when that is going to happen. 

So in addition to all the things that you are occupied with there, 

are those of us who are still waiting to find out when we are going 

to get in line to experience all the problems that you are grappling 

with. 

So I thank you for your diligence in focusing on your part of the 

problem, but understand as well the part of the problem of deciding 

where we are going to build things and when we are going to build 

them. If you can take that issue up, please, we definitely would like 

to follow up with you. 

Mr. Chairman, with that I yield back. 

Mr. JOHNSON. I thank the gentleman for yielding back. 

I now recognize the gentleman from California for his questions. 

Mr. MCNERNEY. Thank you, Chairman Johnson. Good morning 

and thanks for coming this morning. 

One of the things I hear you say and I read from your written 

testimony is that the eCMS system is overly cumbersome, or at 

least that is what some of the employees are reporting, but procurement is somewhat subjective, by its very nature you have to 

look at different bids, you have to make a decision whether they 

can provide and so on, so any computer driven system is going to 

be cumbersome. 

So what I would like to know is, is there a better system out 

there than eCMS, could you answer that question, that you are 

aware of? 

Ms. FINN. I am not aware of any other system that does this type 

work, so I really can’t give you an opinion, I am sorry. 

Mr. MCNERNEY. Well, the VA is a big organization, it has lots 

of contracts, it seems to me that it is big enough to be able to go 

to whoever produces eCMS and say we need these changes to make 

it more responsive to our needs. Is that happening that you are 

aware of? 

Ms. FINN. As I said earlier I believe they are working to implement one of our recommendations related to improving the technical performance, I don’t have the details with me of exactly what 

steps they are taking, but I would imagine Mr. Haggstrom will be 

able to give you more information. 


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Mr. MCNERNEY. One other question about the eCMS. Is that private or public? Is it publicly available software or is it a private 

that you have to purchase? 

Ms. FINN. I believe that it is privately developed and proprietary. 

Mr. MCNERNEY. Okay. Do you know if there is anyone here from 

eCMS this morning or if they are paying attention to this hearing? 

Ms. FINN. I do not know, sir. 

Mr. MCNERNEY. Okay. Well, I hope they are. And I would recommend that the VA use its purchasing clout to work with them 

to make the system more easily responsive. 

And I certainly appreciated my colleague Mr. Roe’s comments 

about enforcement. How do you think we can ensure greater oversight and transparency of the VA system in general? 

Ms. FINN. I think we can ensure greater oversight by continuing 

to provide oversight from your side and also from mine. You know, 

as we continue to look at things we do see improvements. Continued attention makes a difference. 

Mr. MCNERNEY. Well, you know, I have been in private industry 

for many years, you know, the purchasing and contracting is a 

black art, and the more that you work within that the more that 

you can make it responsive. So you know, the statement that the 

VA employees don’t think that the—they think the system is too 

cumbersome, it takes too much time, no, those excuses don’t fly 

with me and they don’t make sense. 

So we are going to have to keep an eye on that as we move forward. And thank you for your testimony. 

Mr. JOHNSON. I thank the gentleman. 

With the Committee’s indulgence I have another couple of questions, and so I am going to go into a second round here and we will 

try to make this brief. If any of you have additional questions, gentlemen, we will get to those too. 

Ms. Palmer, would you read back again what you said earlier in 

your survey what people said were the distractions or the reasons 

why they were not using eCMS? 

Ms. PALMER. Yes. The survey respondent stated that eCMS is 

not used consistently due to personnel shortages, time constraints, 

heavy workloads, inadequate training, conflicting guidance, it is a 

slow and cumbersome system, and they received conflicting guidance on its usage. 

Mr. JOHNSON. Okay. As a former Chief Information Officer (CIO) 

myself and with other 30 years in information technology (IT), I 

can certainly relate to the technical aspects of a cumbersome system. Outside of the technical aspects though, and I will address 

this to Ms. Finn, and to both of you actually if you would like to 

respond, outside of the technical aspects of the system, and it is 

subjective whether that is cumbersome or not depending on the 

user, every one of the other reasons for inconsistent use are management decisions, right? I mean that is what management is supposed to do is to provide training. Training is an integral part of 

the acquisition of a system like eCMS. Everybody has workloads to 

deal with, and certainly time constraints. 

It seems to me, eCMS, that kind of system that does contract 

writing is designed to break down time constraints. 


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And I would appreciate a response from both of you. Would you 

agree that the inconsistent use reasons given are primarily focused 

around management issues? 

Ms. FINN. Yes, sir, I would agree that those are management 

issues. We obviously had a recommendation related to training 

from this report and VA did provide a great deal more training and 

address some of the other management issues such as having conflicting guidance as to what people were expected to do. 

As VA worked to obligate money from the Recovery Act it mandated that every contract, no matter what size, funded with Recovery Act money be completed in eCMS, and as we looked at those 

contracts we didn’t find any lapse with the contract being there, 

but we did still find problems with some of the documentation 

being there. 

But yes, they are management issues that will take continued attention in order to address. 

Mr. JOHNSON. Okay. Ms. Palmer, any comments on that? 

Ms. PALMER. No, sir, I don’t have anything else to add. 

Mr. JOHNSON. Okay, all right. Thank you. That is my last question. I will see if our other Committee Members have, standing in 

for the Ranking Member, Mr. McNerney, do you have further questions? 

Mr. MCNERNEY. Yes, I do. Actually one of your statements is 

that you have trained 14,000 VA employees annually and that is 

a pretty big number of people to train effectively in a year. 

Ms. FINN. Yes, sir, that is in fraud awareness. We provide regular briefings to people in VHA, as well as the Veterans Benefits 

Administration on issues that they should be aware of as managers 

and people on the front line who might see fraud situations. 

Mr. MCNERNEY. How much effort is devoted to training people 

in the eCMS system? 

Ms. FINN. From the OIG Office we don’t provide that training. 

The Department provides that training. 

Mr. MCNERNEY. So you are not aware of how much training is 

involved? 

Ms. FINN. No, sir, I am not. 

Mr. MCNERNEY. If we were to hold a hearing a month from now 

and ask you to provide names of managers at the VA that are falling down in terms of their employees complying with eCMS could 

you do that? 

Ms. FINN. A month might be a very short time in order to give 

you comprehensive information. 

Mr. MCNERNEY. What would be an appropriate time frame? 

Ms. FINN. Several months at least I would think. I don’t know, 

because I don’t know the scope of what we might need to look at. 

If we were trying to make a determination across the entire Department that would take quite a long time. 

Mr. MCNERNEY. And in your opinion would that be something 

that would be effective in terms of enforcing compliance with 

eCMS? 

Ms. FINN. It would certainly get their attention. 

Mr. MCNERNEY. I think it would, yes. All right, thank you, that 

is my last question. 


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Mr. JOHNSON. Thank you. The gentleman from Tennessee no further questions? Mr. Barrow from Georgia? I am sorry, Ranking 

Member Donnelly returned. Mr. Donnelly, do you have any further 

questions? 

Well, on behalf of the Committee, ladies, Ms. Finn and Ms. Palmer, thank you so much for your testimony today. We look forward 

to moving forward with you on ensuring a well managed contracting process for construction at VA. You are now excused. 

Thank you. 

Ms. FINN. Thank you. 

Mr. JOHNSON. And I invite the second panel to the witness table. 

I now welcome Mr. Glenn D. Haggstrom, the Executive Director of 

the Office of Acquisition, Logistics, and Construction at VA. Mr. 

Haggstrom is accompanied by Mr. Jan Frye, Deputy Assistant Secretary of the Office of Acquisition and Logistics at VA, and Mr. 

Robert Neary the Director of the Service Delivery Office in the Office of Construction and Facilities Management as well as the Acting Director of the Office of Construction and Facilities Management at VA. 

Mr. Haggstrom, your written testimony, your written statement, 

will be included in the hearing record and you are now recognized 

for 5 minutes. I sense you folks have been here before probably so 

you know just to hit the talk button. 

STATEMENT OF GLENN D. HAGGSTROM, EXECUTIVE DIRECTOR, OFFICE OF ACQUISITION, LOGISTICS, AND CONSTRUCTION, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY JAN R. FRYE, DEPUTY ASSISTANT SECRETARY, 

OFFICE OF ACQUISITION AND LOGISTICS, U.S. DEPARTMENT 

OF VETERANS AFFAIRS; AND ROBERT NEARY, ACTING DIRECTOR, OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS 

Mr. HAGGSTROM. Thank you, Mr. Chairman Johnson, Ranking 

Member Donnelly, and distinguished Members of the Committee, 

thank you for the opportunity to appear before you today to discuss 

the Department of Veterans Affairs Acquisition, Logistics, and Facilities Management operations. 

It is a privilege for me to represent the many dedicated and hard 

working professionals and provide mission critical support every 

day to necessary contracts, logistic support, and facilities are available for some of our Nations most extraordinary citizens, veterans. 

The Office of Acquisition, Logistics, and Construction was formed 

in October 2008 to support the construction needs of the Department of Veterans Affairs. Those organizations were brought together to provide an enterprise approach to policy, process, and 

systems necessary to support these similar functions resident in 

each of the VA administrations. 

The core responsibilities and an integrated acquisition model 

were affirmed by the Secretary on April 2010. Together the structural and process changes will enable the Department to serve our 

internal customer’s needs and ultimately our veterans in a more efficient manner. 

OALC has six fundamental roles in the operation of the Department. Achieve clear ownership and accountability of the VA conVerDate Mar 15 2010 07:19 Aug 27, 2011 Jkt 065874 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 I:\WAYS\OUT\65874.XXX GPO1 PsN: 65874

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tracting mission, gain control over acquisition and facilities management information, effectively manage the acquisition life cycle 

for contracting and construction, develop critical human capital resources, enhance information management to support corporate decision-making, and finally improve service delivery. 

With the focus of today’s hearing on VA’s Electronic Contract 

Management System and the major construction program I would 

like to inform the Committee on where we stand with regard to 

completing the recommendations identified by the OIG in each of 

the reports. 

Currently OALC has two VA OIG reports with four recommendations that remain open. As part of OALC’s continuous improvement 

process the findings and recommendations of all OIG and GAO reports are captured, analyzed, tracked, and acted on. 

First, the audit of VA Electronic Contract Management, eCMS, 

published in July 2009 identified eight recommendations, five of 

which the OIG has closed. Significant progress has been made 

through management actions to complete system user training with 

training teams available to the administrations upon their request, 

putting in place oversight programs at the administration and 

headquarters level to review eCMS usage, and the ability to perform real property leasing functions within the system is in use. 

Three recommendations remain open. The recommendation to develop and implement a VA wide eCMS policy and handbook to ensure consistent use and compliance with the system requirements 

is nearing completion. We completed developing and providing an 

integrated role base matrix for using the individual eCMS user 

guides in the December 2010 release of the system. The remaining 

action to complete policy revision will be completed by the end of 

this month. 

The second open recommendation deals with the technical performance of the system. In response to this, we have completed 

phase one of our technical refresh in January 2010 with phase two 

scheduled to be completed in June of this year. 

The refresh include server replacement, software changes to increase performance, and expanded data repository capacities. 

Finally, the remaining recommendation was to determine feasibility of integrating eCMS with the integrated funds control point 

activity accounting and procurement system to streamline the procurement process. The integration software that has been completed and tested and is scheduled for production roll out in the 

first quarter of fiscal year 2012. 

The other of VA’s major construction contract award and administration process identified four recommendations with one still remaining open. 

Successfully closed were recommendations to establish effective 

mechanisms to monitor contract slippage and ensure the timely 

close out of major construction projects and develop a staffing plan 

to ensure quality assurance responsibilities are met. 

In the remaining open recommendation, OALC is developing 

written quality assurance policies and procedures and program performance measures addressing all quality assurance services areas 

of responsibilities. Phase one of this recommendation was completed in December of 2010, and phase two will be completed in 


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June of this year at which time we will recommend to the OIG that 

the report be closed. 

Also in 2009, the U.S. Government Accountability Office (GAO) 

issued a report on VA major construction noting that VA generally 

met GAO best practices for a Federal major construction program 

in 10 of 12 areas. From that report came two recommendations 

that VA fully supported and is in the process of implementing. 

First, the use of an integrated master schedule, and second, conducting a risk analysis based on the projects cost, schedule, and 

complexity. Both of these recommendations will be completed this 

fiscal year at which time VA will have implemented all 12 of GAO’s 

best practices. 

As proud as we are of the many improvements in VA’s acquisition and facilities management operations we recognize the need to 

continuous improvement and will work diligently to maintain the 

confidence of the American public and the Congress. 

Mr. Chairman, we appreciate the opportunity to discuss VA’s acquisition, logistics, and construction operations with you, my colleagues and I are available to answer your questions. 

[The prepared statement of Mr. Haggstrom appears on p. 40.] 

Mr. JOHNSON. Thank you, Mr. Haggstrom. What is the purpose 

of using eCMS? 

Mr. HAGGSTROM. The purpose of eCMS is an electronic contract 

writing system. As the requirements of our contracting officers 

have increased over the years for reporting certain measures, data 

up to the Federal procurement data system, the complexities of the 

contracting business at large, the majority of executive agencies 

have brought on these contract writing systems to have a central 

repository for our contracting officers to develop those contracts 

and do any modifications or keep track of what is happening with 

that specific contract. 

This information, if you will, then flows to what is called the procurement data system, which is system of record, if you will, for 

the Federal Government, the Federal procurement data system, 

and it also tracks much of the same information that is resident 

in eCMS. 

The eCMS, if you will, performs that back shop capability of the 

details that surround the contract. 

Mr. JOHNSON. Do you consider eCMS an effective tool? 

Mr. HAGGSTROM. There are always improvements that can be 

made to integrated systems. I believe it is. 

In my past workplace, I was part of bringing online a very tool 

similar to this, the integrated acquisition system. 

All of the Federal agencies that I am aware of, the large procuring offices have done this as part of the government’s e-procurement initiative, and while each of the agencies uses different types 

of the software and protocols, in general when you look at electronic contract management systems across government they are 

very similar in terms of the performance and capabilities that they 

have. 

Mr. JOHNSON. Do you consider eCMS as being properly used by 

the VA at this point? 


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Mr. HAGGSTROM. Mr. Chairman, we agree with what Ms. Finn 

was saying. eCMS is not used to the full capacity and we recognize 

that, and I believe there are two components to that. 

First is the technology component, if you will, and then I believe 

it is our responsibility as the headquarters and the provider of this 

system to ensure that what we have in terms of the system meets 

the performance requirements of our people, and that includes the 

training and the functionality and the response time, and all of 

these things were noted in Ms. Finn’s testimony that they looked 

at several years ago. 

The second piece of that is exactly what was discussed with the 

previous panel, and that is the management, and that is the accountability of our mid-level managers and our senior managers 

who are out in these contracting offices throughout the VA to ensure the enforcement of this policy and work with their people to 

ensure that they are using the system as it has been mandated to 

be used. 

Mr. JOHNSON. When did that management accountability process 

begin? I mean you heard the testimony of the previous panel, 20 

of 29 contracts written by the Office of Acquisition, Logistics, and 

Construction totaling over $10 million were not correctly developed 

and entered into eCMS. You have heard figures of 87 percent. 

I have been a leader, I have been a commander, I have been a 

senior executive in business, how long does it take to address these 

management issues? 

Mr. HAGGSTROM. Unfortunately, in this particular case, it has 

taken much too long. If I could ask Mr. Frye, who is also the senior 

procurement executive for the Department to comment on the implements of the system that took place back in 2007. 

Mr. FRYE. Yes, if I could take you back a little bit. I arrived here 

at VA in fiscal year 2006 and discovered VA had no contract writing system. I was astounded given the fact VA is the second largest 

Federal Government organization. We were literally writing contracts using Microsoft Word, I referred to it as writing contracts on 

the backside of an envelope. 

So we set about immediately to implement a contract writing 

system. VA spent just a little over $20 million, implemented it 

across the entire enterprise, and we completed implementation and 

were fully operational and capable by July of 2007. 

Following up on what Mr. Haggstrom said, this is a system we 

use to write contracts, but it gives us a reputable, measurable process in doing so, it gives us an all important database so we can 

punch the button literally and know how many contracts we have 

across VA, the dollar amounts and that type of thing. 

Mr. JOHNSON. Mr. Frye, I apologize, my time is up. We are probably going to have a second round, we will get back into this a little 

more. I will give you something to think about though. 

Four years later, $20 million of American taxpayer dollars and 

we have a system that is not being used for the most part when 

you consider previous testimony, 83 percent of the data not being 

in the system. That is a long time and a lot of money being spent 

with very low return on investment by the American taxpayers. 

Something is wrong here and I hope we can get into that. 


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I am going to yield to Ranking Member Donnelly now for his 

questions. 

Mr. DONNELLY. Thank you, Mr. Chairman. I will throw this out 

to all of you. What do you think is the most important next step 

you can pursue to make eCMS work better, to make a contract system work better? If you had your choice what next on your plate 

is the most important thing to do? 

Mr. HAGGSTROM. I think it is a continual process. You are never 

going to complete this process because people forget. We continually have new folks in the contracting business coming into the 

Department, so there is always this continuum of requirements. 

I think one of the most things is training. Providing the adequate 

training to our people for them to be able to use the system, understand the system, and exploit its capabilities, and this training is 

provided at the request of the administrations, but also when a 

new contracting officer joins the Department they are required to 

go through a 4-day course at the VA Acquisition Academy to understand and learn the system and how to use that system. 

Mr. DONNELLY. Do you have a course book for the VA Acquisition 

Academy? Like when that person comes for 4-day boot camp, do 

you have a book that you give them that tells them here is how 

eCMS works, here is when you do contracts we expect it to be handled? 

Mr. HAGGSTROM. We do have a course training guide that is left 

with the folks. Also because the eCMS system is web-based, all 

those instructional training and how do guides are resident within 

the system so that if the user has a question they can go to what 

we call our acquisition resource center, which is imbedded as part 

of this integrated technology, where they can go and they can look 

up questions, find the answers, and then apply that to that particular problem they experience. 

We also have a very robust help desk for eCMS that at any time 

a user can call the help desk and seek help from a staff of professionals who understand this system and can lend them advice on 

how to move forward with their problem. 

Mr. DONNELLY. So I guess the next question is, we have a lot of 

tools, how do we make sure these tools are used more? How do we 

get more people on it? Are there parts of the country that are doing 

better than other parts in the VA operations? 

Mr. HAGGSTROM. There are. When you start to peel this back if 

you look at it there are certain operations and areas with the administrations who are if you would call super users where all the 

contracting officers are using it and there are other areas where 

they are not. 

And I think that goes back to the point that Mr. Frye was making and Ms. Finn was making, is we are looking at this now, this 

has to be a leadership issue where those mid-level managers and 

those senior managers take accountability for their folks to enforce 

what the Department has issued as policy. 

