U.S. GOVERNMENT PUBLISHING OFFICE

31–342 WASHINGTON : 2019

DRAFT LEGISLATION, THE ASSET AND INFRASTRUCTURE REVIEW ACT OF 2017, AND H.R. 

2773, TO AUTHORIZE THE SECRETARY OF VETERANS AFFAIRS TO SELL PERSHING HALL 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

THURSDAY, OCTOBER 12, 2017 

Serial No. 115–34 

Printed for the use of the Committee on Veterans’ Affairs 

( 

Available via the World Wide Web: http://www.govinfo.gov 

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(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

DAVID P. ROE, Tennessee, Chairman 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

AMATA COLEMAN RADEWAGEN, American 

Samoa 

MIKE BOST, Illinois 

BRUCE POLIQUIN, Maine 

NEAL DUNN, Florida 

JODEY ARRINGTON, Texas 

JOHN RUTHERFORD, Florida 

CLAY HIGGINS, Louisiana 

JACK BERGMAN, Michigan 

JIM BANKS, Indiana 

JENNIFFER GONZALEZ-COLON, Puerto 

Rico 

TIM WALZ, Minnesota, Ranking Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

KATHLEEN RICE, New York 

J. LUIS CORREA, California 

KILILI SABLAN, Northern Mariana Islands 

ELIZABETH ESTY, Connecticut 

SCOTT PETERS, California 

JON TOWERS, Staff Director 

RAY KELLEY, Democratic Staff Director 

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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(III) 

C O N T E N T S 

THURSDAY, OCTOBER 12, 2017 

Page 

Draft Legislation, The Asset And Infrastructure Review Act Of 2017, And 

H.R. 2773, To Authorize The Secretary Of Veterans Affairs To Sell Pershing 

Hall ........................................................................................................................ 1 

OPENING STATEMENTS 

Honorable David P. Roe, Chairman ....................................................................... 1 

Honorable Tim Walz, Ranking Member ................................................................ 3 

WITNESSES 

The Honorable Mike Coffman, U.S. House of Representatives, 6th District; 

Colorado ................................................................................................................ 5 

Prepared Statement ......................................................................................... 37 

Joy J. Ilem, National Legislative Director, Disabled American Veterans 

(DAV) ..................................................................................................................... 12 

Prepared Statement ......................................................................................... 37 

Louis J. Celli Jr., Director, Veterans Affairs and Rehabilitation Division, 

The American Legion ........................................................................................... 13 

Prepared Statement ......................................................................................... 42 

Carl Blake, Associate Executive Director of Government Relations, Paralyzed 

Veterans of America (PVA) ................................................................................. 15 

Prepared Statement ......................................................................................... 46 

Carlos Fuentes, Director, National Legislative Service, Veterans of Foreign 

Wars of the United States (VFW) ....................................................................... 17 

Prepared Statement ......................................................................................... 49 

Dave Wise, Director, Physical Infrastructure Team, U.S. Government Accountability Office (GAO) .................................................................................... 18 

Prepared Statement ......................................................................................... 51 

Regan L. Crump MSN, DrPH, Assistant Deputy Under Secretary for Health 

for Policy and Planning, Veterans Health Administration, U.S. Department 

of Veterans Affairs ............................................................................................... 20 

Prepared Statement ......................................................................................... 60 

Accompanied by: 

James M. Sullivan, Director, Office of Asset Enterprise Management, 

U.S. Department of Veterans Affairs 

STATEMENTS FOR THE RECORD 

Concerned Veterans for America (CVA) ................................................................ 62 

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(1) 

DRAFT LEGISLATION, THE ASSET AND INFRASTRUCTURE REVIEW ACT OF 2017, AND H.R. 

2773, TO AUTHORIZE THE SECRETARY OF 

VETERANS AFFAIRS TO SELL PERSHING 

HALL 

Thursday, October 12, 2017 

COMMITTEE ON VETERANS’ AFFAIRS, 

U. S. HOUSE OF REPRESENTATIVES, 

Washington, D.C. 

The Committee met, pursuant to notice, at 10:30 a.m., in Room 

334, Cannon House Office Building, Hon. David P. Roe, [Chairman 

of the Committee] presiding. 

