I 

118TH CONGRESS 

2D SESSION H. R. 10536 

To amend title 38, United States Code, to establish a mission of the Veterans 

Health Administration to innovate, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 19, 2024 

Mr. MCGARVEY (for himself and Mr. LEVIN) introduced the following bill; 

which was referred to the Committee on Veterans’ Affairs 

A BILL 

To amend title 38, United States Code, to establish a mission 

of the Veterans Health Administration to innovate, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Innovation for VA 

5 Technology and Entrepreneurship Act’’ or the ‘‘INNO6 VATE Act’’. 

7 SEC. 2. FINDINGS. 

8 Congress finds the following: 

9 (1) The Department of Veterans Affairs offers 

10 critical health care services through the Veterans 


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1 Health Administration (in this section referred to as 

2 the ‘‘VHA’’), serving as the largest integrated health 

3 care system, largest medical training organization, 

4 and one of the largest employers of health care pro5 fessionals in the United States. 

6 (2) Despite its size, assets, and reach, the VHA 

7 struggles to engage with private sector entities, par8 ticularly early-stage businesses, due to bureaucratic 

9 hurdles. 

10 (3) If provided new authorities through legisla11 tion, the VHA is positioned to create a paradigm 

12 shift in health care, revitalizing the way it develops 

13 and innovates to improve clinical care and access to 

14 health care for veterans, and modeling trans15 formational health care to the private sector, ulti16 mately benefitting all Americans. 

17 (4) Establishing a fifth mission of the VHA to 

18 innovate will ingrain an innovative mindset across all 

19 VHA operations, enhance the existing missions and 

20 spearhead a new American way in health care, im21 proving health outcomes for veterans, the health of 

22 the Nation, and national security. 

23 (5) The Office of Innovation of the VHA will 

24 authorize, fund, and streamline processes, enhancing 

25 the VHA network of innovation programs and fosVerDate Sep 11 2014 03:23 Jan 28, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H10536.IH H10536

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1 tering collaboration and partnerships with industry, 

2 government, and academia. 

3 SEC. 3. INNOVATION IN THE VETERANS HEALTH ADMINIS4 TRATION. 

5 (a) MISSION.—Section 305(b) of title 38, United 

6 States Code, is amended— 

7 (1) by inserting ‘‘(1)’’ before ‘‘The Under Sec8 retary’’; and 

9 (2) by adding at the end the following new 

10 paragraph: 

11 ‘‘(2) The missions of the Veterans Health Adminis12 tration are the following: 

13 ‘‘(A) Providing health care to eligible veterans. 

14 ‘‘(B) Supporting research to benefit veterans 

15 and the Nation. 

16 ‘‘(C) Providing education to health care pro17 viders in training. 

18 ‘‘(D) Supporting emergency response. 

19 ‘‘(E) Fostering innovation to advance health 

20 care technology and services for veterans and the 

21 Nation.’’. 

22 (b) OFFICE OF INNOVATION.— 

23 (1) ESTABLISHMENT.—Chapter 73 of title 38, 

24 United States Code, is amended by adding at the 

25 end the following new subchapter: 


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1 ‘‘SUBCHAPTER VI—INNOVATION 

2 ‘‘§ 7391. Office of Innovation 

3 ‘‘(a) ESTABLISHMENT.—There is in the Veterans 

4 Health Administration an Office of Innovation (in this sec5 tion referred to as the ‘Office’). The Office shall be a Fed6 eral laboratory, as such term is defined in section 4 of 

7 the Stevenson-Wydler Technology Innovation Act of 1980 

8 (Public Law 96–480; 15 U.S.C. 3703). 