Mr. DONNELLY. It would seem that if some places are doing really well and some places are not doing well at all and they both 

have the same materials then maybe it is not the materials, maybe 

it is just as you said, a leadership issue of how do we get the same 

skill set that has enabled certain areas to shine, how do we transVerDate Mar 15 2010 07:19 Aug 27, 2011 Jkt 065874 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 I:\WAYS\OUT\65874.XXX GPO1 PsN: 65874

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fer that same skill set to those areas that haven’t, and I hope you 

guys are taking a look at that. 

Mr. HAGGSTROM. We are. In fact certainly one of the primary 

users of this system is the Veterans Health Administration as you 

can well imagine as being the largest administration within the 

Department. 

Mr. Fred Downs, who is the head of contracting activity for the 

administration, has implemented specific metrics that look across 

the operation in VHA at the VISN level to look at the usage of 

eCMS and the reconciliation of any errors that are in eCMS. 

So there is special attention being paid in the administrations on 

the usage of eCMS and how they can improve that usage. 

Mr. DONNELLY. I think one of the things we would be real interested in seeing is if you set up metrics for how to transfer this 

knowledge, this talent, this ability of the places that are doing well 

to the ones that aren’t. Is there a plan? What is that plan? What 

kind of timetable is there for that plan? That kind of thing so that, 

you know, the folks who are steering the ship the right way can 

teach the folks who are going around in circles how to start pointing the ship in the right direction. 

Mr. HAGGSTROM. Absolutely. About 2 years ago we established a 

program management office within Mr. Frye’s organization specifically dedicated to eCMS, and Ms. Harvey, who is the Executive Director of that organization, has user forums of the folks out there 

who actually type it on the keyboard, if you will, to continually get 

feedback from them on what the issues with eCMS are, how we can 

improve the system from a technical stand point, and the priority 

of which these issues are tackled. 

Mr. DONNELLY. Well, thank you very much, I am out of time. 

Thank you, Mr. Chairman, I will yield back. 

Mr. JOHNSON. I thank the gentleman for yielding. The gentleman 

from Tennessee? 

Mr. ROE. Thank you, Mr. Chairman. 

You know, we are here to provide the best services and care for 

veterans, that is the purpose of this VA, and also to watch after 

taxpayers dollars so that those dollars get down to actually providing services for veterans. 

And let me just tell you a little bit of my frustration about this 

morning. I got your testimony here at the 5 minutes till the time 

this Committee started. I sit down the night before and read all of 

these. And I had a book last night that my staff spends time preparing, but there was nothing in here from your group. And I am 

wondering if you were responsible for making sure that all of this 

gets done wouldn’t it be good if we had had this yesterday so I 

could have read your testimony yesterday? And I don’t know why 

you didn’t get it here until 5 minutes till 10:00, but all I heard was 

your testimony. I didn’t have a chance to read it, to analyze it, to 

think of some questions. That is just a comment. 

To Mr. Barrow’s point I want to get to some things that you were 

talking about just a minute ago and how on a cost analysis who 

conducts these cost analyses, and I think that is what eCMS is 

about. How do you make these decisions about whether a new construction site should occur, whether you should renovate one, and 

then how do you follow that construction? How do you follow that 


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money to make sure we are getting it? And I am going to get that 

point second. So how is that down first of all? 

Mr. HAGGSTROM. Mr. Roe, eCMS is not designed to do that. 

eCMS is not a decision-making tool for the construction and facilities management process in terms of determining site locations, in 

terms of—— 

Mr. ROE. Okay, that is fine, then you have answered that question, that is done another way. 

Mr. HAGGSTROM. It is. 

Mr. ROE. But if you have a contract and that is entered then you 

can find out if that contract is being implemented or written properly and followed properly am I right? 

Mr. HAGGSTROM. That is correct. 

Mr. ROE. Okay, then the reason I guess that leads to another 

question I have that is when you were evaluating these things 

there was a project I think out in Denver or some place out west— 

in Denver where a replacement medical facility had been appropriated money in 2004, 2006, 2008, 2009, and 2010 with a total 

cost of a half a billion dollars for 40 beds. 

Well, I just helped at home build a hospital with 120 beds that 

was a fraction of that much money. 

How in the world does something like that happen if there is any 

oversight that I or another Congressman here can go look at? How 

could that ever happen? 

Mr. HAGGSTROM. Congressman, if I may, Denver was a situation 

where the scope was continually changing on that to decide whether or not we were going to have bed towers the example or not 

have bed towers, what size the facility was. 

I would ask Mr. Neary, who is the Acting Director of Construction of Facilities Management to comment on that if I may. 

Mr. ROE. Thank you. 

Mr. NEARY. Thank you, Congressman Roe. 

Mr. JOHNSON. Mr. Neary, would you press your talk button, 

please. 

Mr. NEARY. Thank you, I apologize. 

The Denver facility is not for 40 beds, but it is 184 beds, it also 

includes a very large outpatient component. But you are correct 

that the project was incrementally funded over a period of years. 

And one of the areas that VA has identified as needing improvements is in the early planning of major construction projects and 

looking forward to having a multi-year program plan so that prior 

to our introducing a major construction project in the budget we 

have a better handle on what is to be constructed. 

In the case of Denver, it was originally identified as a project 

that would build a replacement hospital, then a decision was made 

to lease hospital beds from the University of Colorado Hospital and 

only build an outpatient clinic. 

Over time and engaging with stakeholders, it was determined to 

switch back to a full service replacement medical center and that 

is under way now. We have just awarded the first construction contract associated with the building of that facility. 

Mr. ROE. Well let me just, Denver is a 40-bed increase in the 

number of beds they had, and I will just tell you, you would never 

in a million years spend your own money that way. There is no 


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way on this earth that in a private business you could survive that. 

A hospital can’t make that kind of a goofy decision now because of 

the income they have to pay for their debt load, they can’t do it. 

And I think that what we are all getting to here is that we want 

our money, our tax dollars, your tax dollars spent as efficiently as 

we can so that the veterans get the care they need, and to spend 

a half a billion dollars, that is a lot of money on a project. I mean 

we could have spent a lot of that money for Mr. Barrow to have 

an outpatient clinic in his district, you could have had ten of them 

for that much money, or 50 of them. 

And so I guess my frustration is, is that when we are spending 

the taxpayer’s dollars we don’t seem to be looking after them like 

they were our dollars, which they are. 

Mr. NEARY. Well, I believe we are, and we certainly should be, 

it is very important to do that. In the selection of projects going forward the cost analysis is performed in terms of renovation versus 

new construction, construction versus leasing in an effort to make 

sure that the appropriate project is selected to be funded. 

Mr. ROE. Okay. Thank you, I yield back. Will we have a second 

round? 

Mr. JOHNSON. Yes, we will. 

Mr. ROE. Thank you. 

Mr. JOHNSON. Thank you for yielding. Mr. Barrow. 

Mr. BARROW. Thank you, Mr. Chairman. 

Mr. Haggstrom, you heard my questions to Ms. Finn in her capacity as Assistant Inspector General for Audits and Evaluations, 

she doesn’t really get into the area and certainly wasn’t getting 

into this morning the area of deciding what to build and when to 

build it, and she was given sort of an appreciation of what she is 

able to do. 

You, though, as Executive Director of the Office of Acquisition, 

Logistics, and Construction certainly are in a better position to 

help me understand just how it is we decide what to build and 

when to build. 

You are quite right in response to Dr. Roe’s questions, eCMS is 

just sort of like a super duper checklist for what to do when you 

were building something or going to do something. 

My question to you is, help shine a light on the process for deciding when and where are they going to build something like community based outpatient clinic? Tell me how that is done. 

Mr. HAGGSTROM. I will certainly attempt to do that, sir. 

When you look at the process, the process begins with the users 

at the administration level, and in this case for the CBOCs or HCS, 

the major medical centers. So based on the modeling that VHA 

uses they look at the demographics, they look at the future population and things like that in terms of determining what the needs 

are of VHA to serve our veterans. 

Mr. BARROW. At this point it is beginning to sound like you are 

describing the management counterpart of a super duper checklist 

like eCMS. My question is not how you do it, but who does it? 

Mr. HAGGSTROM. As I said the, requirements generation is built 

by the administrations, the user. As we spoke to the full Committee last week on the implement—— 


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Mr. BARROW. But different users don’t establish priority between 

themselves, for example. I am here to tell you that the folks at the 

Charlie Norwood VA in Augusta are all hell bent to get this thing 

done. We were encouraged and told by the folks at the VISN, the 

folks at the Georgia Department of Veteran Services and by the VA 

to poll the constituent community, and we got input as to thousands of families that would benefit from having this. We more 

than met the criteria. 

The question is, when do you decide what order you go in? We 

got one that has come online that wasn’t even started in Georgia 

until after we had already submitted our petition showing 5,000 

people within a 30-mile area of Statesboro ready to participate in 

this with all the benefits they get from this, and we find the one 

in Hinesville, just down the road, is going forward. When we ask 

about Statesboro we are getting a letter that is actually talking 

about what is going on in Hinesville, telling us don’t worry. 

It really bothers me that in urging action in what we have been 

promised for many years that might be interpreted by somebody in 

the VA as saying we are urging support for further progress in 

Hinesville. I mean, I don’t even know if folks know what we are 

talking about when reaching out to the VA to find out what the 

status is. 

So when it comes to issues of competing priorities, scheduling 

things in, putting things in the pipeline to be developed who actually makes that decision? Is it done at the Secretary’s level? 

Mr. HAGGSTROM. It is. It comes up through the governance process in the Department, the Office of Management is responsible 

from a planning and budgeting perspective to take all these requirements and do an integration and a prioritization and then 

make those recommendations to the Secretary in terms of what the 

program would look like in that respective fiscal year. 

Mr. BARROW. Well, we have that. We had actually made that 

much progress, we have gone well beyond that, and we have been 

told that the matter is actually been sitting on the Secretary’s desk 

for quite some time now. What can we do to get something going? 

Mr. HAGGSTROM. Congressman, I wish I could give you a better 

answer. Once that decision is made I can assure you my office 

takes action immediately. If you will, my offices are responsible for 

the execution. And I don’t mean that to sound as an excuse. 

Mr. BARROW. Again, I recognize I am coming to this from another—but you are closer to it than I am. 

Mr. HAGGSTROM. As soon as that decision is made, sir, we action 

it immediately, and in the case of the CBOCs where they are normally a build lease facility, we will implement our leasing process, 

which is a two-step process. Basically first finding the land, and 

then second, finding a developer. 

Mr. BARROW. We have actually gone so far in Statesboro as to 

offer sites that have actually been inspected and evaluated for suitability either for conversion, adapted for use as a CBOC, and otherwise. 

What role do your counterparts in State government, say the Department of Veterans Service in Georgia play in either advocating 

for or serving as a check off on the list of folks to consult? What 

role do they play in advocating for some of us? Anything at all? Do 


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you all listen to the folks in Atlanta, for example, at the Georgia 

State Department of Veterans Service? 

Mr. HAGGSTROM. I am not aware of any formal role that the Veterans Health Administration may use in terms of reaching out to 

various other government agencies. When you look at the major 

medical centers and the operations within VHA, their relationship 

with communities and community’s leaders is usually very good. 

And so that would usually reside at that particularly operational 

level to reach out to the community leaders, talk to them about the 

needs of the community, perhaps discuss with them where an optimum location may be, and even to say is there land that the community might be willing to donate for this particular effort. 

Mr. BARROW. Thank you. Thank you, Mr. Chairman. 

Mr. JOHNSON. Thank you very much. Hold on just a second, we 

are getting a message from Natural Resources. Just to keep everybody posted I will have to go vote at a markup at Natural Resources in about 15 minutes, so we will recess at that point and 

reconvene. 

Go to Mr. McNerney, now. Thank you. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

I had the opportunity to express my frustration at a hearing on 

a different Subcommittee a couple weeks ago about how long it has 

taken to do a project in my district, and it took about 2 years to 

decide what county to put the project in, it took another year, and 

it hasn’t been decided yet what location within the county to put 

the project in. 

Are we going to be continuing to experience that sort of longevity 

and process decision-making in the organization or is there a way 

to speed this thing up? I mean it is very frustrating, we have veterans waiting for service and we have extremely high unemployment. It is a very frustrating situation. 

Mr. HAGGSTROM. I understand your frustration, Congressman. 

When we look at the planning function, which again begins with 

the Veterans Health Administration for our CBOCs, they have a 

very deliberate process in terms of looking at the veterans demographics, where those veterans are located, the proximity to other 

major medical centers where we may have affiliate relationships, 

what the scope of the requirement may be in terms of the size of 

the facility. We look at various things like accessibility, the size of 

the land, transportation issues, the surrounding activities that 

would service that CBOC. All those things are taken into consideration. 

Mr. MCNERNEY. Well, I mean these are all important considerations, granted, but every year of delay adds five to 10 percent to 

the cost of the project, so there has to be a way to speed up this 

process. I don’t know if you have an answer to that, but I am just 

telling you it is going to be something you are going to hear about 

from me until I feel like there is progress made. 

I do have a question regarding to the eCMS system. Now what 

I am hearing is that there is a certain lack of oversight and that 

causes a waste of money maybe through fraud, maybe through mismanagement, I don’t know, but I would like to get from you some 

idea of how much money is actually not being spent effectively as 

a percentage of total expenditures and how that might compare to 


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a similar situation in a private corporation like Ford that might be 

the same size. 

Mr. HAGGSTROM. Congressman, I do not have that number, nor 

do I have an idea on how we may do that. 

I do wish to say though that I do not believe one, that eCMS 

would preclude fraud. Fraud is perpetrated by our vendors or very 

intentional acts of trying to deceive the government. The eCMS will 

not prevent that. 

I do believe when you look at the contracting actions as Ms. Finn 

said, while all the documents may not be resident in eCMS that 

we would like to have in there from a standpoint of be able to do 

data mining, that does not mean that the Department is not getting best value for the contracts that they do let, and that process 

is a very deliberate one in terms of ensuring competition, ensuring 

that the requirements generation adequately describes what our requirements are, and then implementing that contract. 

Mr. MCNERNEY. So are we barking up the wrong tree here by 

singling out eCMS in terms of waste of fraud and abuse? 

I mean some of the questions I am hearing reflect my frustration 

here with the testimony this morning, but I would like to have 

some way to measure what is going on and identify bad players if 

possible, including bad players within the VA. And are there statistical measures, are there quantifiable measures that we can set 

down and ask you to come back with us in a month and say well, 

these are the bad managers, is that something that is possible? 

Mr. HAGGSTROM. We do have a series of metrics in the acquisition community that we look at. One is the usage of eCMS and the 

accuracy of the Federal procurement data system. So we are looking at these performance measures in terms of how the systems are 

being used. 

Mr. MCNERNEY. And that is something that you can bring to this 

community if we ask you too? 

Mr. HAGGSTROM. We can. 

Mr. MCNERNEY. Okay, thank you. 

Mr. ROE [presiding]. I guess we will now go into a second round 

of questioning if that is all right with the panel. 

In the world I lived in when we had a contract as a mayor we 

had an idea we wanted to build a school and we would have an architect, we would define the need in one do you need the school, 

and we would get an architectural firm and we would bid that out, 

we had a bidding process through local or whoever wanted to bid 

on that. We would select the architect, the architect would then design the plan. We then let the contracts and you have an opening 

of a single bid, you would have all the specifications and you would 

do that, and then you would have a project manager that was independent of the construction crew that was doing. And you would 

hold money back and you would evaluate as you were going along. 

That is how I have done a gazillion projects. If it is a road project, 

a school, or even in my own practice a building like that, we did 

a similar process of selecting an architectural firm and so forth. 

Who is in charge of actually doing that? Let us say they are 

going to build a CBOC in his district, heaven forbid maybe it will 

some time happen in your lifetime, but if we are going to do that 


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how is that process and how do you oversee that going along to be 

sure that that money is just right? Who is responsible for that? 

Mr. HAGGSTROM. Certainly. Mr. Roe, the process you described 

that you used in the private sector is very much like the process 

we use in the Federal sector with the exception of very rarely do 

we use sealed bids anymore. 

We are more in line in best value in terms of what the private 

sector brings to us in terms of a proposal and the design of the ultimate facility. 

I would ask Mr. Neary, whose Office of Construction and Facilities Management is responsible for the life cycle of the major construction program to explain to you a very deliberate process that 

we use from the inception to the commissioning of those facilities. 

Mr. ROE. And the second thing, you can answer these at the 

same time, the North American Industry Classification System 

(NAICS) is a standard that you have in picking firms that are 

qualified to do a job. Would you ever pick a firm that didn’t meet 

those qualifications? 

Mr. HAGGSTROM. If I understand you the North American Industry Classification System does not qualify a firm to do the job. All 

that standard represents is the category of services that that particular business offers. It has absolutely no bearing on whether 

they are qualified to perform the job that we are asking them to 

do. 

Mr. ROE. How do you figure that? How do you decide whether 

they are qualified? 

Mr. HAGGSTROM. I would like to have Mr. Neary answer that as 

part of the process we go through in terms of determining best 

value for the ultimate awardee. 

Mr. NEARY. Sure, thank you. 

And Congressman Roe, achieving quality is an extremely important part of our culture, and in each of the steps that you described 

we have a number of mechanisms to bring quality. 

When a decision is made to build a facility we will select an architect. Some time ago back in the 1970’s the Congress fortunately 

allowed Federal agencies to use a quality-based selection process, 

it is called the Brooks Act, so we put out a notice and architectural 

firms who believe they have the credentials to do the design come 

forward, they are rated and ranked by a team of experts, and then 

a short list of those who are competing are interviewed. They are 

asked to describe the quality of their team, who will be on their 

team, what their past experiences have been, the strength of their 

firm, those sorts of things. 

Once selected they are put to work and their work is monitored 

by not only our own staff, but typically a peer review, another architectural firm that we have selected to participate in reviews. 

Their work is reviewed at each of the major milestones in the design process. A design is complete and approved then put out for 

a bid. 

As Mr. Haggstrom said, we utilize a best value selection process 

where we judge the competitors on a combination of quality factors 

and price, their experience, the strength of their team, the quality 

of the individuals, et cetera, the strength of their subcontractors 

that they plan to use. 


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Mr. ROE. So you don’t use a sealed bid. 

Mr. NEARY. We don’t use a sealed bid, no, sir. 

Mr. ROE. Why not? 

Mr. NEARY. It has generally been not only our experience but experience across the industry that if you take into consideration the 

quality of the folks as well as the price you will get a better contractor. 

Mr. ROE. Well, the lowest price doesn’t always get ours either, 

but I think it is a much—any way, that is the process you use. I 

think it is much fairer that way, you get some of the hanky-panky 

out of it potentially with a single bid. 