Present: Representatives Roe, Bilirakis, Coffman, Wenstrup, 

Bost, Poliquin, Dunn, Arrington, Rutherford, Higgins, Bergman, 

Banks, Walz, Takano, Brownley, Kuster, O’Rourke, Correa, and 

Esty. 

OPENING STATEMENT OF DAVID P. ROE, CHAIRMAN 

The CHAIRMAN. Good morning. The Committee will come to 

order. 

I want to thank you all for joining us today for this Full Committee legislative hearing. 

Before I continue, I want to tell my friends from California that 

hopefully we will have a vote later on today and send some resources out for the awful fires that are going on. I experienced 

those a year ago in Gatlinburg, in Sevier County, Tennessee, where 

we lost 2500 homes and 14 lives. It is astounding what is happening there. 

So I just wanted to pass that along to you all that are in California, if there is any way we can help, we are willing to help. I 

have been down that road. 

This morning we will be focusing on two pieces of legislation: the 

draft Asset and Infrastructure Review, or AIR Act of 2017; and 

H.R. 2773, a bill to authorize the sale of Pershing Hall in Paris, 

France. 

Since Representative Coffman will be speaking shortly on H.R. 

2773, which he sponsors, I will contain my comments to the draft 

bill that Ranking Member Walz and I have been working on together. 

Exactly three months ago today, we held a Full Committee hearing to examine concerns regarding the Department of Veterans Affairs Capital Asset Program and alignment, or misalignment, as 

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the case may be, of the VA medical facilities and the veteran patient population. 

I came to that hearing familiar with the numerous challenges VA 

was facing with regard to managing an increasingly unmanageable 

real estate portfolio. In fact, I was so aware of those challenges I 

had already decided that taking action to address was going to be 

one of my top priorities as Chairman, yet that hearing was alarming even to me as VA’s own testimony noted that the majority of 

VA’s facilities have outlived their useful life cycle. 

A couple weeks ago, I traveled to Northport, New York to meet 

with staff at the Northport VA Medical Center. The Northport VA 

Medical Center is a 90-year-old facility on a sprawling medical 

campus that struggles with significant maintenance issues and 

costs, despite dozens of mothball buildings. The condition of that 

facility has gotten so bad that some veterans claim they can no 

longer seek care safely there; instead, travel from Northport to 

New York City to visit the VA facilities there. 

After visiting Northport, I went to Canandaigua, New York to 

visit the Canandaigua VA Medical Center and the Veterans Crisis 

Line, which is housed there. The Canandaigua VA Medical Center 

is an 84-year-old facility that sits on a 150-acre campus in the middle of a residential neighborhood. However, the majority of veteran 

patients in Canandaigua’s catchment area seek care to the VA community-based outpatient clinic about 30 miles away in Rochester, 

New York. That clinic is nearly busting at the seams from high utilization, while the Canandaigua VA Medical Center largely sits 

empty. 

At both Northport and Canandaigua, I saw firsthand the consequences of outdated and oversized medical campuses that struggle to maintain current standards of care without significant backbending. And we wonder why the VA health care system has struggled to provide care that meets the highest access and quality 

standards, and that is why Ranking Member Walz and I are working together on this draft of the AIR Act. 

This legislation would require the Secretary to develop criteria to 

access and recommend changes to VA Medical Centers. That criteria would be published on the Federal Register, subject to a 30- 

day public comment period, and would be required to take into account a number of factors, including access to care, the capacity of 

the local health care market, input from local veteran and stakeholders, and potential costs and savings. 

The legislation would also establish an 11-member Asset and Infrastructure Review Commission that would use the criteria established by the Secretary and the recommendations for action made 

by the Secretary to develop a report containing findings and recommendations for the modernization and realignment of VA medical facilities. 

Should the commission find that any of the Secretary’s recommendations deviate substantially from the Secretary’s criteria 

and a change is needed, the commission would be required to publish a notice of proposed change in the Federal Register and conduct public hearings in the local community on the proposal of 

changes? 

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Once finalized, the commission’s report would be transmitted to 

the President and, contingent upon his approval, to the Congress. 