9 ‘‘(b) FUNCTION.—The function of the Office is to fos10 ter innovation to advance health care and services for vet11 erans and the Nation by— 

12 ‘‘(1) researching, developing, and implementing 

13 innovative technologies and services to deliver the 

14 best health care practicable to veterans; 

15 ‘‘(2) assisting, funding, and partnering with 

16 non-Department entities that can rapidly accelerate 

17 the research, development, commercialization, and 

18 implementation of technologies and services de19 scribed in paragraph (1); and 

20 ‘‘(3) adopting a comprehensive approach that 

21 works across traditional silos to effectively and effi22 ciently— 

23 ‘‘(A) use financial and human resources; 

24 and 


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1 ‘‘(B) expedite the development, commer2 cialization, and deployment, of such tech3 nologies and solutions. 

4 ‘‘(c) CHIEF INNOVATION OFFICER.—The head of the 

5 Office is the Chief Innovation Officer. The Chief Innova6 tion Officer shall report directly to the Under Secretary 

7 for Health. 

8 ‘‘(d) ORGANIZATION AND PERSONNEL.—The Office 

9 shall be organized in such manner, and its personnel shall 

10 perform such duties and have such titles, as the Secretary 

11 may prescribe pursuant to this subchapter. 

12 ‘‘§ 7392. Hiring authorities 

13 ‘‘(a) EXEMPTION FROM CIVIL SERVICE LAWS FOR

14 CERTAIN EMPLOYEES.—(1) To carry out the function of 

15 the Office of Innovation, the Secretary may— 

16 ‘‘(A) appoint not more than 250 professional, 

17 clinical, and other employees (which may include 

18 permanent, temporary, or term-limited appoint19 ments) of the Department, without regard to— 

20 ‘‘(i) any provision of title 5 governing ap21 pointments and removals under the civil service 

22 laws; or 

23 ‘‘(ii) any provision of chapter 7 of this 

24 title; and 


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1 ‘‘(B) fix the base pay compensation of an em2 ployee appointed under this subsection— 

3 ‘‘(i) without regard to any other provision 

4 of law, including the General Schedule under 

5 section 5332 of title 5; and 

6 ‘‘(ii) at a rate determined by the Secretary 

7 that does not exceed the amount of annual com8 pensation (excluding expenses) established by 

9 section 102 of title 3. 

10 ‘‘(2) In carrying out paragraph (1), the Secretary 

11 shall— 

12 ‘‘(A) make lawful efforts to recruit a diverse 

13 workforce, including individuals under represented in 

14 clinical and other relevant technical and non-tech15 nical areas of expertise, including racial and ethnic 

16 minorities; and 

17 ‘‘(B) recruit employees with a variety of profes18 sional experiences and backgrounds, or dem19 onstrated expertise in a wide range of relevant dis20 ciplines and management skills. 

21 ‘‘(3) If the Secretary determines that maximum num22 ber of positions under paragraph (1) is insufficient, the 

23 Secretary shall submit to the Committees on Veterans’ Af24 fairs of the Senate and House of Representatives a written 

25 notification of such determination. 


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1 ‘‘(4) The Secretary may enter into an agreement with 

2 a private entity to identify and recruit highly qualified 

3 candidates for a position described in paragraph (1). 

4 ‘‘(b) OTHER EMPLOYEES.—The Secretary may use 

5 any other authority under this title to hire administrative, 

6 financial, clerical, and other employees necessary to sup7 port employees appointed under subsection (a). 

8 ‘‘(c) WAIVER OF INTERGOVERNMENTAL PERSONNEL

9 ACT MOBILITY PROGRAM LIMITS.—The Secretary may 

10 waive the limit on the period and number of assignments 

11 required under section 3372(a) of title 5 with respect to 

12 an individual who carries out the function established by 

13 section 7391(b) of this title under the mobility program 

14 under subchapter VI of chapter 33 of such title (commonly 

15 referred to as the ‘Intergovernmental Personnel Act Mo16 bility Program’). 

17 ‘‘(d) AUTHORITY TO ACCEPT FEDERAL

18 DETAILEES.—Upon request of the Secretary, the head of 

19 any Federal department or agency may detail, on a reim20 bursable or nonreimbursable basis (as determined by the 

21 Secretary and such head), any personnel of that depart22 ment or agency to the Department to assist in carrying 

23 out the function of the Office of Innovation. Such a detail 

24 may not exceed three years. 