Mr. NEARY. Okay. Well, as I say, of course we don’t do that presently. 

A contractor is selected for a fixed price contract, they are required to utilize a critical path method tool to document all the 

steps that are taken in executing a project. We monitor the critical 

path—— 

Mr. ROE. Okay, I get it. It is sort of like except for the sealed 

bid it is very similar. But if we are not getting the information in 

there how do you know, how would I know that a process that it 

is being done well? 

And the other two questions I have for you all is if this is mandated to put this data in there why isn’t it being done? 

And second, is there any penalty if you don’t do it? If we are 4 

years into it and we are still not using it—— 

Mr. NEARY. The eCMS system is utilized across the entire VA, 

thousands of contacts. In my organization where we have high dollar value contracts, but right now we are working on about 60 of 

them, we are very good about using eCMS, we put our data into 

eCMS. And so in the case of the major construction program it is 

there. 

Mr. ROE. So it is there in the major construction. So where isn’t 

it there? What the OIG just told us it wasn’t there. 

Mr. HAGGSTROM. Mr. Roe, the problems we encounter are within 

the administrations principally in terms of the multiple contracting 

officers that sit out there at the MISN or VISN network levels that 

are across the VA to ensure the consistency of data accuracy and 

just having them enter data. 

And so that while within CFM it is rigorously used, unfortunately it does not have that rigor across all of VA. 

Mr. ROE. So why? And again, back to the no one has answered 

it, if it is mandated why isn’t it being used? And number two, is 

there a penalty? If you don’t do it, if you just blow it off and don’t 

ever do it what penalty is there? 

Mr. HAGGSTROM. As we said why. I think when you looked at the 

initial operating capability of eCMS there were some technical 

issues. We have addressed those with a technical refresh in terms 

of accelerating the speed that the system responds to you. We have 

increased the functionality in terms of making it easier through 

drop downs and pick lists. So the issue goes back to the leadership. 

Mr. ROE. It is supposed to be up in 2012 I think you said, and 

I heard you say—— 


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Mr. HAGGSTROM. The refresh will be completed this summer and 

the technical interface for the accounting system will be implemented in the first quarter of fiscal year 2012. 

Mr. ROE. Okay. I have no further questions. 

Now, Mr. McNerney. 

Mr. MCNERNEY. Thank you, Mr. Roe. 

So I asked this question of Ms. Finn and she wasn’t in the right 

position to be answering that question. 

Is there a system that is better than eCMS that we should be 

using? I mean, Mr. Frye, you are the one that selected eCMS are 

you not? Is there a better system? Are you working with eCMS to 

make sure it is more user friendly and so on? 

Mr. FRYE. I have worked with a number of contract writing systems. I spent 30 years in the Department of Defense, 20 of those 

working with various contract writing systems. There are pros and 

cons as already stated with each and every system. 

I think eCMS is a very good system. I think when we started, 

when we implemented eCMS, we didn’t turn on all the bells and 

whistles. We are turning those on now and we are training our 

workforce to use the system and I think it is a good system. 

Going back to what Mr. Haggstrom and others have said, it requires leadership. It requires mid- and senior-level managers to ensure their personnel are using the system, it requires senior executives like myself to provide high level oversight and make changes 

where required in personnel if need be, in policies, and in training 

to ensure we use the system. 

Mr. HAGGSTROM. If I could, Mr. Congressman, and also, Mr. Roe, 

you asked about penalties that are incurred. There are no formal 

penalties, if you will, in terms of taking your contracting warrant 

away from you or not allowing to use the system. Obviously that 

would have unintended consequences that would just play out in 

terms of not providing those services. 

What we have done internally within OAL and what I am going 

to bring forward to senior procurement counsel who is a governance process for contracting is in fact to have as part of the contracting officer’s annual performance plan the use and complete use 

of eCMS as mandated by policy, which then would be reviewed at 

the conclusion of that performance period and would be taken into 

that consideration in that employee’s overall rating. 

Mr. MCNERNEY. Well, that is something of a penalty, getting 

fired is another kind of penalty. 

From the OIG testimony, there were 1,500 procurement actions 

in eCMS and 5,800 not in eCMS. I mean that is a fairly low compliance rate. If that was happening in Ford Motor Company people 

would be losing their jobs. 

So all I can say is that you have to do better, and as long as this 

Committee is holding these hearings, you are going to be hearing 

these same questions, so I recommend that you do what is required. 

Mr. ROE. Thank you. One final question and then we will wrap 

this up. And I don’t know what this was even, but is there a thirdparty system called PARAGON? What is that? 


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Mr. HAGGSTROM. If I could, Mr. Roe. PARAGON is a system that 

is used by Mr. Neary’s office and he can comment on the capabilities of that. 

Mr. NEARY. PARAGON is a software system that we utilize presently to track activities with the contractor in terms of request for 

information, change order proposals, a variety of the kinds of 

things that could go on at a construction site. So a data management system that we use. That contract will be running out and 

we are in the midst of getting a new procurement either reselect 

or acquire a replacement. 

Mr. ROE. What is the difference between that and the other system that we are using? Are they parallel systems or why do you 

run two in. 

Mr. NEARY. They are two completely different systems. The PARAGON system tracks entirely different data needed to manage the 

job at the construction site. 

Mr. ROE. So it is a completely different system. 

Mr. NEARY. Yes. 

Mr. ROE. One other thing. I want to get back into contracting a 

little bit. 

Would you all go into a little bit on bundling and contract splitting and how you follow that? 

Mr. HAGGSTROM. Certainly. If I could ask for Mr. Frye to comment on that. We take bundling very seriously as we do contract 

splitting. We put in place the policy and processes to preclude that, 

and Mr. Frye can comment on that. 

Mr. FRYE. Yes, bundling reviews are required at a threshold of $2 million. However, VA implemented a policy whereby our small 

business office do reviews at the $1 million threshold. So we are 

absolutely dedicated to ensuring contract bundling does not occur. 

Our small business office is also required to sign off on VA Form 

2268, which has them concur or non-concur with our procurement 

strategies. So we present to them our procurement actions and 

they approve by their signature the direction we are going. And if 

they disagree with it then we talk and resolve the differences. 

So we get our small business office involved up front and early, 

we hold integrated product teams (IPT) to develop our requirements, and the voting member, a voting member on that IPT is the 

small business offices. 

So they have ample say I believe, and I think if they were here 

today they would say as well, in the process to discourage and to 

avoid contract bundling. 

Mr. ROE. Now, Mr. McNerney, he was here last year. When the 

two of us were here last year we heard some testimony about someone would get a contract and then wouldn’t have the capacity to 

carry it out. They would sublet that contract out to someone else. 

Are you able to follow that with eCMS or any of the oversight that 

you have? And then we found out that some of that work is not 

done properly. So the VA has not only issued a contract to somebody that couldn’t do it, they then subbed it to somebody who 

couldn’t do it. 

Mr. FRYE. Mr. Roe, this is an issue across the government. In 

VA, the way we are addressing this is we have hired a supplier to 

come in and do an independent verification and validation for us. 


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This contract will be put in place this month. We intend to have 

this supplier out in the field doing a continuous survey of contracts 

and subcontracts to make sure we don’t have this situation as you 

just described. 

In other words when a veteran who owns a small business is 

awarded a contract they are required to do 50 percent of the work 

of that contract with the veteran business. It would make little 

sense for them to hand it off to a large business for instance to do 

the work. 

So we want to make sure that we keep our small businesses 

where they are at, and we are also going to be looking at large 

businesses. So if we have large businesses who have come to us 

and said we are going to put an aggressive subcontracting plan in 

place and we are going to give let us say 15 percent of the work 

for small business we are going to be looking at the large businesses too to validate that they have in fact made a reasonable effort to employ 15 percent of small businesses in that work. 

Mr. ROE. Now, there is nothing wrong, I mean, the subcontract 

people do it all the time in a construction project, I mean there is 

nothing wrong with that. You get good quality work and you can 

evaluate that work. 

I guess this will go to Mr. Neary. Back to Denver again, because 

do we have anybody that oversees? Like we would have a project 

manager, a separate third party from the contractor do to that who 

we typically would do that in the city? 

Mr. NEARY. Yes, absolutely. First we have a project manager who 

oversees the entire project who works for my Office of Construction 

Facilities Management, then at the job site when we are ready to 

go into construction we have a team of people that we call resident 

engineers who are at the job site, they are not employed by the contractor, they are employed by the government, and they oversee the 

work, do inspections identify issues if there are issues, respond to 

requests for information from the contractor and that sort of thing. 

Mr. ROE. Any further questions? 

I want to thank all of you for being here today. It has been very 

informative for me and I think for the Committee, and I appreciate 

your testimony, both the OIG and you all, and appreciate you being 

here. 

I would like to have some follow up, and I think probably Mr. 

McNerney would like to have some follow up at some reasonable 

point in time. I realize it can’t happen over night, but to see if you 

are able to implement this to all of the contracts. It has been 4 

years, I think that is a long time. 

Okay. Well, our Chairman would like to ask another question so 

I am going to hold it open and not close the hearing until he gets 

here. He would like to ask a couple more questions before we close 

it out. 

But I do want to thank you for being here and we will follow up. 

I think it is very important that we follow up and find out where 

you stand. Do you have any comments? 

Mr. DONNELLY. No, no comments at this time. 

Mr. ROE. We will just recess until the Chairman returns. 

Mr. HAGGSTROM. Thank you, Congressman. 

[Recess.] 


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Mr. JOHNSON. [Presiding.] This hearing will come to order, and 

I thank the panel for indulging me. I apologize for having to step 

out and I thank the Committee, although it looks like a Committee 

of one now, but I thank my colleagues for indulging as well. 

Mr. Haggstrom, I have a few more questions that I would like 

to get into. 

You mentioned earlier, one of you did, I think it was in your testimony that you have a robust helpdesk system associated with 

eCMS. I am very familiar with helpdesk systems and their capabilities. Could you provide to this Committee a report of the trouble 

tickets and the resolution thereof of those trouble calls since eCMS 

went live? 

Mr. HAGGSTROM. Certainty, Mr. Chairman, we will be happy to 

provide that information. 

[The VA subsequently provided the information, which appears 

on p. 42.] 

Mr. JOHNSON. I would like to see that, and we will anxiously 

await that. 

I want to talk a little bit more, I know you got into a little bit 

before I left, for my benefit tell me what PARAGON is. 

Mr. HAGGSTROM. Certainly, Mr. Chairman. If I could ask Mr. 

Neary to explain that, it is part of the program management system that they use in construction. 

Mr. JOHNSON. Okay. 

Mr. NEARY. Certainly, Mr. Chairman. PARAGON is a software 

tool that we currently use to manage data of activities that take 

place primarily at the individual construction sites recording requests for information from contractors, change order documentation, that sort of thing. 

And so it enables us to track what is in the house, if you will, 

and actions that are being taken, establish deadlines, suspense 

dates for accomplishments, and then we can look across the system 

at that data to look for trends and any other information that 

would be useful in guiding us in moving the program forward. 

Mr. JOHNSON. Okay. If I look at a side-by-side comparison of the 

capabilities that have been advertised for eCMS, eCMS by your testimony is a contract management system. It includes tracking 

project administration, contracting or contract management, establishing and enforcing standard acquisition practices and department-wide policies. 

If I look at PARAGON it says it is for project—track project administration, contracting, and maintaining payment records. When 

did the VA start using PARAGON? 

Mr. NEARY. I would have to check, but I would suspect it was 

7 or 8 years ago. 

Mr. JOHNSON. So PARAGON was in place when eCMS was 

brought on board? 

Mr. NEARY. Yes, sir, I believe it was. 

Mr. JOHNSON. If the VA already had a contract management system that would track the progress of construction projects then 

why was eCMS pursued and why did the taxpayers spend $20 million on it? 

Mr. HAGGSTROM. Well, I think if you look at the two systems— 

they are very different, Congressman. 


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One is very focused on construction, management of a critical 

path method, management of what takes place throughout the life 

cycle of a brick and mortar facility. 

The eCMS it was built to not only take care of that in a general 

contract sense, but there are also commodities and service contracts that we put in place, that there was absolutely no system 

other than the back of the pad, if you will, to keep track of that. 

What this system did, is then take into account all the rest of 

the contracting actions that the Department had to work with. 

Mr. JOHNSON. Now we know that PARAGON is being used and 

that the data that is being placed in PARAGON is being cross-referenced to eCMS. I am just sort of confused. Well, first of all, how 

much did PARAGON cost? 

Mr. NEARY. I would have to find that out and submit it for the 

record, sir. 

[The VA subsequently provided the information, which appears 

on p. 47.] 

Mr. JOHNSON. Okay. How much training goes into the use of 

PARAGON? 

Mr. NEARY. We provide training for all—it is used primarily by 

our resident engineers at job sites, and so any new resident engineer who comes into our organization we would provide them initial training, and then we provide periodic training, refresher training over time to everybody that is involved in the program. 

Mr. JOHNSON. Does PARAGON fall under the same oversight 

mandate that eCMS does? Has PARAGON been mandated as a required data system? 

Mr. NEARY. Yes, it has. 

Mr. JOHNSON. How much training goes into eCMS? Do you have 

a formal training program for that? 

Mr. HAGGSTROM. We do, Mr. Chairman. The VA Acquisition 

Academy has a formal training system where our new contracting 

officers attend a 4-day course on a scheduled curriculum. We also 

provide field training in traveling teams if the administrations ask 

for that. And the Committee has asked for those training materials 

to be submitted for the record and we will do so. 

[The VA subsequently provided the information, which appears 

on p. 55.] 

Mr. JOHNSON. Okay. When did the training program for eCMS 

start? 

Mr. HAGGSTROM. The training program for eCMS started at the 

inception of eCMS being brought on in terms of being able to provide those end users, if you will, the skills necessary. So it began 

back in the 2007 timeframe when we started to mandate eCMS as 

the system for the contracting officers. 

Mr. JOHNSON. Do you consider it an effective training program? 

Mr. HAGGSTROM. I believe it has improved much. When you look 

at our users in terms of the survey, you are going to see mixed reactions to it. Some say it was very effective, some say it was very 

confusing, some say that they weren’t trained on certain modules. 

We take those surveys and we bring them back and we ensure 

that we close those gaps in our training and we provide new training. That survey, I believe, was now done in 2008 or so, so it is 

a little long in the tooth, if you will, I think in terms of gauging 


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the reaction from the users in terms of the quality of the training 

we are providing. 

Mr. JOHNSON. Okay. How do you account for the fact that data 

is being entered into eCMS not at the beginning of a contract, but 

later? Sort of as a second thought. 

Mr. HAGGSTROM. I think that goes back to some of the issues 

that the contracting officers have brought forth in terms of the 

functionality of the system, the response time, but I would ask Mr. 

Frye, if I could, to continue to comment the work. 

Mr. FRYE. Mr. Johnson, there is a very simple answer to this 

one. For the most part, data is being entered subsequent to contracts being let is from old legacy contracts. We have made an attempt to put contracts that are still under way that were awarded 

prior to the advent of our contract writing system into that system. 

So I think by in large that is the data that is being entered after 

the contracts are let. 

Mr. JOHNSON. Mr. Frye, something doesn’t match here. According to the VA testimony prior to us and the information that we 

have, 83 percent of the data that is supposed to be in eCMS is not 

in there. Are you telling me that only 17 percent of the data is new 

contracts and that 83 percent is old data? Because something is not 

jiving with what you are saying now. 

Mr. FRYE. No, what I am telling you is when the contracting officers—and again, I wasn’t out to look at the contracts—but from 

what I gather the contracting officers have entered some of the 

data, but not all of the data. 

In other words, they took a paper file and transported the paper 

into electrons, into the contract writing system so this would become part of your data base. The contract was never developed 

using the contract writing system because the contract writing system wasn’t in place in 2005 or 2006. 

Now most of our contracts are put in place with a 1-year base 

and four 1-year options. So if it was a contract that was put in 

place some years ago it wouldn’t have been put into the contract 

writing system. 

Mr. JOHNSON. So it is your assertion then that 100 percent of 

current construction contracts are being entered into eCMS at the 

beginning of the project? 

Mr. FRYE. I can’t comment on construction progress, I would 

yield to Mr. Neary since he runs the construction program. 

Mr. NEARY. With respect to the VA’s major construction program, 

what I am responsible for 99.9 percent, yes, are entered in at the 

outset. We award all of our contracts utilizing the eCMS system. 

Mr. JOHNSON. Interesting. 

Changing gears just a bit. According to VA Acquisition Regulation 801.603–70, a resident engineer is not allowed to make a commitment that will affect the price, quantity, quality, or delivery of 

a contract. Is that correct? 

Mr. NEARY. Well, an individual who has to be a warranted contracting officer to make those types of commitments—— 

Mr. JOHNSON. But a resident engineer is not a contracting officer, doesn’t hold a warrant, correct? 

Mr. NEARY. At each of our sites, the senior resident engineer 

would hold a warrant, limited I believe it is to $100,000. 


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Mr. JOHNSON. Okay. Likewise, a contracting officer acting within 

his or her warranted contracting authority must authorize any 

change to a contract. Is that correct? 

Mr. NEARY. That is correct. 

Mr. JOHNSON. And you are telling me that resident engineers— 

you have resident engineers that are both contracting officers and 

resident engineers? 

Mr. NEARY. That is correct. Limited authority primarily intended 

to address events that arise, situations that arise at the job site 

where the contractor needs to be given direction. You might have 

plumbing lines that conflict, something that wasn’t picked up on 

the drawing, those sorts of things. 

Mr. JOHNSON. To your knowledge do you have resident engineers 

then that are not contracting officers that are making decisions regarding the price, quantity, quality, or delivery of a contract? 

Mr. NEARY. I am not aware of any situation where a non-warranted resident engineer is making those decisions. That should 

not be happening, no. 

Mr. JOHNSON. Okay. Well, seeing as no other Committee Members apparently have any questions I would again thank you gentlemen for being here today. Let me get back here. And I thank you 

for your time and your testimony and you are now excused. 

I ask unanimous consent of all present that all members have 5 

legislative days to revise and extend their remarks and exclude extraneous materials, and without objection, it is so ordered. 

I want to thank all of the Members of the Committee and witnesses for their participation today in this hearing, and the hearing 

is now adjourned. 

Mr. HAGGSTROM. Thank you, Mr. Chairman. 

[Whereupon, at 12:05 p.m., the Subcommittee was adjourned.] 


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A P P E N D I X 

Prepared Statement of Hon. Bill Johnson, Chairman, 

Subcommittee on Oversight and Investigations 

Good morning. This hearing will come to order. 

I want to welcome everyone to today’s hearing on ‘‘Inspect What You Expect: Construction Contracting Practices at VA.’’ 