Should Congress disagree with the commission’s recommendations, 

we would have 45 days to issue a joint resolution of disapproval. 

Absent that, VA would be required to begin implementing the recommendations. 

This draft bill has been circulated with VA and with the VSOs, 

and was subject to a Full Committee roundtable in early September. Since then, I have met individually with many Members 

from both sides of the dais to discuss this language and the intent 

behind it, and how it aligns with ongoing efforts to course-correct 

VA’s many care in the community programs. 

That said, this bill is just a draft, and I understand that there 

are still a number of concerns and questions about it, particularly 

with regard to the timeline, the composition of commissioners, and 

the involvement of veterans and advocates. I appreciate the many 

thoughtful comments made in the written statements prepared for 

today’s hearing by our VSO witnesses and I look forward to incorporate many of their suggested changes in the coming days. 

I intend to also incorporate provisions in this bill prior to its introduction to increase the threshold of minor construction projects 

and expand enhanced use lease authority. 

Both of those changes have been discussed by this Committee before and have been requested by the Administration, and have the 

support of the VSOs. 

Yet even with those changes, it is an understatement to say that 

the deck is stacked against the AIR Act. This bill is bold, transformative, and controversial. Moving forward with it will require a 

significant amount of political courage and, let’s face it, Members 

are not known specifically for that. That said, veterans, VSOs, and 

VA employees and taxpayers alike deserve more from each of us 

and to recognize how serious the problem before us is and to fail 

to act now to institute a solution. 

As Ranking Member Walz wisely noted at our hearing in July, 

‘‘We can no longer kick this can down the road, Coach, because 

time is not on our side in this battle.’’ 

And as Representative Rice said, if there is any Committee in 

Washington, D.C. that has the political courage to do what is necessary, it is this one. The AIR Act is necessary. 

I will now yield to Ranking Member Walz for any opening statements that he might have. 

OPENING STATEMENT OF TIM WALZ, RANKING MEMBER 

Mr. WALZ. Well, thank you, Mr. Chairman. 

And to our witnesses, thank you all for being here. I do think, 

maybe someday looking back, this could be a very pivotal hearing. 

I would echo the Chairman’s statements; this is bold. I have not 

changed my opinion that we need to address this. 

I would note that there has been, and I think rightfully so, some 

folks commenting on the effectiveness of this Committee and the 

Chairman’s leadership is no small part of that. Those who said we 

have been tackling the easy stuff, remember how appeals started, 

remember how accountability started, remember how Choice and 

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Choice reform started, and remember the GI Bill statement. Some 

of us are still friends after that fight, but it took a lot. 

What it shows is, it shows the courage, and this is why the Members are sitting here, you came here to do this. You came here to 

legislate, you came here to have healthy disagreements, you came 

here with the confidence that we could try and find some things together, and this is a starting point. 

I would like to note a few things in this. We are working sideby-side in this, but it is a journey and it is going to be a tough one. 

And the witnesses, you are going to come and you are going to 

present your testimony. You were there at the roundtables. We can 

do this, but it is going to have to be done in that confidence and 

that trust that we have done some of these other things. 

So providing the Secretary the authority to support his needs to 

assess and ultimately realign VA is one of this Committee’s top priorities. However, I do not think any of us should forget the highest 

of priorities within the Committee is ensuring veterans have access 

to receive the highest quality services, health care, and benefits. 

No one disagrees with the need to modernize the VA’s infrastructure and build community partners where it makes the most sense 

for veterans and taxpayers. I pulled out a statement I made sitting 

down on this corner in February of 2007 where I was calling for 

a quadrennial defense review to align assets and needs that it did 

not understand where we were going. I remember sitting there saying, we could be sitting here in 10 years in 2017 and still not have 

an understanding of where we are going. So I think all of us get 

that part. I do not think we are there yet. 

As the legislation is written, I think it takes a picture, a snapshot of VA infrastructure, and to make a decision on going forward 

on that is going to have decades-long impact. We need more than 

a snapshot; we need to develop a process that VA can use to continually make decisions on an annual basis to ensure access gaps are 

identified and filled early. 