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1 ‘‘(e) RECORDKEEPING.—The Secretary shall keep 

2 records regarding the exercise of authorities under this 

3 section. Such records shall include the following: 

4 ‘‘(1) the number of appointments made; 

5 ‘‘(2) the types of positions filled, including ti6 tles, occupational series, and grade; 

7 ‘‘(3) the number of positions filled for which 

8 notices were publicly issued; 

9 ‘‘(4) the number of qualified applicants who ap10 plied for such positions; 

11 ‘‘(5) the qualification criteria for such positions; 

12 and, 

13 ‘‘(6) the demographic information of individuals 

14 hired for such positions. 

15 ‘‘(f) REPORT.—Not less than once annually, the Sec16 retary shall submit to the Committees on Veterans’ Affairs 

17 of the Senate and House of Representatives a report on 

18 appointments under this section. Such report shall include 

19 the number of such appointments and an explanation of 

20 how such employees carry out the function established by 

21 section 7391(b) of this title. 

22 ‘‘§ 7393. Acceleration fund 

23 ‘‘(a) ESTABLISHMENT.—There is established an ac24 count, to be known as the ‘Veterans Health Care Innova25 tion Acceleration Fund’ (in this section referred to as the 


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1 ‘Fund’), which shall be available to carry out the function 

2 of the Office of Innovation, in addition to such amounts 

3 that are otherwise available for such purpose. To manage 

4 the fund, the Secretary may— 

5 ‘‘(1) accept monies from authorized sources for 

6 the Fund; 

7 ‘‘(2) accept and distribute monies within the 

8 Department as the Secretary determines necessary; 

9 ‘‘(3) establish a health care franchise function; 

10 and 

11 ‘‘(4) pay for expenses (including information 

12 technology or acquisition, advisory, or legal services, 

13 whether provided by an employee of the Department 

14 or pursuant to an agreement with a non-Department 

15 entity) that the Secretary determines necessary to 

16 carry out the function of the Office of Innovation, 

17 without regard to restrictions on funding type. 

18 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—(1) 

19 There are authorized to be appropriated to the Fund such 

20 sums as may be necessary to carry out the function of 

21 the Office of Innovation. Such sums shall remain available 

22 until expended or five years after receipt. 

23 ‘‘(2) The budget request for the Fund shall be sepa24 rate from the rest of the budget of the Department. 


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1 ‘‘(3) Appropriations for the Fund shall be separate 

2 and distinct from the rest of the budget for the Depart3 ment and not affect annual operational dollar allocations. 

4 ‘‘(c) NON-PROFIT CORPORATIONS.—To support the 

5 administration of the Fund with regard to acceptance of 

6 certain types of external funding, the Secretary shall au7 thorize existing nonprofit corporations, established under 

8 section 7361 of this title, to carry out the function of the 

9 Office of Innovation. 

10 ‘‘(d) REPORT TO CONGRESS.—The Secretary shall 

11 submit to Congress a detailed account, program, and 

12 project allocations of the amount recommended for alloca13 tion in a fiscal year from amounts in the Fund— 

14 ‘‘(1) for Fiscal Years 2026 and 2027, not later 

15 than 60 days after the date of enactment of the In16 novation for VA Technology and Entrepreneurship 

17 Act; and 

18 ‘‘(2) for each fiscal year thereafter through 

19 2035, as part of the annual budget submission of 

20 the President under section 1105(a) of title 31. 

21 ‘‘§ 7394. Agreements with non-Department entities for 

22 access to key assets of the Department 

23 ‘‘(a) AUTHORITY.—The Secretary may enter into an 

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1 partment entity access to a key asset of the Department 

2 so such entity may develop a technology or service that— 

3 ‘‘(1) supports the strategic plan of the Depart4 ment regarding health care; and 

5 ‘‘(2) addresses a veteran-specific core com6 petency. 