I would also like to apologize in advance that I may have to leave early for a 

mark-up at the Natural Resources Committee taking place this morning. I know 

that some other Members of this Subcommittee may also be affected by the markup, and we will get through the hearing as best we can or recess if necessary. 

In a department the size of VA, the contracting process involves billions of dollars 

annually. These funds are necessary to ensure those who so bravely served this 

country are provided the care and benefits they have earned. 

However, problems arise when the contracting process is mismanaged, and poorly 

executed contracting on the scale of billions of dollars—such as what we see at VA— 

can mean billions of dollars wasted, taxpayer dollars that were supposed to help the 

veteran. 

A contracting process done correctly can actually help an organization save money 

in the long run. Good contracting on a construction project entails having an independent cost analysis of all available options, eliminating preferential treatment, 

and executing a timely process that results in a product delivered in a timely fashion at the correct cost. 

VA has acknowledged it could improve the quality of its contracting process 

through use of the Electronic Contract Management System, or ‘‘eCMS.’’ In June of 

2007, an Information Letter was issued by VA’s Executive Director of the Office of 

Acquisition and Logistics mandating the use of eCMS. This database would record 

and track procurement actions of over $25,000, and the data could then be easily 

and comprehensively reviewed to determine the effectiveness of VA’s contracting 

processes and make changes where necessary. Cost overruns could be identified and 

addressed early on, and perhaps even prevented in the first place. 

This sensible approach to overseeing the contracting process could prevent wasted 

funding, potential fraud, and reduce overall contract mismanagement. For some reason, despite its mandated usage, many supervisors and managers across VA chose 

to ignore eCMS, instead allowing the contracting system and runaway associated 

costs to continue as before. 

VA’s Office of Inspector General found clear cases of missing and incomplete information, and in one test discovered that 83 percent of the transactions that should 

have gone into eCMS were left out. Examples such as this dilute the value of eCMS 

as an accountability measure, and in the end veterans and taxpayers bear the loss. 

While VA acknowledged the OIG’s findings and concurred with recommendations for 

improvement, it is my wish to see concrete evidence of that improvement. 

Reports of other clear cases of contract mismanagement are equally disturbing, 

including bundling contracts as well as splitting contracts, as substantiated by the 

Deputy Assistant Secretary for Acquisition and Logistics nearly a year ago. 

As these contracts are mishandled, needed construction is slowed considerably 

and the needed services that a new medical facility would provide are further delayed. Again, those who are hurt most by this are the veterans. 

If we are to get this right, there must be decisive leadership in contracting and 

accountability for actions at all levels. If eCMS was mandated by VA’s leadership 

to be used, why then is it obviously not being used? If contracts on a construction 

project are intended for veteran-owned small businesses, why would a large business be competing for them? If plans are put in place for an expanded outpatient 

clinic, why then would the size and scope of that project change, not once, but twice? 

It is past time for these billions of construction contracting dollars to be used effectively, efficiently, and in a timely fashion so the veterans who need the services 

provided by these facilities can access them. 


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I appreciate everyone’s attendance at this hearing and I now yield the Ranking 

Member for an opening statement. 

f 

Prepared Statement of Hon. Joe Donnelly, Ranking Democratic 

Member, Subcommittee on Oversight and Investigations 

I would like to welcome everyone today, as we have the opportunity to conduct 

the Subcommittee on Oversight and Investigations (O&I) first hearing of the 112th 

Congress. I am honored to serve as the Ranking Member and look forward to working with Chairman Johnson and other Members on both sides of the aisle. Prior to 

today’s hearing we had the opportunity to meet and discuss the O&I agenda for the 

upcoming year and from our discussions I know we have a full agenda, and one we 

are both committed to working in a bipartisan manner as we seek to provide the 

oversight our Nation’s veterans rightly deserve. 

Today’s hearing is an example of our bipartisan work. The VA procurement efforts 

and initiatives have been problematic and controversial at times. It is important 

that we make certain the VA is doing their due diligence prior to awarding a contract. There are many steps the VA must take in between initiating procurement 

project proposals and post-awards. Today, we hope the VA will assure us that construction projects are fully reviewed to ensure successful delivery and management. 

It seems to me that there have been too many VA Office of Inspector General reports indicating VA’s lack of contract details. Furthermore, unrealistic and unreasonable acquisition plans have led to escalated contract costs and unmet contractor 

milestones. One of my concerns is, how many times does my staff need to meet with 

the VA only to find out that after millions of dollars have been spent on a contract 

the contractor walks away with these funds after the VA cancels their contracts due 

to unmet deliverables. This is an indication of poorly reviewed and administered 

contracts. 

Furthermore, since the 110th Congress the Committee has been providing oversight on contract bundling. I am familiar with these issues, having been a Member 

of the Committee on Veterans Affairs since the 110th Congress and participated in 

various hearings on this topic. Contract bundling by Contracting Officers should be 

reviewed carefully as well. Whether it may be awarding contracts or set-aside initiatives for veteran owned small businesses, bundled contracts create opportunities for 

fraud and mismanagement. I will be particularly interested in the implementation 

of the VA’s Electronic Contract Management System (eCMS). 

f 

Prepared Statement of Hon. John Barrow 

Thank you Chairman Johnson and Ranking Member Donnelly for holding this 

hearing. In order to fulfill our promises to veterans we need a productive and efficient Community Based Outreach Clinic construction planning process at VA. 

In order to build the infrastructure our veterans need for the health care and 

services we promised them VA needs to fix their broken construction process. Fixing 

the contract practices at VA is a good place to begin fixing the construction process. 

If done correctly, this will increase transparency and get VA’s construction process 

on the right track. Increasing transparency is particularly important to me and veterans in my district. 

For 2 years my office and my constituents have sought information regarding the 

status of construction for a CBOC to be built in Statesboro. The Statesboro area already has a large population of underserved veterans that VA predicts will increase 

by 5 percent in each of the next 3 years. Currently, this growing population of Veterans is forced to drive over an hour, either to Dublin or Savannah, to receive the 

primary care and mental health treatment they need. 

Over this 2 year period my office and veterans from Statesboro have contacted 

the VISN in Atlanta and the Department of Veterans Affairs in DC. But we have 

only received conflicting and incomplete information from VA about where this 

project is in the approval process. 

I thank the panelists for coming to testify before this Committee today. Hopefully, 

by examining the business practices of VA we can learn about specific deficiencies 

in VA’s construction planning system. I want to identify pragmatic solutions to 

make the VA construction planning process more efficient and transparent, so that 

clear cut cases like the Statesboro CBOC can gain swift approval and serve our Veterans faster. f 


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Prepared Statement of Belinda J. Finn, Assistant Inspector 

General for Audits and Evaluations, Office of Inspector General, 

U.S. Department of Veterans Affairs 

EXECUTIVE SUMMARY 

Procurement continues to be one of VA’s major management challenges. Since 

2003, the Office of Inspector General (OIG) has reported that VA still has much 

work to do to leverage its purchasing power for acquiring goods and services. We 

have consistently reported on the need for increased management visibility and 

transparency to manage acquisitions nationwide, make good procurement decisions, 

and to address the reliability and completeness of the information VA relies upon 

to make acquisition decisions. 

VA has mandated the use of the Electronic Contract Management System (eCMS). 

The eCMS system can reduce costs, integrate and standardize procurement processes, reduce workload, and improve communications. Additionally, the system provides the functionality to create management reports and improve the capability of 

consolidating requirements to support strategic sourcing and acquisition decisions. 

Unfortunately, we continue to see low levels of compliance associated with VA Contracting staff using this system and when the system is used, the information in 

the system is incomplete. VA cannot rely on the information in eCMS to determine 

the total number of procurements accurately or the total estimated value of these 

procurements when information in the system is incomplete. Reports generated 

through eCMS are incomplete and cannot be relied upon when making management 

decisions. Until VA enforces compliance for the mandatory use of eCMS, VA cannot 

benefit from the full capabilities of the system. 

Ongoing audit work at the VA’s National Acquisition Center (NAC), VA’s largest 

contracting activity and a major organizational component reporting directly to the 

Office of Acquisition, Logistics, and Construction (OALC) continues to identify problems in the use of eCMS to develop and maintain national contracts. Without senior 

leadership’s attention focused on ensuring eCMS usage and capturing VA procurement information in a reliable central database, VA will not achieve the improvement needed in acquisition service delivery from an enterprise-wide perspective. 

A follow-up audit on VA’s construction program found that VA had established a 

Quality Assurance (QA) program and procedures to resolve previously reported 

problems. We reported that the QA program needed written policies, procedures, 

performance measures, and a staffing plan to ensure it met its responsibilities. Additionally, the QA program could not oversee contract schedule slippage because it 

was focused on performing field acquisition reviews. The OALC Executive Director 

agreed with our findings and planned to implement corrective actions. 

Other OIG components have performed work related to VA construction contracts 

including our Office of Contract Review which recently began conducting pre-award 

reviews of claims related to construction contracts. Our Office of Investigations annually briefs 14,000 VA employees on fraud indicators, and has assigned a criminal 

investigator liaison to each VA facility with construction contracts valued at $10 

million or more. 

Mr. Chairman and Members of the Subcommittee, thank you for this opportunity 

to testify on the findings of the Office of Inspector General (OIG) related to the Department of Veterans Affairs (VA) procurement processes. I am accompanied today 

by Cherie Palmer, Director, Chicago Office of Audits and Evaluations. 

Background 

Procurement continues to be one of VA’s major management challenges. Our oversight of VA’s procurement activities including information systems and the Construction Program is performed through audits and reviews. Since 2003, we have 

reported that VA still has much work to do to leverage its purchasing power acquiring goods and services. We have consistently reported on the need for increased 

management visibility and transparency to manage acquisitions nationwide, make 

good procurement decisions, and to address the reliability and completeness of the 

information VA relies upon to make acquisition decisions. 

VA has one of the largest procurement programs in the Federal Government with 

annual expenditures of more than $10.3 billion for supplies and services, including 

construction. Drugs, medical supplies and equipment, automated data processing 

equipment and services, and other critical patient care items must be procured and 


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distributed to VA’s health care facilities that comprise the largest health care delivery system in the country. The Office of Acquisition and Logistics (OAL) is responsible to the VA Secretary for providing goods and services to support the mission 

of VA through the Executive Director, Office of Acquisition, Logistics, and Construction (OALC). 

The OALC Executive Director implemented VA’s Electronic Contract Management 

System (eCMS) as the single mechanism for generating and managing procurement 

actions. OALC issued Information Letter 049–07–06, dated June 15, 2007, implementing and mandating the use of eCMS. The eCMS provides a centralized database for procurement actions and replaces a primarily manual and paper-based contract management operation used throughout VA. Using a web-based platform, it 

was designed to provide a fully integrated electronic acquisition platform that includes the seamless flow of information and data from all stakeholders and systems 

from initial requisitioning through closeout. The benefits of the system included the 

ability to reduce costs, integrate and standardize procurement processes, reduce 

workload, and improve communications. Additionally, the system provides the 

functionality to create management reports and improve the capability of consolidating requirements to support strategic sourcing and acquisition decisions. Unfortunately, we continue to see low levels of compliance associated with contracting 

staff using this mandated system and when the system is used, the information in 

the system is often incomplete. 

OIG Audit Results on eCMS 

In July 2009, we issued Audit of VA Electronic Contract Management System (Report Number 08–00921–181, published July 30, 2009). Specifically, we examined 

whether information in eCMS enables VA to use the system as a comprehensive 

management tool to improve its procurement processes and information. We found 

that eCMS was not used effectively and procurement information in eCMS was incomplete. Management did not ensure the required use of eCMS and there was no 

oversight program to monitor staff compliance with Information Letter (IL) 049–07– 

06. We reported that VA cannot achieve the expected benefit of eCMS, including the 

ability to integrate and standardize procurement processes, reduce workload, and 

improve communication without complete information. VA cannot rely on eCMS to 

determine the total number of procurements accurately or the total estimated value 

of these procurements when information in the system is incomplete. 

During our audit, we compared just over 6,700 procurement actions valued at 

about $1.7 billion in VA’s Integrated Funds Distribution, Control Point Activity, Accounting and Procurement (IFCAP) system to information in eCMS. We found that 

just over 1,150 (17 percent) of the procurement actions (valued at about $319 million) were recorded in eCMS, while the remaining, nearly 5,600 (83 percent) of actions (valued at about $1.4 billion) were not. 

We also compared 1,450 awarded procurement actions from the General Services 

Administration Federal Procurement Data System-Next Generation (FPDS–NG) and 

found just over 700 (49 percent), valued at about $1.4 billion, were recorded in 

eCMS and nearly 300 (21 percent) of 1,450 procurement actions, valued at about 

$91 million, were only partially completed in eCMS. Information on nearly 450 (30 

percent) of 1,450 procurement actions (valued at about $234.7 million) were not recorded in eCMS. Therefore, we concluded that the reports generated by eCMS were 

unreliable and could not be used when making management decisions. 

To better understand why VA contracting staff were not effectively leveraging the 

use of eCMS, we conducted a survey of eCMS users. Responses to our survey indicated staff needed additional training to fully understand and comprehensively use 

the capability of eCMS. Twenty-two percent of the respondents considered the quality of training provided inadequate. Also, management and staff told us the system 

is cumbersome and takes too much time to process procurement actions. 

We also found the Information Letter provided unclear guidance pertaining to the 

types of procurements that are required to be recorded in eCMS and does not ensure 

consistency and compliance across all VA business lines that could potentially be 

misinterpreted. Finally, we reported that award data for contracts in eCMS does not 

electronically transfer to IFCAP resulting in a duplication of input effort for procurement staff. We recommended integrating eCMS with IFCAP to provide VA with 

improved acquisition efficiency and reporting. In total, we made eight recommendations of which three remain unimplemented (or ‘‘open’’) today; these open recommendations include implementing a VA-wide eCMS policy; establishing a plan to 

evaluate the technical performance of eCMS; and integrating eCMS with IFCAP. 

In subsequent audit work and as VA focused on deploying funds for the American 

Recovery and Reinvestment Act of 2009 (ARRA), we focused on how well VA monVerDate Mar 15 2010 07:19 Aug 27, 2011 Jkt 065874 PO 00000 Frm 00040 Fmt 6604 Sfmt 6621 I:\WAYS\OUT\65874.XXX GPO1 PsN: 65874

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itored the process for awarding ARRA non-recurring maintenance contract awards. 

To accomplish this work, auditors attempted to review related procurement information in eCMS. On February 18, 2009, OMB issued Memorandum M–09–10, the initial Government-wide guidance for Recovery Act programs and activities. On March 

17, 2009, OALC issued IL001AL–09–07, ‘‘Implementing Guidance for Contracting 

Awards under American Recovery and Reinvestment Act of 2009’’, which states that 

‘‘without exception all Recovery Act contracts regardless of dollar value, must be 

generated in eCMS’’. 

On March 15, 2010, we published the American Recovery and Reinvestment Act 

Oversight Advisory Report—Non-Recurring Maintenance Contract Award Monitoring 

Processes (Report Number 09–01814–97). We found eCMS data reliability and system problems were continuing to inhibit OALC’s ability to effectively monitor Recovery Act procurements and to ensure non-recurring maintenance contract awards 

met Recovery Act requirements and accountability, efficiency, and transparency objectives. Our audit showed that OALC needed to work with Veteran Health Administration (VHA) contracting officers to promote uniformity in the usage of eCMS, improve the completeness and accuracy of eCMS data, and increase awareness of 

eCMS system problems that affect the reliability of eCMS information. 

During work on our national Audit of Oversight of Patient Transportation Contracts (Report Number 09–01958–155 published, May 17, 2010), we found that VHA 

missed opportunities to solicit new competitive contracts and make contract awards. 

While performing audit work we experienced significant challenges in obtaining a 

complete universe of contracts due to the incomplete data in eCMS. Because VA 

lacked a system-wide inventory of contracts, we developed a technique to use the 

FPDS–NG system information to identify patient transportation contracts by using 

the product service code. We reported that Veterans Integrated Service Network 

contract managers did not provide the oversight to ensure that new solicitations 

were timely to avoid granting extensions in order to prevent a lapse of service. Further, contracts were extended that circumvented the Federal Acquisition Regulation 

(FAR) instead of ensuring full and open competition. These conditions clearly inhibit 

VA from obtaining the best price and or value for the goods and services being acquired. According to the Director of VA’s eCMS Project, the milestone function capabilities in eCMS should be used to monitor and plan for contracts that are due to 

expire. Utilizing this function will help ensure timely follow-up on procurement actions. VA officials recognized that it is important to establish milestones within 

eCMS to provide increased management visibility and oversight, but information 

supporting some contracting actions was missing. 

In a review of the National Cemetery Administration (NCA) we assessed how well 

NCA implemented effective policies and procedures to ensure accountability and 

transparency for $50 million in ARRA funds. We published Review of the Management of Recovery Act Funds for Monument and Memorial Repairs (Report Number 

09–01814–263), on September 30, 2010. We again found and reported that NCA did 

not ensure complete procurement information on ARRA-funded projects was recorded in eCMS. 

Our results showed non-compliance with the requirement that all contracts, regardless of dollar value, must be recorded in eCMS. As a result, we concluded VA 

lacks effective management and oversight controls needed to monitor national contract awards. For this project, we reviewed 36 of the 56 ARRA projects (obligated 

as of July 10, 2009) and identified 34 equipment and national shrine repair projects 

valued at $2.5 million that did not have the required procurement information, such 

as acquisition plans, contracts, purchases orders, price quotes, and price analysis recorded in eCMS. 

We are currently conducting an audit at VA’s National Acquisition Center 

(NAC)—VA’s largest contracting activity and a major organizational component reporting directly to OALC. Again, we have concerns that eCMS is not fully utilized 

to develop and maintain national contracts and related files at the NAC. Although 

OALC mandated eCMS usage, it did not adequately ensure the required use of 

eCMS by providing the oversight needed to monitor eCMS compliance at the NAC. 

We are reviewing 30 national contracts with a total estimated value of $2.4 billion. 

Our preliminary results show that contract information was not in eCMS for a number of contracts. These contracts included acquisitions for high cost technical medical equipment, such as magnetic resonance imaging, radiation therapy, diagnostic 

ultrasound, and nuclear imaging. Further, while our preliminary review of hard 

copy contract files shows that contract development and award actions were generally in accordance with Federal and VA Acquisition Regulations, but documentation was missing in eCMS. For example, eCMS information did not include the solicitations, price negotiation memorandums, and awarded signed contracts for all 

national contracts. 