I also think, folks, whenever we talk about this, and it is something we should always be striving for, is the belief that it is going 

to be a cost saver. I think the belief is based on the fact that we 

hear about the 1,400 vacant buildings or under-utilized buildings. 

Most of these are not buildings that provide care for veterans. By 

my count, fewer than 20 of the 1,400 buildings scheduled for disposal in fiscal year 2018 provide direct care to veterans, while more 

than 70 buildings are old hospital staff residences. 

What is missing I think from the conversation so far is the fact 

that every single VISN there are significant utilization gaps in outpatient care space and there is an excess in inpatient care space. 

What does that mean? It means we have empty bed towers at too 

many facilities, but at the same veterans are waiting in line to receive modernized outpatient care. The issue deserves serious attention. I commend the Chairman and everyone here for their willingness to face this challenge. 

The legislation in its current form has more work to do. While 

we stated this is a draft bill and a starting place, we need to start 

making changes to the language. Other concerns we have is the 

timeline, the fact that the Secretary can deliver recommendations 

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to the commission before the enactment of a permanent solution to 

consolidating community-based care is implemented. 

And most concerning to me, and I say this now, I would say it 

in 4 years, I would say it in 8 years, is the power of the President 

at the end of the process. If he or she disapproves of the recommendations, the commission ends without further action. If he 

or she approves the recommendations, regardless of Congress or 

stakeholders’ agreement, by simply not signing the joint resolution 

of disapproval the recommendations will still be enacted. 

We agree, status quo is not the answer, but I have deep reservations about this if we do not have answers to earlier questions. 

Mr. Chairman, I will state it again: your leadership and guidance 

continues to move us ahead. Your boldness in stepping through political land mines to try and solve problems is one that I admire 

greatly. 

I ask now that we have set the plate, we have brought the people 

to the table, we are prepared to now start having that serious discussion about how do we put that template in place that allows a 

tool for VA to move forward, how do we get a quadrennial defense 

review or a quadrennial VA review that starts to move us there, 

and how is the process still with these Members in this room having more of the power to be able to move that forward. 

So, Mr. Chairman, I thank you. I look forward to the testimony 

of our witnesses and the engagement of all Members. 

The CHAIRMAN. I thank the gentleman for yielding. 

And joining us on our first panel, although testifying from the 

dais this morning, is our friend and colleague and fellow Committee Member, the Honorable Mike Coffman of Colorado. 

Mr. Coffman, you are now recognized for 5 minutes. 

STATEMENT OF HONORABLE MIKE COFFMAN 

Mr. COFFMAN. Thank you, Mr. Chairman. 

I would like to begin by thanking you for including my bill in today’s legislative hearing and thank the witnesses for their testimony. 

Mr. Chairman, I think we can all agree that the VA’s sole mission is to provide services to our Nation’s veterans. The maintenance of a 5-star, 24-room boutique hotel, restaurant, and club in 

downtown Paris, France is clearly not included in that description. 

Therefore, in an effort to get the VA out of the overseas hotel 

business and focused on its core competencies, I introduced H.R. 

2773, the Sell Excess Luxury Lodging, the SELL Act, to authorize 

the sale of this hotel, Pershing Hall. 

Pershing Hall is a building originally procured by The American 

Legion to serve as a memorial to our ‘‘Doughboys,’’ who served in 

France during World War I. The building was transferred to the 

VA in 1991, and in 1998 the VA leased Pershing Hall for a 99-year 

period to a French firm that redeveloped the property as a luxury 

hotel. 

In recognition of the historic aspects of Pershing Hall, H.R. 2773 

requires the preservation of architectural details of the exterior and 

interior of the structure, and requires all property of General Pershing and the American Expeditionary Forces in France during 

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World War I to be transferred to the American Battle Monuments 

Commission. 

H.R. 2773 also appropriately requires the transfer of sale proceeds to the American Battle Monuments Commission for the 

maintenance of cemeteries, monuments, and memorials dedicated 

to our men and women in uniform. 

Mr. Chairman, today you will hear the concern that the fair market value will not represent the true value of the property because 

it is encumbered by the VA’s lease agreement. Unfortunately, the 

reality is that the VA negotiated a bad long-term deal that significantly decreased the market value of the property. Even more reason to get the VA out of the hotel business. 