7 ‘‘(b) FEES.—(1) Subject to paragraphs (2) and (3), 

8 the Secretary shall negotiate fees under this section on 

9 a case-by-case basis, taking into consideration factors in10 cluding the costs and benefits to the United States of such 

11 agreement. 

12 ‘‘(2) The Secretary shall discount a fee under this 

13 section if the entity is a small business concern owned and 

14 controlled by a veteran. 

15 ‘‘(3) The Secretary shall not charge a fee under this 

16 section if the entity is a small business concern owned and 

17 controlled by a veteran with a service-connected disability. 

18 ‘‘(c) DEFINITIONS.—In this section: 

19 ‘‘(1) The term ‘key asset’ includes the fol20 lowing: 

21 ‘‘(A) Subject matter expertise & perspec22 tive. 

23 ‘‘(B) Properly protected data sets. 

24 ‘‘(C) Research evaluations, studies, and 

25 trials. 


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1 ‘‘(D) Customer feedback and insights. 

2 ‘‘(E) Simulation and production test envi3 ronments. 

4 ‘‘(F) Health care professionals, students, 

5 and trainees. 

6 ‘‘(G) Advanced manufacturing and three7 dimensional printing. 

8 ‘‘(H) Engagement from other Federal enti9 ties. 

10 ‘‘(I) A network of academic affiliates. 

11 ‘‘(2) The term ‘veteran-specific core com12 petency’ means a health condition that the Secretary 

13 determines disproportionately affects veterans. Such 

14 term includes the following: 

15 ‘‘(A) Prostheses. 

16 ‘‘(B) Spinal cord injury. 

17 ‘‘(C) Toxic exposure. 

18 ‘‘(D) Traumatic brain injury. 

19 ‘‘(E) Mental health (including suicide pre20 vention and post-traumatic stress disorder); 

21 ‘‘(F) Diabetes. 

22 ‘‘(G) Heart disease. 

23 ‘‘(H) Obesity. 

24 ‘‘(I) Cancer. 


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1 ‘‘§ 7395. Advance market commitments 

2 ‘‘(a) AUTHORITY.—The Secretary may enter into an 

3 advance market commitment, under which the Secretary 

4 shall guarantee to purchase, for a predetermined price, a 

5 technology or service provided by an entity that addresses 

6 an unmet need in the provision of health care to veterans. 

7 ‘‘(b) REQUIREMENTS.—An advanced market commit8 ment under this section shall include the following: 

9 ‘‘(1) Clearly defined and transparent rules. 

10 ‘‘(2) Clear definition of the technology or serv11 ice to ensure safety, effectiveness, and feasible deliv12 ery. 

13 ‘‘(3) Dispute settlement mechanisms. 

14 ‘‘(4) The ability to modify the terms of the 

15 agreement on the basis of new information regarding 

16 the number of veterans to be served with such tech17 nology or service. 

18 ‘‘(c) REPORT.—Not later than 120 days after exe19 cuting an advance market agreement, the Secretary shall 

20 submit to the House and Senate Committees on Veterans 

21 Affairs an annual report on the status and efficacy of such 

22 agreement. 

23 ‘‘§ 7396. Other transactional authorities 

24 ‘‘(a) AUTHORITY.—The Secretary may enter into an 

25 agreement, other than a contract, cooperative agreement, 

26 or grant agreement, with a non-Department entity that 


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1 principally operates in the United States, to conduct ac2 tivities associated with basic or applied research, proto3 typing, or production deployment, if— 

4 ‘‘(1) the Senior Procurement Executive of the 

5 Department has determined that a contract, cooper6 ative agreement, or grant agreement is not feasible 

7 or appropriate; and 

8 ‘‘(2) the cost to the United States to carry out 

9 such agreement does not exceed— 

10 ‘‘(A) $10,000,000 (including all options); 

11 or 

12 ‘‘(B) a greater amount that the Senior 

13 Procurement Executive determines appropriate. 

14 ‘‘(b) LIMITATION.—The only kinds of research on 

15 human embryonic stem cells that may be conducted pursu16 ant to an agreement under this section are the following: 