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1 At the time OIG issued its 2005 report, VHA’s Office of Facilities Management (FM) was 

responsible for managing all major construction projects. In February 2007, FM was reorganized 

and realigned to the Office of the Secretary as the new Office of Construction and Facilities 

Management (CFM) under the direction of the Deputy Secretary. In October 2008, VA estabWe also learned that the NAC utilizes its own Contract Management (CM) system 

and requires NAC contracting officers to enter and maintain data into this system 

in addition to eCMS. This is because the other Government agencies that purchase 

from the NAC’s national contracts cannot access the contract information available 

in eCMS. The CM system also provides an Internet electronic catalog function that 

allows non-VA customers to access NAC contract data. According to the NAC Executive Director, neither the CM system nor eCMS offers a complete acquisition solution; therefore, both systems are needed. 

Reports generated from eCMS, such as the Procurement Action Lead Time, cannot 

be relied upon when making procurement decisions because the information in 

eCMS is either missing or incomplete. In addition, reliance upon two incompatible 

systems creates a duplication of effort resulting in an inefficient use of time and resources. OALC is developing an upgrade to eCMS that includes integrating the functions available in the CM system into eCMS and making the eCMS contract data 

available to its non-VA customers. The upgrade has been delayed from its initial 

September 2010 completion date until August 2011. OALC provided limited oversight to monitor eCMS compliance and ensure eCMS system capabilities adequately 

support NAC operations. Without senior leadership’s attention focused on ensuring 

eCMS usage and capturing VA procurement information in a reliable central database, VA will not achieve the improvement needed in acquisition service from an 

enterprise-wide perspective. 

We have reported significant lapses in VA contracting staff leveraging the use of 

eCMS since 2009. VA’s own internal auditors have also reported on how information 

is incomplete in the eCMS system. For example, the Acquisition Assessment of the 

NAC published July 20, 2010, performed by contractors supporting VA’s Office of 

Business Oversight in accordance with the Office of Management and Budget’s Circular A–123, found that NAC staff were not consistently using eCMS to document 

contract actions as required. The NAC cannot achieve the expected benefits of eCMS 

without complete documents and files related to each procurement action being entered into the system. 

In spite of numerous OIG reports citing deficiencies in the use of eCMS, VA still 

needs to improve compliance and use of this mandatory system to better leverage 

VA’s buying power. Since our reviews, VA has moved forward with the testing for 

integration of eCMS and IFCAP to ensure that technical performance of eCMS improves. VA has acknowledged that it cannot fully realize the benefits of eCMS without ensuring that the tool performs to technical specifications, that staff receive the 

necessary training, and that eCMS properly integrates with existing and planned 

financial systems. However, in spite of this acknowledgement, several of our recommendations remain unimplemented and we continue to find a lack of compliance, 

accountability, and transparency with eCMS in our audit work. 

OIG Audits on VA’s Construction Program 

In FY 2009, we performed a follow-up audit to determine whether VA implemented the corrective action plans in response to recommendations made in our 

Audit of Veterans Health Administration Major Construction Contract Award and 

Administration Process (Report Number 02–02181–79, February 8, 2005). Our 2005 

report included 12 recommendations that addressed needed improvements in contract award, administration, and project management. At that time, the Under Secretary for Health concurred with the 2005 report recommendations and provided 

corrective action plans. 

We reported that VA had strengthened management control and oversight of the 

major construction contracting process with the implementation of 10 of the 12 recommendations from the OIG’s 2005 report. Specifically, we found that VA had addressed 10 of the 12 recommendations through the establishment of a Quality Assurance (QA) program and procedures to resolve significant differences between bid 

prices and Architecture and Engineering (A/E) estimates. 

VA established the QA Service to oversee VA’s major construction contracts and 

ensure the contracts complied with Federal and VA acquisition regulations and VA 

policies and procedures. However, we reported that VA had no assurance that the 

QA Service is effectively monitoring major construction contracts because it had no 

written policies, procedures, and performance measures. Further, the QA Service 

did not have a staffing plan to ensure it met all of its QA program responsibilities.1


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lished the Office of Acquisition, Logistics, and Construction (OALC), which now includes CFM. 

The new office is headed by the Executive Director reporting to the Deputy Secretary. 

VA did not however, fully implement the 2005 report recommendations to implement more effective project management oversight to manage and reduce contract 

schedule slippage from a national perspective. In response to the 2005 report recommendation, VHA advised that the new QA Service oversight function would review the existing process for assessing contract slippage and the method by which 

feedback is provided to the field. However, we found that QA had not performed 

these assessments or provided oversight of contract schedule slippage because its efforts were focused on performing field acquisition reviews of construction contracts. 

This lack of oversight could result in significant contract slippage and increased construction costs. In addition, VA did not fully implement the 2005 report recommendation to establish an effective program to ensure the timely close out of 

major construction contracts and identify unused funds that could be returned to 

the construction reserve account. 

In our follow-up report, we offered recommendations to the Executive Director for 

OALC to implement an effective mechanism to monitor contract schedule slippage 

and minimize construction contract delays and to establish an effective mechanism 

to ensure the timely close out of major construction contracts. We also recommended 

the Executive Director develop written QA policies and procedures, program performance measures addressing all QA Service areas of responsibilities, and a formal 

staffing plan to ensure all QA Service responsibilities are met. The Executive Director for OALC agreed with our findings and recommendations and provided plans to 

implement acceptable corrective actions. We will continue to assess the effectiveness 

of VA’s construction program in future work. 

Other OIG Work Related to VA Construction Contracts 

Office of Contract Review—In FY 2011, our Office of Contract Review began conducting pre-award reviews of claims related to construction contracts. We do not yet 

have sufficient data upon which to base an opinion on the significance of performance issues impacting VA construction activities from a national perspective. Once 

we have completed a sufficient number of reviews, we will offer the Subcommittee 

a briefing on our findings and conclusions. 

Crime Awareness Briefings—In order to help deter crime, OIG criminal investigators provide approximately 200 crime awareness briefings each fiscal year to about 

14,000 employees at VA facilities nationwide. These briefings are intended to ensure 

the attendees are aware of the many types of fraud and criminal activity that can 

victimize VA, VA employees, and veterans. These briefings have resulted in additional referrals of alleged criminal activity and have enhanced our partnership with 

VA Police in helping provide a safe and secure environment for veteran patients and 

employees. 

Criminal Investigator Liaisons—Criminal investigators are assigned to VA facilities with contracts having a value of $10 million or more, to serve in a liaison capacity sharing information with contracting officers, contracting officer’s technical representatives, program managers, and prime and sub-contractor staff to deter, detect, 

and investigate potential construction fraud. 

VA Acquisition Academy—In concert with the Department of Justice Antitrust Division, the Counselor to the Inspector General and OIG investigators provide instruction to VA contracting officers and interns at the VA Acquisition Academy in 

Frederick, MD. The training covers the OIG’s role, criminal conduct relating to procurement, audit issues relating to procurement, and how to avoid or prevail in disputes. 

Procurement Fraud Task Forces—The OIG regularly participates in regional and 

national procurement fraud meetings and conferences to learn of effective programs 

and strategies to address procurement fraud Government-wide. In anticipation of 

fraud in connection with Recovery Act projects, we arranged for the Department of 

Justice’s Antitrust Division to provide to VA’s Deputy Assistant Secretary for Acquisition and Materiel Management and his staff. 

Conclusion 

While VA has recognized deficiencies in its acquisition processes and infrastructure, they have yet to exercise sufficient organizational discipline to ensure that its 

primary management oversight tool provides the needed transparency to manage a 

multi-billion dollar acquisition program. We believe VA should continue its efforts 


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to leverage the full capacity of eCMS and integrate it into existing and future financial systems. 

Mr. Chairman, this concludes my statement. We would be pleased to answer any 

questions that you or other Members of the Subcommittee may have on these 

issues. 

f 

Prepared Statement of Glenn D. Haggstrom, Executive Director, 

Office of Acquisition, Logistics, and Construction, U.S. Department 

of Veterans Affairs 

Chairman Johnson, Ranking Member Donnelly, and distinguished Members of the 

Committee, thank you for the opportunity to appear before you today to discuss the 

Department of Veterans Affairs (VA) acquisition, logistics, and facilities management, operations. It is a privilege for me to represent the many dedicated and hardworking professionals who provide mission-critical support everyday to ensure necessary contracts, logistics support, and facilities are available for some of our Nation’s most extraordinary citizens, Veterans. I am accompanied here today by Mr. 

Jan Frye, VA’s Deputy Assistant Secretary for Acquisition and Logistics (OAL) and 

the Department’s Senior Procurement Executive, Mr. Robert Neary, Acting Director 

for Construction and Facilities Management (CFM) and Mr. Jim Sullivan, Director 

Office of Asset Enterprise Management. 

The Office of Acquisition, Logistics and Construction (OALC) was formed in October of 2008 to support the acquisition, logistics, and construction needs of the Department of Veterans Affairs (VA). These organizations were brought together to 

provide an enterprise approach to policy, process, and systems necessary to support 

these similar functions resident in each of the VA administrations. The core responsibilities and an integrated acquisition model were affirmed by the Secretary on 

April 2010. Together, these structural and process changes will enable the Department to serve our internal customers’ needs and ultimately our Veterans in a more 

efficient manner. 

OALC has six fundamental roles in the operation of the Department: achieve clear 

ownership and accountability of the VA contracting mission; gain control over acquisition and facilities management information; effectively manage the acquisition life 

cycle for contracting and construction; develop critical human capital resources; enhance information management to support corporate decision-making; and finally, 

improve service delivery. 

With the focus of today’s hearing on VA’s electronic contract management system 

and the major construction program, I’d like to inform the Committee on where we 

stand with regard to completing the recommendations identified by the OIG in each 

of the reports. Currently, OALC has two VAOIG reports with 4 recommendations 

that remain open. 

As part of OALC’s continuous improvement process, the findings and recommendations of all OIG and GAO reports are captured, analyzed, tracked, and 

acted upon. 

First, the ‘‘Audit of VA Electronic Contract Management (eCMS),’’ published in 

July of 2009 identified eight recommendations, five of which the OIG has closed. 

Significant progress has been made through management actions to complete system user training with training teams available to the administrations upon their 

request, putting in place oversight programs at the administration and headquarters level to review eCMS usage, and the ability to perform real property leasing actions within the system is in use. Three recommendations remain open. 

The recommendation to develop and implement a VA-wide eCMS policy and handbook to ensure consistent use and compliance with the system requirements is nearing completion. We completed developing and providing an integrated, role-based 

matrix for using the individual eCMS User Guides in the December 2010 release 

of the system. The remaining action to complete policy revision will be completed 

by the end of this month. The second open recommendation deals with the technical 

performance of the system. In response to this we completed phase one of our technical refresh in January 2010 with phase two scheduled to be completed in June 

of this year. The refresh includes server replacement, software changes to increase 

performance, and expanded data repository capacities. Finally, the remaining recommendation was to determine the feasibility of integrating eCMS with the Integrated Funds Control Point Activity, Accounting and Procurement System to 

streamline the procurement process. The integration software has been completed 

and tested and is scheduled for production roll out the first quarter of fiscal year 

2012. 


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The ‘‘Audit of VA’s Major Construction Contract Award and Administration Process,’’ identified four recommendations with one still remaining open. Successfully 

closed were recommendations to establish effective mechanisms to monitor contract 

slippage and ensure the timely close out of major construction projects, and develop 

a staffing plan to ensure quality assurance responsibilities are met. In the remaining open recommendation OALC is developing written quality assurance policies 

and procedures, and program performance measures addressing all QA Service 

areas of responsibilities. Phase one of this recommendation was completed in December of 2010 and phase II will be completed in June of this year at which time 

we will recommend to the IG that the report be closed. 

Also, in 2009 the Government Accountability Office issued a report on VA major 

construction noting that VA generally met GAO best practices for a Federal major 

construction program in 10 of 12 areas. From that report came two recommendations that VA fully supported and is in the process of implementing, first the use 

of an integrated master schedule and second conducting a risk analysis based on 

the project’s cost, schedule, and complexity. Both of these recommendations will be 

completed this fiscal year at which time VA will have implemented all 12 of GAO’s 

best practices. 

As proud as we are of the many improvements in VA’s acquisition and facilities 

management operations, we recognize the need for continuous improvement and will 

work diligently to maintain the confidence of the American public and the Congress. 

Mr. Chairman, we appreciate the opportunity to discuss VA’s acquisition, logistics, 

and construction operations with you. My colleagues and I are available for your 

questions. 


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MATERIAL SUBMITTED FOR THE RECORD 

U.S. Department of Veterans 

Memorandum 

Date: April 28, 2011 

From: Executive Director, Office of Acquisition, Logistics, and Construction 

(001ALC) 

Subj: Due Outs from April 12 Testimony (VAIQ 7085980) 

To: Director for Congressional Affairs (009) 

1. In response to a request for deliverables from the April 12, 2011, testimony to 

the House Committee on Veterans Affairs Subcommittee on Oversight and Investigations hearing entitled, ‘‘Inspect What You Expect: Construction Contracting 

Practices at the Department of Veterans Affairs,’’ the Office of Acquisition, Logistics, 

and Construction provides the following information. 

a. Deliverable: Regarding the electronic Contract Management System (eCMS), 

please provide Help Desk records that show the numbers of help tickets called in 

and resolved as far back as possible. Categorize them as designated in the Enterprise Acquisition System (EAS), e.g., password resets, the various level of calls, and 

response times. 

Response: The EAS analyzes eCMS Service Desk tickets and generates itemized 

and summarized reports through the Veterans Affairs Acquisition Help Desk tool 

set. The reports include a high-level data summary entitle eCMS Service Desk Tickets Summary Report and a detailed, record-level report eCMS Service Desk Tickets 

Detailed Report (see attachment 1). For clarity, a Sub-Category Definitions is also 

provided at attachment 1. [The detailed report will be retained in the Committee 

files.] 

Each record in the detailed report includes the following attributes: ticket number; date submitted; title; category; sub-category; priority; ; and status. The report 

can be filtered by attributes for a more detailed analysis. 

b. Deliverable: Please provide a list of training course materials VA uses for 

eCMS training. 

Response: The compact disc (CD) provided by the EAS Service includes eCMS 

classroom training materials, online tutorials, and user guides typically delivered 

during the EAS Service scheduled training sessions and through VA’s Acquisition 

Resource Center online access. A copy of the CD and the list of the data contained 

on the CD are at attachment 2. [The CD is being retained in the Committee files.] 

c. Deliverable: Please provide the year of implementation of the Paragon System 

and the initial cost. Provide the documented annual cost of the system starting in 

fiscal year 2005. 

Response: The Office of Construction and Facilities Management first began 

using the Paragon System in 1998 at the cost of $290,000. The annual costs, commencing in fiscal year (FY) 2005, are as follows: 

FY 2005–$385,000 

FY 2006–$308,000 

FY 2007–$478,000 (50 additional licenses) 

FY 2008–$308,000 

FY 2009–$500,500 

FY 2010–$855.000 (250 more licenses and enterprise version, Web hosting) 

FY 2011–$600,000 


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Attachments(2) 

Glenn D. Haggstrom 

Attachment 1 

eCMS Servicer Desk Ticket Summary Report 

(Cumulative through 4/19/2011 

Category Sub-Category Total 

Tickets 

ARC Announcement Request 3 

Community Request 44 

Content Request 50 

Online Registration 29 

Performance 19 

Technical Support 54 

Contract 

Module 

Action Maintenance 1653 

Delete Action 490 

Document Management 372 

Enhancement Request 76 

IAE 464 

Performance 152 

System Errors 314 

User Maintenance 1111 

Contracting 

Module 

Award Action 140 

Funding Actions 4 

Other Desktops 8 

Planning Actions 15 

Post Award—Contract Mods 1 

Post Award—Delivery/Task Orders 4 

Post Award—Order Mods 1 

Procurement Actions 117 

System Errors 18 

User Maintenance 102 

Views 4 

eCMS Homepage Other 36 

User Maintenance 4 


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Category Sub-Category Total 

Tickets 

Views 3 

Epic Document Server 4 

IFCAP Retrieval 245 

Performance 3 

Planning Module 45 

Solicitation Evaluation 11 

User Maintenance 45 

FAC CLP Tracker 141 

FAC C 911 

FAC COTR 5 

FAC PPM 102 

PAWS 1 

Performance 3 

IAE CCR 8 

eBuy 57 

FBO 247 

FPDS 679 

IFCAP 5 

Orca 1 

IFCAP 

Retrieval 

Configure IFCAP Instances(s) 9 

IFCAP Retrieval Status 39 

Retrieve IFCAP Requisition Data 15 

MicroStrategy 

Reporting Tool 

Dashboard 8 

Performance 18 

Report Request 61 

System Errors 7 

User Account 63 

Planning 

Module 

Report Request 3 

Policy Other 14 


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Category Sub-Category Total 

Tickets 

Solicitation 

Evaluation 

Evaluation 3 

Training 

Environment 

Accounts 30 

Certificates 2 

Other 47 

Vendor Portal Performance 7 

Solicitations 42 

User Management 368 

(no data) (no data) 1 

Cumulative Ticket Total 8538 

eCMS Service Desk Tickets by Category 

(Cumulative through 04/10/2011) 

Category Total Tickets 

ARC 199 

Contract Module 4632 

Contracting Module—OBE 414 


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eCMS Service Desk Tickets by Category—Continued 

(Cumulative through 04/10/2011) 

Category Total Tickets 

eCMS Homepage 43 

Epic 353 

FAC 1163 

IAE 997 

IFCAP Rtrvl 63 

Micro Strat 157 

Planning Module 3 

Policy 14 

Solicitation Eval. 3 

Training Environment 79 

Vendor Portal 417 

No Data 1 

Cumulative Ticket Total 8538 

Attachment 2 

VA eCMS Classroom Training Material: 

2–Day Training 

1. ARC-eCMS Refresher Training Agenda 

2. ARC-eCMS Refresher Training Presentation 

4–Day Training 

1. ARC-eCMS Certification Training for Contracting Agenda 

2. ARC-eCMS Certification Training for Contracting Exercises 

3. ARC-eCMS Certification Training for Contracting Presentation 

4. VA eCMS Classroom Training Exercises (CAATS) 

Reviewer Role-Based Training 

1. ARC-eCMS Reviewer Training Agenda 

2. ARC-eCMS Reviewer Training Exercises 

3. ARC-eCMS Reviewer Training Presentation 

Supervisor Role-Based Training 

1. ARC-eCMS Supervisor Training Agenda 

2. ARC-eCMS Supervisor Training Presentation 

3. ARC-eCMS Supervisor Training Exercises 

Training for Procurement and Purchasing 

1. ARC-eCMS Certification Training for Purchasing Agenda 

2. ARC-eCMS Certification Training for Purchasing Exercises 

3. ARC-eCMS Certification Training for Purchasing Presentation 

VA eCMS Online Tutorials: 

1. Action Lookup Online Tutorial 

2. Construction Contracts Online Tutorial 

3. Create Action from an Existing Action Online Tutorial 


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4. Document Generation Online Tutorial 

5. e-Buy Online Tutorial Part 1 

6. e-Buy Online Tutorial Part 2 

7. Enterprise System Administration Online Tutorial 

8. FBO Announcing Online Tutorial 

9. FPDS Reporting Online Tutorial 

10. Order Creation Online Tutorial 

11. Overview of the Briefcase Tab Online Tutorial 

12. Overview of the Summary Tab Online Tutorial 

13. Overview of the Data Values Tab Online Tutorial 

14. Overview of the Documents Tab Online Tutorial 

15. Overview of the Milestones Tab Online Tutorial 

16. Vendor Portal Posting Online Tutorial 

17. Views Online Tutorial 

18. ReadMe File Instructions 

VA eCMS User Guides: 

1. eCMS Acquisition Planning Guide Contracting Offices 

2. eCMS Acquisition Planning Guide Program Offices 

3. eCMS Acquisition Review Guide 

4. VA eCMS Action and Desktop Management Guide 

5. eCMS CMTS User Guide 

6. VA eCMS Construction Contracts Guide 

7. VA eCMS Contract Creation Guide 

8. VA eCMS Document Creation & Formatting Guide 

9. VA eCMS Enterprise System Administration Guide 

10. VA eCMS Evaluators Guide 

11. VA eCMS External Vendor Guide 

12. VA eCMS FBO Announcing Guide 

13. VA eCMS FCO Reporting Guide 

14. VA eCMS FPDS Reporting Guide 

15. eCMS FSS and eBuy User Guide 

16. VA eCMS IFCAP Retrieval Guide 

17. VA eCMS Manager’s Guide 

18. VA eCMS Milestone Plans Guide 

19. VA eCMS Multiple PRs and Awards Guide 

20. VA eCMS Order Creation Guide 

21. VA eCMS Quick Reference Guide 

22. VA eCMS Recovery Act Guide 

23. VA eCMS Reviewer’s Guide 

24. VA eCMS Solicitation Evaluation Guide 

25. VA eCMS Solicitation Guide for the NAC 

26. VA eCMS Solicitation Management Guide 

27. VA eCMS Utilizing Views Guide 

28. VA eCMS Vendor Portal Guide 

29. eCMS Vendor’s Guide 

f 

Committee on Veterans’ Affairs 

Subcommittee on Oversight and Investigations 

Washington, DC. 