To address this concern, I plan to amend my legislation to require a condition of the sale be the appraised value of the property 

versus the market value. So that what the market value is, we 

have this horribly negotiated, really below-market lease agreement 

that in a market value assessment will only reflect the income of 

the property, this lease agreement. So it would be a windfall to the 

lessee, who would be the only one who could purchase it, because 

they would say that they are not going to—that they want the 

lease agreement continued and so to reflect again that lower income that would reflect the market value of the property. 

What we want to do, what I want to do is to change it to appraised value. An appraised value would not reflect that lease 

agreement. 

And so there would be under two circumstances that it would be 

sold, certainly not guaranteed. One would be that the lessee realizes that the future appreciation of the value is significant enough 

that it is good to lock in the value now, lock in the appraised value 

now and go ahead and buy the property despite this below-market 

lease agreement, or it would be another buyer who would negotiate 

with the lessee to buy out the lease agreement contingent upon the 

purchase of the sale of the, the buyer of the property. Those are 

the both circumstances. 

And so I think it would be, although I want to get the VA out 

of the luxury hotel management business, I think that, you know, 

there has to be a fair price to the taxpayers of the United States. 

While Pershing Hall is probably a terrific hotel, it makes no 

sense that VA keeps a luxury hotel in Paris on its books. The VA 

needs to focus its time and resources on its core mission, taking 

care of our Nation’s veterans. 

Mr. Chairman, thank you for allowing me to testify today on behalf of this legislation and I yield back the remainder of my time. 

[THE PREPARED STATEMENT OF MIKE COFFMAN APPEARS IN THE

APPENDIX]

The CHAIRMAN. I thank the gentleman for yielding. 

I just have one very quick question, is that when this was leased, 

this 99-year lease signed? And then, I guess, why in the world 

would you have signed a 99-year-old lease? 

Mr. COFFMAN. Sir, I think we have the VA here, but I believe 

that it was done, let’s see, in 1998, as I understand it correctly, 

that the lease was signed. 

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The CHAIRMAN. I don’t think any of us are going to be around 

when the lease is up. 

I now yield to Mr. Walz. 

Mr. WALZ. Well, this one too has always been one when it comes 

up, it is kind of hard to wrap your mind around this. 

I do note The American Legion’s positions on the historic nature 

of this, their involvement in it. The importance of the Pershing artifacts in World War I, especially as we are in the centennial year 

of World War I. So I am kind of interested to hear those reports, 

but I appreciate the gentleman—look, I certainly have no idea why 

we run a hotel and a 99-year lease. I think it is probably the transition here is what we are getting after and making sure we get 

that right. 

So I yield back. 

The CHAIRMAN. I thank the gentleman for yielding. 

Mr. Bilirakis, you are recognized. 

Mr. BILIRAKIS. No questions. 

The CHAIRMAN. Mr. Takano, you are recognized. 

Mr. TAKANO. I am certainly interested as a former high school 

teacher, both English and social studies, about the historical significance of this building. I think World War I had enormous consequences that we are still feeling today, the high percentage of nationalism that we are experiencing around the world was certainly 

present during World War I, and I am wary of us erasing physical 

landmarks of such a consequential war. And we are 100 years 

away from it, but I am always mindful that we have to be constantly reminded about the history and history that gets forgotten 

by generations. 

So I am interested to hear what The American Legion has to say 

about their views on this matter. 

I yield back. 

The CHAIRMAN. I thank the gentleman for yielding. 

Mr. Coffman has already spoken. Do you have any—Dr. 

Wenstrup? 

Mr. WENSTRUP. Nothing at this time. I yield back. 

The CHAIRMAN. Ms. Brownley? 

Ms. Brownley yields. 

Mr. Bost? 

Ms. Kuster? 

Ms. KUSTER. Thank you, Mr. Chairman. 

I just want to speak on behalf of H.R. 2773, a bill to authorize 

the sale of Pershing Hall, and join my colleague Mr. Coffman. 

Last year, I accompanied Mr. Coffman to a field hearing in Aurora, in Colorado, when, as you all know, the construction of the 

VA hospital in Aurora led to significant cost overruns, overruns 

that were unacceptable to Mr. Coffman and myself and all Members of the Committee. So at that time I joined Mr. Coffman in a 

version of this bill last year. 