17 ‘‘(1) Research involving the derivation and use 

18 of human embryonic germ cells from fetal tissue 

19 that complies with— 

20 ‘‘(A) sections 498, 498A, and 498B of the 

21 Public Health Service Act (42 U.S.C. 289g, 

22 289g–1, 289–2); 

23 ‘‘(B) title 45, Code of Federal Regulations, 

24 part 46, subpart B; 


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1 ‘‘(C) applicable regulations of the Food 

2 and Drug Administration; and 

3 ‘‘(D) any other applicable Federal, State, 

4 or local law. 

5 ‘‘(2) Research on existing human embryonic 

6 stem cell lines in accordance with criteria established 

7 by the Director of the National Institutes of Health. 

8 ‘‘(c) REIMBURSEMENT.—Any amounts received by 

9 the Secretary under this section shall be used to reimburse 

10 the accounts from which funds were used to incur the ex11 penses of carrying out this section. 

12 ‘‘(d) REPORTING; TRANSPARENCY.—The Secretary 

13 shall— 

14 ‘‘(1) submit to the appropriate congressional 

15 committees— 

16 ‘‘(A) a copy of each determination under 

17 subsection (a)(1); 

18 ‘‘(B) not less than twice each year, a re19 port on agreements made under this section; 

20 and 

21 ‘‘(C) upon request, any information re22 garding an agreement made under this section; 

23 and 

24 ‘‘(2) ensure that the terms of an agreement 

25 under this section permit the Comptroller General of 


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1 the United States to examine the records relating to 

2 such agreement of— 

3 ‘‘(A) an entity that enters into such an 

4 agreement; or 

5 ‘‘(B) an entity that otherwise participates 

6 in the performance of such agreement. 

7 ‘‘(e) GUIDANCE.—The Senior Procurement Executive 

8 shall issue guidance regarding an agreement under this 

9 section. 

10 ‘‘(f) DEFINITIONS.—In this section: 

11 ‘‘(1) The term ‘appropriate congressional com12 mittees’ means the following: 

13 ‘‘(A) The Committees on Veterans’ Affairs 

14 of the House of Representatives and the Sen15 ate. 

16 ‘‘(B) The Subcommittees on Military Con17 struction, Veterans’ Affairs, and Related Agen18 cies of the Committees on Appropriations of the 

19 House of Representatives and the Senate. 

20 ‘‘(2) The term ‘Senior Procurement Executive’ 

21 means the official of the Department designated 

22 under section 1702(c) of title 41.’’. 

23 (2) CLERICAL AMENDMENT.—The table of sec24 tions at the beginning of such chapter is amended 

25 by adding at the end the following: 


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‘‘SUBCHAPTER VI—INNOVATION

‘‘Sec. 7391. Office of Innovation. 

‘‘Sec. 7392. Hiring authorities. 

‘‘Sec. 7393. Acceleration fund. 

‘‘Sec. 7394. Agreements with non-Department entities for access to key 

assets of the Department. 

‘‘Sec. 7395. Advance market commitments. 

‘‘Sec. 7396. Other transactional authorities. 

1 (c) CONFORMING AMENDMENT.—Section 7361 of 

2 title 38, United States Code, is amended— 

3 (1) in subsection (a), by striking ‘‘either re4 search or education or both research and education’’ 

5 and inserting ‘‘research, education, or innovation 

6 under subchapter VI of this chapter, or any com7 bination thereof’’; and 

8 (2) in subsection (b)(1), by striking ‘‘research, 

9 education, or both’’ and inserting ‘‘research, edu10 cation, or innovation under subchapter VI of this 

11 chapter, or any combination thereof’’. 

12 (d) IMPLEMENTATION.—Not later than 120 days 

13 after the date of the enactment of this Act, the Secretary 

14 of Veterans Affairs shall carry out the amendments made 

15 by this section. 

Æ 


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