May 10, 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 the Oversight and Investigations Subcommittee hearing entitled 

‘‘Inspect What You Expect: Construction Contracting Practices at VA’’ that took 

place on April 13, 2011, I would appreciate it if you could answer the enclosed hearing questions by the close of business on June 14, 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 Committee and Subcommittee hearings. Therefore, 


ccoleman on DSK8P6SHH1PROD with HEARING
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it would be appreciated if you could provide your answers consecutively and singlespaced. 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 diane.kirkland@mail.house.gov. If you have any questions, please call 

202–225–3527. 

Sincerely, 

Bill Johnson 

Chairman 

EG/dk 

The Honorable Bill Johnson 

Oversight and Investigations Subcommittee 

House Committee on Veterans Affairs 

‘‘Inspect What You Expect: Construction Contracting Practices at VA’’ 

April 13, 2011 Hearing 

Question 1: What is the total cost for the implementation of eCMS? 

Response: The total development cost for Electronic Contract Management Sys- tem (eCMS) was approximately $13.4 million. The cost includes requirements definition, software licenses, training, and system development. The $20 million figure 

provided at the April 13th hearing included an additional approximately $6.5 million attributable to maintenance and operational support costs incurred during the 

initial post-implementation years, from 2003 through 2006. 

Question 2: Given the very similar capabilities between eCMS and Paragon, are 

any efforts being made to consolidate the two, remove duplicative functions, and 

provide a cost saving? 

Response: Although, both systems contain contract documentation, eCMS is a 

contract writing system established to standardize and replace paper contract files; 

and Paragon is a project management system used during post-award to manage 

major construction projects and track some aspects of the administration of the construction contract during the construction period. 

VA’s eCMS is a Web-based contract management system which provides preaward, award, and post-award functionality for all new procurement actions valued 

over $3,000. It has a limited ability to transfer data and/or documents (i.e., specifications and drawings) to FedBizOpps; however, documents can be uploaded directly through FedBizOpps. 

Paragon is a commercial off-the-shelf (COTS) package that the Office of Acquisition, Logistics, and Construction (OALC), Office of Construction and Facilities Management (CFM) has used for approximately 13 years to manage and administer 

their major construction program within the VA, primarily, in the field. It integrates 

all facets of program management (post-award) into a single unified system. It is 

the software tool utilized by Resident Engineers in the field, to administer the construction phase of the project on a daily basis. Specifically, Paragon manages and 

tracks submittals, trends, meeting minutes, daily logs, requests for information, proposal requests, correspondence and invoicing. In addition, the Resident Engineers 

generate contract modifications within their limited authority through Paragon to 

correct technical deficiencies and to keep the project on schedule and within budget 

as it relates to the invoices and schedules. 

A dialogue began approximately 2 years ago with eCMS and Paragon representatives outlining the desire for an electronic transfer of contract data without duplication. As of this quarter, the data exchange has been completed and the automated 

uploading is successfully being accomplished. 

Question 3: VetBizOpps is a self-certification site for businesses and VA now 

verifies the accuracy of the information in that system. How does VA ensure contracts are not awarded to businesses unqualified to perform work? 

Response: VA’s Veteran-owned small business (VOSB) Verification Program 

verifies a contractor’s ownership (e.g., whether or not they are a service-disabled 

Veteran-owned small business (SDVOSB) or a VOSB. The verification process does 

not review prospective contractors for their capability to perform any specific contract or type of contracts. Capability is a contract-specific matter, assessed as part 

of the evaluation process according to criteria specified in the solicitation. In responding to the solicitation, offerors know what information they must provide to 

document capability to the satisfaction of the source selection team and the conVerDate Mar 15 2010 07:19 Aug 27, 2011 Jkt 065874 PO 00000 Frm 00052 Fmt 6621 Sfmt 6621 I:\WAYS\OUT\65874.XXX GPO1 PsN: 65874

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tracting officer. Where a contract will be awarded through negotiation, the contracting officer may request additional clarifying information where appropriate. 

Where a contract will be awarded based on lowest price through sealed bidding, insufficient information on capability may result in the offer being deemed unresponsive and not considered. 

The VetBiz.gov Vendor Information Pages (VIP) is a database located on the 

Internet at www.vip.vetbiz.gov, where prospective VA contractors register their information as part of their application for verification as SDVOSB or VOSB. Veteran 

ownership and control is no longer self-certified at VA, but is verified according to 

standards established in title 38, Code of Federal Regulations, part 74. This 

verification includes detailed reviews of documents submitted; follow-up interviews; 

and where appropriate, a site visit. Additionally, effective October 1, 2010, all contractors must be verified prior to receiving a VA contract award through the Veterans First Contracting Program. The authorities under Public Law (P.L.) 109–461, 

the Veterans Benefits, Health Care, and Information Technology Act of 2006, were 

implemented by VA as the Veterans First Contracting Program, effective June 20, 

2007. 

Question 4: North American Industry Classification System (NAICS) is the 

standard used by Federal statistical agencies in classifying business establishments 

for the purpose of collecting, analyzing, and publishing statistical data related to the 

U.S. business economy. Do companies without the proper NAICS certifications ever 

receive a contract for work that they are unqualified to perform? If so, why? 

Response: As the question notes, NAICS codes are industry classifications primarily for statistical purposes and to determine the business size (large or small) 

for the industry in question. They are not certifications of capability to perform any 

particular contract or class of contract. Capability is assessed according to criteria 

disclosed in the solicitation, as discussed under question 3, above. NAICS codes describe industry categories in very broad terms and cannot substitute for the detailed 

evaluation of a specific offeror’s capabilities in response to a solicitation. For example, NAICS code 621111 (Offices of Physicians Except Mental Health Specialists) includes general family practitioners as well as cardiologists, dermatologists, ophthalmologists, and pediatricians, among others. The code itself is too general to provide 

meaningful insight into the capabilities available at a specific physician’s office. This 

is consistent, however, with its function primarily as a statistical tool. 

Question 5: How could a business without the proper NAICS certification be 

awarded a contract by VA, after which the company then subcontracts out to a larger business, in violation of the Federal Acquisition Regulation (FAR)? What is done 

to correct this problem when identified? 

Response: As noted under Question 4, NAICS codes do not provide certification 

as to an offeror’s capabilities. Capability is assessed according to criteria disclosed 

in the solicitation. As part of responding to the solicitation, an offeror typically must 

provide insight into the staffing of its firm, including education and experience, past 

performance as well as the extent to which it will rely on subcontractors to perform 

the contract and how it will oversee and manage those subcontracts to ensure the 

government’s requirements are met. In general, an offeror has considerable flexibility to assemble the best team of subcontractors to supplement its own capabilities 

as necessary to meet the criteria in the solicitation; the main limiting factor is that 

over reliance on subcontractors may result in a higher price that causes the offeror 

to be non-competitive and not win the award in the first place. 

However, subcontracting limitations also apply where a small business wins a 

contract in a competition restricted to a particular class of firm, such as a SDVOSB, 

VOSB, qualified HUBZone small business concern, or participant in the business development program under Section 8(a) of the Small Business Act. These programs 

seek to aid a targeted class of firms, and the FAR limitations seek to ensure the 

assistance actually goes to firms in the targeted class. These subcontracting limitations are terms of the contract itself and are enforced just like any other term of 

the contract. 

Question 6: On March 9, 2010, in a Department Memorandum, Jan Frye, Deputy 

Assistant Secretary Office of Acquisition and Logistics (OAL), acknowledged that 

contract splitting occurred in violation of P.L. 109–461 by separating one contract 

into two in order to avoid competition and giving preferential treatment to a particular contractor. How does VA ensure such violations are kept to a minimum, especially when eCMS is not used? 

Response: VA is preparing new direction for its contracting community on this 

issue. In order to promote competition and to impede splitting of contracting reVerDate Mar 15 2010 07:19 Aug 27, 2011 Jkt 065874 PO 00000 Frm 00053 Fmt 6621 Sfmt 6621 I:\WAYS\OUT\65874.XXX GPO1 PsN: 65874

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quirements, the new guidance will require sole source procurements awarded under 

P.L. 109–461 to be reviewed and approved by a management official in the contracting activity. VA plans to issue this policy in the fourth quarter of 2011. Currently, VA’s approach to minimize violations is through training the program offices 

on the issues that contract splitting or fragmenting requirements may raise, and 

why they are to be avoided. 

Question 7: When a VA employee identifies contracting problems, how does VA 

acknowledge his or her effort? 

Response: When a VA employee identifies contracting problems, the supervisor 

and/or management review the validity of the problem(s). If the potential contracting problem has merit, necessary actions are taken to correct the problem. The 

employee is informed of the results of the review as to whether or not action was 

taken. In some instances, employees are recognized through an ‘‘employee award’’ 

for their effort in identifying the issue. 

Question 8: Does VA review every indication of contracting problems brought to 

the attention of management? If not, please describe in detail the decision process 

on whether to review a reported problem. 

Response: OALC officials review all contracting problems brought to management. VA expects its managers to address and resolve contracting problems brought 

to their attention at the lowest organizational level possible, in accordance with 

good management practice. Contracting problems which cannot be resolved by first 

line managers are referred up the chain of command, and additional resources are 

brought to bear as needed. Those resources include but are not limited to the Office 

of General Counsel, the Office Inspector General, as well as other subject matter 

experts. 

Question 9: The Subcommittee on Oversight and Investigations found evidence 

that, on more than one occasion, a number of blanket purchase agreements were 

the result of bundling contracts for services that were well within the capability of 

small firms, including Service Disabled Veteran Owned Small Businesses and Veteran Owned Small Businesses. Not only did these practices deprive veteran owned 

businesses of potential contracts, but it froze them out for a period of 3–5 years. 

How would you recommend VA resolve such problems given the relevant statutory 

language in Public Law 109–461 and pertinent regulations? 

Response: VA’s OSDBU reviews all proposed acquisition strategies involving contract bundling where the anticipated dollar value is at least $1 million. This is a 

more stringent standard of review than specified in the FAR, which directs most 

agencies to review contract bundling of anticipated value of $2.5 million or more 

(FAR § 7.104). In practice, OSDBU’s role is more dynamic than mere concurrence 

or non-concurrence with a proposed acquisition strategy. As a participant in the Integrated Product Teams (IPT) developing acquisition plans for contracts over $5 million, OSDBU provides market research and recommendations to the IPTs on how 

to comply with statutory and regulatory limitations on bundling, often preventing 

a potential inappropriate bundling situation from developing in the first place. 

Any contract awarded necessarily excludes unsuccessful offerors for the term of 

the contract. During the course of the contract, VA is committed to obtaining the 

goods or services specified in the contract from the awardee(s), by the terms of the 

contract. The volume of work to be performed generally drives the level of vendor 

interest in the contract and the pricing terms (i.e., volume discounts). Unsuccessful 

offerors may perceive this as being excluded from the process but for the successful 

offeror it is the consideration received as part of the contract. 

Fragmentation of a requirement among too many vendors drives up government 

oversight costs and may reduce vendors’ interest in the work as the lower contract 

value may mean these vendors have better ‘‘opportunity cost’’ on other, larger volume contracts. VA seeks balance in making these decisions. When VA can use the 

contract to provide targeted socioeconomic preference firms at a viable volume of 

work, VA establishes contracts and blanket purchase agreements (BPA) to allow 

better participation and promote a strong competitive environment. When VA anticipates a need for additional suppliers or additional competition during the course of 

a contracting arrangement, VA may make multiple awards and compete subsequent 

purchases among the awardees. 

Question 10: Evidence has been submitted to the Committee of VA using letter 

contracts that allow construction work to begin prior to a price for that work being 

written in the contract? Why does this happen, under what circumstances is it permitted, and how can it still happen even when not permitted? 


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Response: A letter contract is permissible in accordance with FAR 16.603 and 

is only utilized when the contracting officer, along with the approval of the Head 

of Contracting Activity (HCA), identifies the urgency of need to fulfill such requirement or service for a specific project. In the VA major construction program it is 

extremely rare that letter contracts are used. 

Question 11: How does VA prevent double payments or other unnecessary payments on a contract? Would more thorough usage of eCMS prevent these from happening? 

Response: VA relies on a manual three-way match of the contract, invoice, and 

receipt to prevent double or unnecessary payments. The contracting officer provides 

the contracting officer’s technical representative (COTR) with the final contract documents. The COTR uses the VA Online Certification System (OLCS) to review and 

certify invoices for payments. The OLCS also checks for submission of duplicate invoices prior to notifying the COTR of an invoice submission. The COTR is notified 

through an automated email notification when he or she needs to review and certify 

an invoice. The COTR compares the invoice against the contract documents and certifies or refuses (approves or disapproves) the invoice accordingly. The vendor has 

to include the correct VA Purchase Order number on the invoice to facilitate the 

process. If a mistake (double payment) has been made VA immediately has the Austin Finance Center execute a bill of collection to that contractor. 

The VA three-way match process ensures the existence of a contract and its use 

by the COTR to review and approve invoices, providing verification to the Financial 

Officer who ensures correct payments are made. Greater use of eCMS supports the 

three-way match requirement by making contract documents readily available. The 

data in eCMS could provide an additional electronic means for validating payments 

if contracting and financial systems were to be integrated at VA. 

Question 12: In the hearing before the Oversight and Investigations Subcommittee on April 13, 2011, Mr. Bob Neary noted the importance of cost analysis 

‘‘in the selection of projects going forward.’’ Please provide a detailed description of 

the cost analysis process used in construction contracting. 

Response: In selecting projects to go forward, VA uses a cost-effectiveness analysis (CEA) during the budget formulation/project selection phase. The CEA is a preliminary step in the construction contracting process to help ensure an accurate 

analysis of the status quo and viable options (construct new, renovate, lease, etc.). 

The CEA compares the life cycle cost of the various options and provides the constant, inflated and discounted values (net present value) of each option. CEAs are 

completed by the business case preparers and reviewed by the Department as part 

of the Strategic Capital Investment Planning (SCIP) process, resulting in a 

prioritized list of capital projects to be used in formulating the annual budget request. The SCIP process is completed approximately 12 months prior to funds being 

appropriated for a major construction project and possibly several years before a 

construction contract is awarded. As a project progresses, initial planning costs are 

provided in the SCIP 10-year action plan and SCIP budget year business case, and 

at other stages including the Office of Management and Budget (OMB) submission. 

A project prospectus is also provided as part of the congressional budget submission, 

and costs may be revised again after final design is completed. 

VA’s standard practice for cost analysis is a review of historical data 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. The majority of VA projects are 

awarded on a firm-fixed price basis as a result of full and open competition. In those 

relatively few cases where a more detailed cost analysis is required, however, VA 

uses the Defense Contract Audit Agency (DCAA) to 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. 

Question 13: Who conducts the cost analysis and associated assessments when 

considering whether a VA structure should be leased, renovated, or built new? 

Response: 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 to 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—a new facility, leased faVerDate Mar 15 2010 07:19 Aug 27, 2011 Jkt 065874 PO 00000 Frm 00055 Fmt 6621 Sfmt 6621 I:\WAYS\OUT\65874.XXX GPO1 PsN: 65874

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cility, renovated facility, or contract care where appropriate. All capital business 

case applications for major, minor, non-recurring maintenance and leases (to include 

the cost analysis) 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. VA’s analysis is conducted within the framework of governmentwide initiatives like the President’s June 2010 Memorandum on Real Property 

and E.O. 13514 (on sustainable buildings). The preparer of the business case application proposes the method (build new, renovate, lease, etc.) to meet the identified 

gaps. The preparer must provide additional justification if the most cost effective 

means is the not chosen option. Various 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 the duration of the need (short term versus long 

term)—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 most likely 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 may more easily (and efficiently) renovate space or build new space on the campus. 

Question 14: Who reviews the cost analysis and associated assessments in making decisions towards contracts? 

Response: As a project progresses through the development stage and into the 

budget formulation/project selection stage, a CEA is required as part of the business 

case application. The application, comprised of questions relating to Departmental 

decision criteria, is used to demonstrate the need for, and priority ranking of, the 

project. Business cases are evaluated by the local facility director, the Veterans Integrated Service Network (VISN) Director, and the applicable administration (Veterans Health Administration, National Cemetery Administration, or Veterans Benefits Administration), which then forwards the business cases to the SCIP Board for 

review and scoring. The SCIP Board is a Department-wide group consisting of nine 

members from the Administrations and select staff offices. The business cases are 

also reviewed through the VA governance process, which results in a prioritized listing of capital projects for the budget year. Significant projects (such as major construction and leasing) include detailed cost estimates in their project prospectus, 

which are reviewed by the (OMB) and included in the Department’s budget submission to Congress. 

Question 15: In considering ‘‘best options’’ and a proper cost analysis, the Oversight and Investigations Subcommittee majority staff analysis revealed (and was 

confirmed by an independent third party) that construction at the Denver replacement medical center facility has appropriated money in FY 2004, 2006, 2007, 2008, 

2009 and 2010 with a total cost so far approaching half a billion dollars for the addition of about 40 beds. For comparative purposes, a medical facility in Washington 

DC added 220 beds for about $25 Million. How much has the Denver project cost 

so far (total)? 

Response: As of May 31, 2011, VA has obligated $107.5 million for the new medical facility in Denver, Colorado. The new 184-bed medical center will accommodate 

the Eastern Colorado Health Care System inpatient tertiary care and ambulatory 

care functions. The project includes a 30-bed Spinal Cord Injury/Disorder Center; a 

30-bed Nursing Home Community Living Center; a research building; a central utility plant; and parking structures. It also includes the remodeling of the former University Physicians, Inc. building to be the Clinic Building South, which will house 

clinical and administrative functions and a Department of Defense clinic at the top 

floor. The project will be LEED silver certified. 

The project addresses multiple problems, ranging from correcting the numerous 

deficiencies associated with an aging facility to closing the distance gap between 

VA’s medical school affiliate, the University of Colorado Hospital. The Denver medical center is over 60 years old, is inefficient, is space constrained, and will not support the capacity or quality of Veteran care needed for state-of-the-art treatment. 

The current facility lacks the capability to expand to meet the projected increasing 

workload demands. 

Question 16: Please provide a copy of the Senior Resident Engineer training lessons. 

Response: See attached SRE Training and Development Program Curriculum. 


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Question 17: How does VA prevent abuse of OLCS when CFM can request any 

Contracting Officer to make payment, especially when invoices do not have the appropriate accompanying supporting documentation? 

Response: OLCS is a dual certification system. A contracting officer is designated 

for each specific project in OLCS. Only a single alternate CO, rather than any CO, 

is also designated which allows invoices to be processed in the absence of the designated contracting officer. Not only does this prevent payment of interest on the 

government’s part, but ensures timely payment to the contractor. The requirement 

for processing invoices is the same for each contracting officer. They are required 

to verify the accuracy of such invoice to ensure compliance with regulations. All documentation for an invoice on a major construction project is kept at the field office 

of the Senior Resident Engineer (SRE). The SRE, who has limited contracting authority, approves in OLCS that services have been rendered. The contracting officer 

then certifies that invoice in OLCS. 

Question 18: Please provide a copy of the contract file related to the company 

Ellerbe Becket. 

Response: The information was submitted to the Subcommittee on Oversight and 

Investigations staff and will be retained in the Committee files. 

Question 19: Please provide details on the $99 million procurement for Advisory 

and Assistance Services to include the services provided and whether or not the 

Chief of Staff has approval authority (signature) at the same level as the Deputy 

Secretary. 

Response: VA queried the Federal Procurement Data System for details of the 

contract referenced in the question and was unable to identify a VA contract with 

those characteristics. 

In addition, VA’s Information Letter (IL) 049–07–10, on Advisory and Assistance 

Services, was rescinded August 10, 2010. This IL required approval by the Secretary 

or Deputy Secretary for Advisory and Assistance Services contracts above $1 million. The Veterans Affairs Acquisition Regulation part 801 sets thresholds for review 

and approval of contracts, including legal and technical review, and those provisions 

continue to apply. In addition, criteria in FAR subpart 37.2 also apply. 

Question 20: What is the present total cost of the San Antonio Polytrauma 

project? 

Response: The present total cost of the San Antonio Polytrauma project is $66 

million. 

Question 21: What penalties currently exist for VA employees who willfully violate the eCMS usage mandate? What actions are planned to hold employees accountable for not using eCMS? 

Response: Employee accountability for the use of eCMS rests within the supervisory chain, and ultimately resides with the cognizant Head of Contracting Activity 

(HCA). Given the sensitive nature of performance-based personnel actions and the 

potential for Privacy Act issues, VA cannot disclose this information. However, VA 

is providing the results of the OIG audit, as well as the results of its own internal 

reviews, to the HCAs to discuss corrective action with their respective staffs. VA 

concurs in the importance of correcting noncompliance with eCMS requirements and 

is directing senior-level management (HCAs) attention to monitoring and addressing 

this issue. 

Where appropriate, VA will address eCMS noncompliance with additional training 

and guidance, but where deficiencies persist, VA will treat noncompliance as a performance issue and take appropriate action. Similar to other employee performance 

management issues, corrective action(s) taken against employees are determined by 

the supervisor and follow VA human resources policy and procedures. 

To achieve consistency within the Department, the Office of Acquisition, Logistics 

and Construction (OALC) will work with the Department’s Office of Human Resources and Administration and the HCAs to develop a standard performance measure for inclusion in each VA contracting officer’s individual annual performance 

work plan on the use of eCMS to accomplish their contracting assignments. Their 

use of the system and the completeness of the contract files within the system will 

then be considered when developing their annual performance rating. We will target 

this to be effective for the Fiscal Year 2012 rating cycle which begins in October 

2011. 

Question 22: Do you feel that VA’s contract auditing process is effective and thorough? How could it be improved? 


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Response: Yes, VA’s process is effective and thorough, but timeliness may be a 

place to improve. The majority of VA’s pre-award and post-award reviews are done 

on our Federal Supply Schedule (FSS) offers and contracts. Pre-award and postaward reviews are normally triggered by a dollar threshold (estimated value of 

award or actual government sales achieved). We also request audits when it is believed that data may not be accurate or complete. The audit review process, including both pre-award and post-award reviews, is critical to ensure the integrity of the 

program, the pricing, and the best interests of the government. The pre-award reviews afford contracting staff the assurance the offeror provided accurate current 

and complete data and information. 

It also identifies and/or confirms the negotiation starting point. Post-award reviews ensure the basis of award and price protection provisions were complied with. 

The majority, but not all of the post-award reviews are generated by a self-audit 

completed by the contractor. Once notified and receipt is taken of the contractor’s 

findings, a post-award review is required, which typically finds additional recovery. 

The overall time it takes from the request to auditors to completion of review is 

very lengthy, often exceeding 180 days. Most is driven by the wait for additional 

information by the offeror/vendor to be provided, or access to their records. 

Question 23: Has VA ever compared its contract auditing process with other Federal agencies that employ external auditors? 

Response: All VA audits are to ensure compliance with applicable Federal regulation and guidance (e.g. FARs, Generally Accepted Government Accounting Standards). VA currently uses DCAA for any changes in excess of $700,000 to major construction contracts and new awards of architect/engineering contracts $10 million or 

more for contracts other than firm-fixed price. 

With regard to the FSS program, VA has evaluated the use of outside auditors. 

However, this is a unique program only assigned to the General Services Administration (GSA), who in turn delegated the health care categories to VA. VA Office 

of Inspector General reviews the program and VA has a process to train staff on 

the unique aspects of the FSS program. VA will continue to periodically evaluate 

the best course of support for the FSS program. 

Question 24: In the hearing before the Oversight and Investigations Subcommittee on April 13, 2011, Mr. Bob Neary noted that VA Construction does not 

use a sealed bidding as identified in VA Acquisition Regulation, Subchapter C, Subpart 81401, Section 814.104. Please explain in detail why this method is not being 

used. 

Response: The use of sealed bidding and competitive proposals are both acceptable methods for procuring construction contracts as defined in the FAR Part 6.401. 

‘‘One of the requirements of using the sealed bid process is that ‘‘the award will be 

made on the basis of price and other price-related factors,’’ and requirements must 

be 100 percent known. VA procurement requirements go well beyond price; price is 

just one factor. Contracts to build state-of-the-art VA medical centers and national 

cemeteries are awarded to a contractor based on the review of their past performance, contractor management approach and their small business participation. 

Using this ‘‘Best Value’’ method for procuring the new VA medical centers and national cemeteries has provided the greatest overall benefit for our customers and 

has shown to have an overall savings. Therefore, using only the sealed bid process, 

which is based on price and price-related factors, would limit the ability to obtain 

the ‘‘Best Value’’ for our Veterans and taxpayers. 

Question 25: Please provide the background on the limited warranted contracting authority given to Senior Resident Engineers as well as any changes being 

considered to this authority. 

Response: VA Senior Resident Engineers (SRE) and Resident Engineers (RE) 

may receive a Basic C Level Warrant with limited contracting authority for the 

specified construction contract which cannot be utilized without a Contracting Officer Authorization (COA). The basic level warrant authority for a SRE is $100,000 

and $50,000 for a RE. The SRE and/or RE are required to meet all requirements 

of the Federal Acquisition Certification in Contracting (FAC–C) program prior to 

being issued a basic level warrant for contracting authority. The language that is 

identified on all SRE/RE warrants states ‘‘Expenditures at or below $100,000 for 

modifications issued against existing CFM contracts upon the issuance of a COA letter of delegation.’’ The authority for a SRE and a RE differ, as outlined below: 

SRE—The following limitations apply to progress payments, change orders and 

supplemental agreements issued under this authorization order: 


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a. $100,000 increase or decrease (or estimated increase or decrease) for any one 

change except the issuance of a settlement by determination; 

b. Twenty (20) calendar day period between changes issued by same SRE; 

c. $300,000 net increase per calendar month for changes issued by all SREs for 

specified project; 

d. Authority to stop work for a two work day period in accordance with FAR 

52.242–14, Suspension of Work; 

e. All Progress Payments except Final Payment. Any retainage must be authorized by the Contracting Officer; and 

f. This authority expires on the date of final settlement of the specified construction contract. 

RE—The following limitations apply to progress payments, change orders and 

supplemental agreements issued under this authorization order: 

a. $50,000 increase or decrease (or estimated increase or decrease) for any one 

change except the issuance of a settlement by determination; 

b. Ten (10) calendar day period between changes by the same RE; 

c. $150,000 net increase per calendar month for changes issued by all Res for the 

specified project; 

d. Authority to stop work for a one work day period in accordance with FAR 

52.242–14, Suspension of Work; 

e. All Progress Payments except Final Payment. Any retainage must be authorized by the Contracting Officer; and 

f. This authority expires on the date of final settlement of the specified construction contract. 

At this time, VA is not considering a change to the authority for the SRE and/ 

or RE basic level warrants. 

Question 26: As discussed in the hearing before the Oversight and Investigations 

Subcommittee on April 13, 2011, by Mr. Haggstrom, please provide the class schedule for formal training in eCMS at the VA Acquisition Academy for calendar year 

2010, a copy of the course training guide, and the number of VA employees that 

underwent this training during that time period. 

Response: All new contracting staff who will use eCMS are required to undergo 

eCMS training prior to using the system. In fiscal year 2010, a total of 1,352 users 

were trained by an eCMS Application Coordinator or a vendor. Vendors trained 

1,119 users through one of the 77 training sessions listed below. Eighty-eight of the 

1,119 users who received Vendor instruction were trained as Application Coordinators under a ‘‘Train-the-Trainer’’ initiative; they will fill the trainer role within their 

organization. Application Coordinators trained 233 of the 1,352 users who received 

training. The training curriculum is the same whether provided through the vendor 

or the Application Coordinators. VA Acquisition Academy does not provide eCMS 

training. 

# Training Dates Location Number of 

Attendees 

1 Nov. 2–6, 2009 Orlando, FL 24 

2 Nov. 17–20, 2009 Orlando, FL 22 

3 Oct. 5–6, 2009 Dayton, OH 23 

4 Oct. 5–9, 2009 Brecksville, OH 18 

5 Oct. 26–30, 2009 Stafford, VA 11 

6 Nov. 9–13, 2009 Washington, DC 12 

7 Nov. 16–20, 2009 Washington, DC 11 

8 Nov. 17–20, 2009 Long Beach, CA 18 

9 Dec. 1–2, 2009 San Antonio, TX 18 

10 Dec. 3–4, 2009 San Antonio, TX 18 


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# Training Dates Location Number of 

Attendees 

11 Dec. 1–4, 2009 Hampton, VA 19 

12 Dec. 8–11, 2009 Murfreesboro, 

TN 

10 

13 Dec. 8–11, 2009 Brockton, MA 11 

14 Dec. 15–16, 2009 Murfreesboro, 

TN 

14 

15 Dec. 14–18, 2009 Frederick, MD 14 

16 Jan. 4–8, 2010 Frederick, MD 16 

17 Jan. 12–13, 2010 Chicago, IL 18 

18 Jan. 14–15, 2010 Chicago, IL 20 

19 Jan. 12–13, 2010 Wilmington, DE 14 

20 Jan. 14–15, 2010 Wilmington, DE 6 

21 Jan. 19–22, 2010 Chicago, IL 15 

22 Jan. 21–22, 2010 Murfreesboro, 

TN 

10 

23 Jan. 25–28, 2010 Frederick, MD 15 

24 Jan. 26–27, 2010 Coatesville, PA 14 

25 Jan. 28–29, 2010 Coatesville, PA 16 

26 Feb. 4–5, 2010 New York 

(Bronx), NY 

16 

27 Feb. 2–5, 2010 Eatontown, NJ 18 

28 Feb. 16–17, 2010 Ann Arbor, MI 10 

29 Feb. 18–19, 2010 Ann Arbor, MI 13 

30 Feb. 18–19, 2010 Murfreesboro, 

TN 

11 

31 Feb. 23–24, 2010 Indianapolis, IN 9 

32 Feb. 25–26, 2010 Indianapolis, IN 12 

33 Feb. 23–24, 2010 Dayton, OH 16 

34 Feb. 25–26, 2010 Cleveland, OH 17 

35 Mar. 8–11, 2010 Frederick, MD 17 

36 Mar. 9–10, 2010 Perry Point, MD 17 

37 Mar. 16–17, 2010 Murfreesboro, 

TN 

15 

38 Mar. 15–19, 2010 Bedford, MA 13 

39 Mar. 23–26, 2010 Coatesville, PA 12 

40 Mar. 25–26, 2010 Buffalo, NY 14 


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# Training Dates Location Number of 

Attendees 

41 Mar. 30–31, 2010 Pittsburgh, PA 14 

42 Apr. 1–2, 2010 Pittsburgh, PA 15 

43 Apr. 6–7, 2010 Arlington, TX 21 

44 Apr. 8–9, 2010 Lyons, NJ 15 

45 Apr. 13–14, 2010 Martinsburg, WV 10 

46 Apr. 15–16, 2010 Martinsburg, WV 12 

47 Apr. 12–13, 2010 Brockton, MA 10 

48 Apr. 15–16, 2010 Manchester, NH 12 

49 Apr. 22–23, 2010 Tampa, FL 19 

50 Apr. 22–23, 2010 Menlo Park, CA 19 

51 Apr. 27–28, 2010 Palo Alto, CA 25 

52 May 4–5, 2010 Lake City, FL 13 

53 May 6–7, 2010 San Juan, P.R. 12 

54 May 11–12, 2010 West Haven, CT 10 

55 May 11–12, 2010 Lyons, NJ 11 

56 May 13–14, 2010 Brockton, MA 16 

57 May 18–19, 2010 Lake City, FL 12 

58 May 18–19, 2010 Milwaukee, WI 12 

59 May 20–21, 2010 Milwaukee, WI 12 

60 May 25–26, 2010 Lake City, FL 10 

61 May 25–26, 2010 New York 

(Bronx), NY 

13 

62 May 27–28, 2010 New York 

(Bronx), NY 

13 

63 Jun. 1–2, 2010 Albany, NY 11 

64 Jun. 10–11, 2010 Houston, TX 13 

65 Jun. 10–11, 2010 Orlando, FL 9 

66 Jun. 15–16, 2010 Minneapolis, MN 19 

67 Jun. 17–18, 2010 Minneapolis, MN 18 

68 Jun. 22–23, 2010 Orlando, FL 8 

69 Jun. 24–25, 2010 Orlando, FL 21 

70 Jun. 24–25, 2010 Long Beach, CA 22 

71 Jun. 29–30, 2010 Syracuse, NY 13 

72 Jul. 22–23, 2010 Orlando, FL 14 


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# Training Dates Location Number of 

Attendees 

73 Jul. 27–28, 2010 Miami, FL 16 

74 Aug. 10–11, 2010 Omaha, NE 8 

75 Aug. 12–13, 2010 Omaha, NE 9 

76 Aug. 17–20, 2010 Omaha, NE 19 

77 Aug. 24–25, 2010 Dublin, GA 16 

TOTAL 

ATTENDEES 

1,119 

The Enterprise Acquisition Systems (EAS) Service and the Office of Acquisition 

Policy developed an eCMS User Guide Index that provides an integrated, role-based 

matrix for using the 27 individual eCMS user guides. The eCMS guides provide 

users with system information and include system processes, procedures, and compliance requirements. 

Users can access eCMS guides using the following link: http://arc.aac.va.gov/ 

Acquisition/ECMS/eCMSTrainingMaterials/Pages/VAARCeCMSUserGuides.aspx 

Question 27: Please provide the class schedule for formal training in Paragon for 

calendar year 2010 and the number of VA employees that underwent this training 

during that time period. 

Response: In calendar year (CY) 2010 CFM held a total of eight (8) classes with 

a total of ninety-five (95) employees trained. The classes are held for CFM REs, 

project managers, clerical assistants, and contracting officers because Paragon is 

used primarily for major construction projects. The group is made up of new CFM 

employees and those requiring refresher training. The class schedule for CY 2010 

was: February–9; April–13; June–11; August–11; September–11; October–13; November–14; and December–13. 

Question #16 Response: Attached SRE 

Training and Development Curriculum 

CFM 

Senior Resident Engineer (SRE) Training & Development Program 

Curriculum 

Standardized Curriculum for Face-to-Face Training 

SRE Development Program will be 2 years in duration, with face-to-face training 

scheduled every quarter if possible. Group training will incorporate core technical 

and management skills for Resident Engineers seeking to develop the expertise of 

an SRE. Priority numbers indicate preferred sequence of training over 2 years. 

Training Priority Trainers Time Notes Category Dates 

Done 

Priority 

for session 

planning 

purposes 

23 hrs 

Program 

Orientation 

1 Internal— 

SREs & Senior 

Mgt 

4 hrs #1 & #2 on original curriculum 

combined to total 

approx. 3.5 days. 

1—SRE 

Development Orient./CFM 

Org. 

IDP for 

SRE Development 

1 Internal—SRE 

and Coach 

1 hr 1—SRE 

Development Orient./CFM 

Org. 


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Training Priority Trainers Time Notes Category Dates 

Done 

Color of 

Money, 

Contingency 

Management, FITT, 

PMDRI 

1 Arlyce 2 hrs 2—Office 

Admin & 

Operations 

(File 13) 

Filing Systems, Office 

Organization and 

Procedures 

1 Dana Quel 3 hrs How to administer an office, 

manage correspondence and 

other paperwork. 

4—Contract 

Admin/ 

Documentation 

Preconstruction Meeting With 

Contractors 

and VA Clients 

1 Derek Underwood 2 hrs Procedure for conducting pre-construction and 

partnering meetings, purpose of 

meetings, key 

areas to cover, coordination between parties in 

setting up meeting, etc. 

4—Contract 

Admin/ 

Documentation 

Understanding UpFront 

Specs: General Conditions, General Requirements, 

etc. 

1 Ed Nicholson/ 

Reginald Berry 

8 hrs How to read 

them, why it is 

important to read 

them. Avoiding 

unnecessary expense. Use ‘‘Real’’ 

documents as exercise. Need someone to discuss 

each Act and SRE 

roles/responsibilities 

5—Construction 

Contracts 

Setting Up 

the Office 

(How To/Logistics) 

1 SRE & PM 2 hr Trailers, supplies/ 

lists, clerical, 

mail, contracts 

2—Office 

Admin & 

Operations 

Interfacing 

With Medical Center, 

Relationship to 

VAMC Director, Engineering, 

and Shops 

1 Coaches; perhaps Chief of 

Engineering. 

1 hr What to expect 

Relationship 

Things to consider 

Use FAB ‘‘Interface’’ Issue.

4—Contract 

Admin/ 

Documentation 

Training Priority Trainers Time Notes Category Dates 

Done 

2 36.5 hrs 

Travel 2 Shavonne 

Rush 

1 hr 3—Personnel 

(Self & 

Staff) 

Admin. 


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Training Priority Trainers Time Notes Category Dates 

Done 

Safety: SRE 

Responsibilities, Contractor Responsibilities, and 

Reporting 

Requirements 

2 Internal— 

SRE, CEOSH 

8 hrs 4—Contract 

Admin/ 

Documentation 

Davis 

Bacon Act/ 

Labor Provisions 

2 Robert Nowak 2 hrs What are the 

wages unique to 

the job location 

(under DOL). 

Wage report used 

in contract. Ensure contractor is 

paying proper 

wages, how payroll is presented, 

etc. 

5—Construction 

Contracts 

Testing Lab 

Contracts 

2 Internal 1 hr What is the SRE’s 

responsibility 

with these contracts. 

5—Construction 

Contracts 

Review 

NAS Specifications 

2 Bill Goodman 4 hrs 5—Construction 

Contracts 

Submittal 

Process 

2 Coaches 1 hr Review spec section 01340 4—Contract 

Admin/ 

Documentation 

A/E & CM 

Contracts 

during Construction 

Period Service 

2 Katie Kuehn 1 hr Contractors Support 5—Construction 

Contracts 

Ethics 2 Ethics attorney 1 hr 6—Leadership/ 

Sup./Self 

Improve. 

Skills 

Progress 

Payments 

(General 

Conditions 

and Online 

Payments) 

2 Jane Houston/ 

Adelino ‘‘Dino’’ 

Gorospe 

2 hrs Progress payments procedures, 

things to check 

before submitting 

payments, 

retainage, Online 

certification process, prompt payment requirements/interest, 

etc. 

4—Contract 

Admin/ 

Documentation 

Change 

Clauses: 

FAR & 

VARR 

2 General Counsel and REs 4 hrs 5—Construction 

Contracts 

Correspondence/Writing Skills 

for Federal 

Managers 

2 TBD 1 day VBA has writing 

course for their 

managers; Arlyce 

will get a copy. 

6—Leadership/ 

Sup./Self 

Improve. 

Skills 


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Training Priority Trainers Time Notes Category Dates 

Done 

Acting 

Within 

Your Authority 

2 Diane Campbell/Sheila 

Watterson 

1.5 hr Limits to Authority, Warrant Limits, COA Delegation Letter, Review Thresholds/ 

Actions Requiring 

Higher Approval, 

etc. 

Unauthorized Commitments/ 

Ratifications 

2 Thaddeus 

Willoughby 

2 hrs Avoiding Unauthorized Commitments, Legal Penalties, Process for 

Ratification, Disciplinary Actions, 

etc. 

Training Priority Trainers Time Notes Category Dates 

Done 

3 18.5 –24.5 

hrs 

T & L Requirement, 

Regulations, Reporting, OT 

and Comp 

Time 

3 Sheila Walker 2 hrs 3—Personnel 

(Self & 

Staff) 

Admin. 

Conducting 

Meetings 

3 Robert Nowak 1 hr 6—Leadership/ 

Sup./Self 

Improve. 

Skills 

Project 

Planning 

Process 

3 Dennis Sheils 1 hr 1—SRE 

Development Orient./CFM 

Org. 

Compliance 

Reviews 

3 Dennis 

Milsten, Alan 

Trow 

2 hrs 4—Contract 

Admin/ 

Documentation 

Project Documentation 

and File 

Management, Inc. 

Administering 

Contracts in 

the Field 

3 Kyrgos, Contract Specialists 3 hrs Processing invoices, maintaining Contract Administration files 

in PM field offices 

4—Contract 

Admin/ 

Documentation 

Understanding and 

Communicating 

Project 

Specifications 

3 Coaches/PMs/ 

GCs 

1 hr 5—Construction 

Contracts 

Unsolicited 

Proposals 

3 Steffanie Wood 1/2 hr 5—Construction 

Contracts 


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Training Priority Trainers Time Notes Category Dates 

Done 

Warranted 

RE Responsibilities 

Unauthorized Commitment 

3 Adelino 

Gorospe 

1 hr 5—Construction 

Contracts 

Change Orders (CO) 

Supplemental 

Agreement 

(SA) ‘‘How 

to’’—Directive Memo 

for Record, 

Distribution, Forward Pricing, Pre-Negotiation 

Objectives 

Types of 

Modifications 

Change 

Clauses: 

FAR & 

VARR Material Storage On & 

Off Site 

3 Kathy Volpe/ 

Robert Kellner 

4 hrs Changes Clauses, 

Change Order and 

Supplemental 

Agreements procedures, Pricing/Negotiation, Special 

Types of Changes 

(i.e. Materials 

Storage), etc. 

5—Construction 

Contracts 

Communication, Team 

Building, 

Partnering 

3 1 hr 6—Leadership/ 

Sup./Self 

Improve. 

Skills 

FAC–C, 

Warrant, 

Continuing 

Ed. Points 

3 Myra Williams/Greg 

Sabater 

1 hr FAC–C requirements, warrant 

levels and thresholds, Continuing 

Education Points 

requirements/ 

ways to earn Continuing Ed. 

Contracting 

Responsibility for 

CPM Schedule (i.e. 

Time Extensions, 

Progress 

Payments, 

etc.) 

3 Susan Lam/ 

Chris Kyrgos 

1 hr (CO) 7 

hr (CPM) 

Working with 

CPM, Checking 

schedule prior to 

actions (Changes 

& progress payments), Critical 

Path impact, frequency of CPM reports, actions you 

can take if contractor is off 

schedule, etc. 

Training Priority Trainers Time Notes Category Dates 

Done 

4 21 hrs 

Critical 

Path Method (CPM) 

Time Extension 

Analysis 

4 Bill Goodman 2 days Mid first-year 

issue. Can this be 

taught in field offices?Ask Neary. 

5—Construction 

Contracts 


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Training Priority Trainers Time Notes Category Dates 

Done 

Consulting 

Support 

Services 

4 Sat Gupta 1 hr Learn what they 

do, how they can 

help. 

1—SRE 

Development Orient./CFM 

Org. 

Role of the 

Project 

Manager, 

Understanding 

Relationship of the 

SRE/PM 

Through 

the Project 

Process, 

Roles and 

Responsibilities Authority 

4 Bob Clifton 2 hrs Contact PMs by 

phone; arrange office visit if possible. 

1—SRE 

Development Orient./CFM 

Org. 

eCMS 

Training/ 

FPDS 

4 Frank 

Clemons 

2 hrs Overview of eCMS 

& FPDS, need for 

actions to be submitted via eCMS, 

FPDS report/annual certification 

of data, etc. 

Training Priority Trainers Time Notes Category Dates 

Done 

5 16 hrs 

Paragon Reports for 

the SRE 

5 Jim 

MacMorran, 

Gail Smith 

4 hrs 4—Contract 

Admin/ 

Documentation 

Performance Appraisals 5 Sheila Walker 2 hrs HR to tailor to 

REs/SREs. 

3—Personnel 

(Self & 

Staff) 

Admin. 

Performance-Based 

Interviewing 

5 Sabrina Clark 2 hrs 3—Personnel 

(Self & 

Staff) 

Admin. 

Understanding the 

Leasing 

Process 

SRE Managing a 

Lease 

5 George 

Szwarcman, 

Real Estate 

Specialists 

2 hrs Was ‘‘Leasing for 

REs’’ Could include attendees 

not in the SRE 

program. 

4—Contract 

Admin/ 

Documentation 

NCA 

Projects & 

Programs 

5 Rick Petersen 2 hrs Expectations and 

program overview. 

4—Contract 

Admin/ 

Documentation 


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Training Priority Trainers Time Notes Category Dates 

Done 

Develop 

skills to 

evaluate 

staff capabilities & 

provide 

guidance for 

their future 

development. 

5 TBD 1 hr 6—Leadership/ 

Sup./Self 

Improve. 

Skills 

Complaint/ 

conflict resolution 

skills to effectively receive, evaluate, and resolve complaints. 

5 TBD 1 hr 6—Leadership/ 

Sup./Self 

Improve. 

Skills 

FOIA Request and 

Release of 

Contract Information 

5 Noella Bond/ 

David Reich/ 

John Ezell 

1 hr Taking proper action when receiving a FOIA request, protecting 

procurement sensitive information 

(cannot be released to anyone 

outside of contracting at any 

time), types of 

procurement sensitive information, 

interaction with 

vendors without 

releasing protected information, etc. 

Cost Savings 5 Jose Bumbray/ 

Frank 

Clemons 

1 hr OMB Initiative 

Training Priority Trainers Time Notes Category Dates 

Done 

6 21—25 hrs 

Timely 

Project 

Close-Out, 

Construction and A/ 

E, Warranties/Manuals/AsBuilts and 

File Transfer 

6 Euclides 

Barrera 

1 hr Procedures for 

close-out, documents checks, 

punch-list, warranties, etc. 

4—Contract 

Admin/ 

Documentation 

Final Inspection: 

Requirements, 

Field Inspection, 

Custody 

and Transfer 

6 Dana Quel 3 hrs 4—Contract 

Admin/ 

Documentation 


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Training Priority Trainers Time Notes Category Dates 

Done 

Change 

Clauses: 

Rule 4 File 

Procedures 

6 General Counsel 1 hr Compilation of 

every document 

related to a dispute; used to defend govt position 

in a dispute. 

5—Construction 

Contracts 

Evaluation 

of A/E & 

Contractors 

(ACASS 

Training/ 

CPARS) 

6 Noella Bond 2 hrs Evaluations Reports, CPARS and 

ACAS systems, 

ongoing evaluations/corrective 

actions. 

Understanding Contracting Officer Decision Procedures 6 Ed Nicholson 2 hrs 5—Construction 

Contracts 

Suspension 

of Construction Work 

Via Change 

Order or 

Other Actions 

6 General Counsel & REs 4–8 hrs 5—Construction 

Contracts 

Negotiation 

Skills 

6 External 1 day 6—Leadership/ 

Sup./Self 

Improve. 

Skills 

Training Priority Trainers Time Notes Category Dates 

Done 

7 24 hrs 

BIM Process 7 Renee Tietjen 1 hr 1—SRE 

Development Orient./CFM 

Org. 

11/ 

2010 

Construction Cost Estimating 7 Bob Smoot/Michael Koch 2 hrs 6—Leadership/ 

Sup./Self 

Improve. 

Skills 

11/09 

Energy 

Management 

7 Kurt Knight 1 hr 1—SRE 

Development Orient./CFM 

Org. 

Physical Security Requirements 7 Kurt Knight 1 hr 1—SRE 

Development Orient./CFM 

Org. 


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Training Priority Trainers Time Notes Category Dates 

Done 

FAC–C Certification 

Other Contracting 

Training 

Utilize the 

Academy 

Keep Up 

With Training 

7 Greg Sabater 1 hr 1—SRE 

Development Orient./CFM 

Org. 

Public 

Speaking/ 

Communicating/5– 

Minute 

Presentations 

7 Internal 2 hrs 3—Personnel 

(Self & 

Staff) 

Admin. 

Responsibilities When 

an RE is on 

TEB PreAward and 

Post-Award 

Debriefings 

7 Noella Bond 1 hr 4—Contract 

Admin/ 

Documentation 

A/E Selection Criteria/Process, Inc. 

Brooks Bill 

7 Bob Smoot 2 hrs 5—Construction 

Contracts 

Historical 

Preservation, Understanding 

Program 

and SRE 

Rules & 

Regulations 

7 Kathleen 1 hr 5—Construction 

Contracts 

Supervisory 

Skills and 

Performance Management 

7 1 day Is this part of 

LDMP? 

6—Leadership/ 

Sup./Self 

Improve. 

Skills 

Source Selection 

Process 

7 Brian Johnson/ 

Robert Capers 

4 hr Role of Technical 

Evaluation Team 

in FAR 15 source 

selections, comments supporting 

ratings, correlating ratings to 

evaluation factors, 

protest risks, etc. 

Training Priority Trainers Time Notes Category Dates 

Done 

8 20 hrs 

Claims 

Avoidance 

and Mitigation 

8 Scott Lowe 2.5 days 7—Construction 

Claims/ 

Disputes 


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Training Priority Trainers Time Notes Category Dates 

Done 

Additional 

Recommended 

Training 

Complete 

the ‘‘Supervisory Models’’ 

9 Self 40 hrs 6—Leadership/ 

Sup./Self 

Improve. 

Skills 

VALU/CFM 

Leadership 

Development Mentoring Program 

(LDMP) or 

VALU/CFM 

Aspiring 

Leaders 

Program 

(ALP) 

9 Internal and 

External 

4 formal 

sessions/ 

year 

1—SRE 

Development Orient./CFM 

Org. 

f 

Committee on Veterans’ Affairs 

Subcommittee on Oversight and Investigations 

Washington, DC. 

May 2, 2011 

Mr. Glenn D. Haggstrom 

Executive Director, Office of Acquisitions, Logistics, and Construction 

U.S. Department of Veterans Affairs 

810 Vermont Avenue, NW 

Washington, DC 20420 

Dear Mr. Haggstrom: 

I would like to request your response to the enclosed deliverable I am submitting 

in reference to our House Committee on Veterans’ Affairs Subcommittee on Oversight and Investigations hearing on Inspect What You Expect: Construction Contracting Practices at VA on April 13, 2011. Please answer the enclosed hearing questions and deliverables by no later than Monday, May 30, 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 material for all full Committee and Subcommittee hearings. Therefore, 

it would be appreciated if you could provide your answers consecutively on letter 

size paper, 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 Ms. Orfa 

Torres by fax at (202) 225–2034. If you have any questions, please call (202) 225– 

9756. 

Sincerely, 

Joe Donnelly 

Ranking Member 

MH/ot 


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The Honorable Joe Donnelly, Ranking Member 

Subcommittee on Oversight and Investigations 

House Committee on Veterans Affairs 

‘‘Inspect What You Expect: Construction Contracting Practices at VA’’ 

April 13, 2011 

Question 1: I ask that you review your performance measures and provide us the 

names of the mid-management level staff that are not using eCMS or mandating 

the use of their subordinates. How is the VA planning to penalize and hold them 

accountable? 

Response: Employee accountability for the use of eCMS rests within the supervisory chain, and ultimately resides with the cognizant Head of Contracting Activity 

(HCA). Given the sensitive nature of performance-based personnel actions and the 

potential for Privacy Act issues, VA cannot disclose this information. However, VA 

is providing the results of the Office of Inspector General (OIG) audit, as well as 

the results of its own internal reviews, to the HCAs to discuss corrective action with 

their respective staffs. VA concurs in the importance of correcting noncompliance 

with eCMS requirements and is directing senior-level management (HCAs) attention to monitoring and addressing this issue. 

Where appropriate, VA will address eCMS noncompliance with additional training 

and guidance, but where deficiencies persist, VA will treat noncompliance as a performance issue and take appropriate action. Similar to other employee performance 

management issues, corrective action(s) taken against employees are determined by 

the supervisor and follow VA human resources policy and procedures. 

To achieve consistency within the Department, the Office of Acquisition, Logistics 

and Construction (OALC) will work with the Department’s Office of Human Resources and Administration and the HCAs to develop a standard performance measure for inclusion in each VA contracting officer’s individual annual performance 

work plan on the use of eCMS to accomplish their contracting assignments. Their 

use of the system and the completeness of the contract files within the system will 

then be considered when developing their annual performance rating. We will target 

this to be effective for the Fiscal Year 2012 rating cycle which begins in October 

2011. 

Question 2: Provide the Subcommittee a quarterly update on the eCMS utilization statistics within the Department. The 17 percent utilization rate and almost 

$1.4 billion not being tracked is troubling. 

Response: OALC’s internal review does not support the 17 percent utilization 

rate, and as a result, we cannot discuss its legitimacy. 

OALC tracks monthly metrics including eCMS Award Dollar Value, which corresponds most closely for the data matching analysis the OIG performed to assess 

eCMS usage. This monitors cumulative obligation figures, mapping the throughput 

of dollar awards in eCMS. For Fiscal Year 2011 (through April), this measure shows 

$5.98 billion in total cumulative dollar awards. OALC targeted $12 billion in total 

eCMS usage for FY 2011. 

For comparison, the following chart shows similar measures for prior fiscal years: 

Fiscal Year eCMS Award Dollar Value at Year-End 

2008 $5.4 billion 

2009 $8.6 billion 

2010 $11.6 billion 

VA concurs in the need for valid and reliable metrics to track eCMS use. Accordingly, VA relies on transactional statistical data such as eCMS award dollar value 

to provide statistics suitable for year-over-year comparison, to track progress. However, VA also concurs in the need for qualitative reviews to provide information useful for the HCAs and supervisors so they may take appropriate corrective action, 

even though the results of such qualitative reviews may not be produced in statistical form. 


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VA will develop a report that can be used proactively by acting Chief Acquisition 

Officer HCAs in ensuring eCMS usage. This report could be used to update the Subcommittee upon request. The first report can be provided within 30 days after the 

end of the 4th qtr FY 2011. 

Æ 


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