While the Aurora project no longer needs the funds from the sale 

of Pershing Hall, it has become clear to me that the VA should not 

be in the business of managing properties like a luxury hotel in 

Paris, France. But unfortunately, as Mr. Coffman has outlined, the 

current lease demonstrates exactly why the VA should not be managing properties like hotels, entering into a 99-year lease with a 

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French hotel company in exchange for renovations. As a result, if 

the VA sold this property today, we would receive a small fraction 

of the $80 million appraised value of the property. 

So consequently, I support Mr. Coffman’s proposal to amend the 

legislation to include as the appraised value as a condition of the 

sale of Pershing Hall and I urge my colleagues to support his 

amendment in this legislation. 

And I yield back. 

The CHAIRMAN. I thank the gentlelady for yielding. 

Mr. Poliquin, you are recognized. 

Mr. POLIQUIN. We have so many problems now in this Government and the primary responsibility of the VA is to care for those 

that are coming back from the battlefield, we should not be in the 

luxury hotel business in Europe. 

The CHAIRMAN. The gentleman yields back. 

Mr. Correa, you are recognized—oh, Mr. O’Rourke, I’m sorry. 

Okay. Dr. Dunn, you are recognized. 

Mr. DUNN. Thank you, Mr. Chairman. 

I wanted to understand, so I was doing a little math here, do we 

have about 70 years left on this lease, is that correct? About right, 

that is about right. And is the penalty on that to pay back the entire 70-year lease if we sell the property? 

Mr. COFFMAN. Well, if you were going to breach the lease agreement, I am sure what—maybe VA could comment—clearly there is 

going to be a penalty as, you know, you would sort of discount, it 

would be a discounted rate, but that is why I think moving to the 

appraised value. 

And so, again, it is probably the lessee that could buy it if they 

assume that there is going to be a lot of appreciation to the hotel 

and it is best to lock it in now. Or it is going to be, again, somebody 

who is going to negotiate a buyout of that lease agreement and 

then buy the property to the appraised value. 

The CHAIRMAN. The gentleman yields back. 

Mr. Correa, you are recognized for 5 minutes. 

Mr. CORREA. Thank you, Mr. Chairman. 

First of all, I want to thank you very much for your thoughts and 

prayers regarding our fires in California. Southern California Fire 

is probably within a mile or 2 of my district, some of the evacuation 

sites are actually in my district. My friends and neighbors, some 

of my staffers have been evacuated from some of those areas. And 

we do pray for those that have been affected and we pray that the 

firefighters are able to stop these fires as quickly as possible. 

In reference to Mr. Coffman’s bill, I just want to say I join you 

in supporting your bill. We should not be in the business of managing hotels, but we should be in the business of managing taxpayer resources, and it sounds like we got snookered here. It is 

something that is not unusual and I would say the VA has to figure 

out how to manage these assets like any other professional real estate management company would do. 

Our job, on my opinion here, first and foremost, like has already 

been said, is to make sure we take care of our moral obligation to 

our veterans and that everything we do is for the benefit of our veterans. A lot of times in this Nation, the issue becomes resources. 

Where do you get the money to take care of our veterans in the 

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proper way? The big expense, real estate, typically, when it comes 

to delivering the resources. As we look at assessing these real estate assets that we have, taxpayer-owned, let’s not look at just 

today, but look at tomorrow. 

I know we had a study group here, right over there. I looked at 

a map and one of those maps showed some of the real estate being 

located in the Inland Empire, just east of where my district is. 

Under-utilized today, but I will tell you, that is the fastest growing 

region in California and probably the United States. And I guarantee you, in 20 to 30 years, if we sell those resources today, 20 

to 30 years from now, we are going to be kicking ourselves and saying this is where we need to put VA resources, VA clinics that take 

care of our veterans. 

So let’s have a little bit of vision here and let’s be good stewards 

of real estate assets that are owned by taxpayers. 

If you look at life insurance companies, they invest for the long 

term, because when they have to sell is when those folks die, that 

means 20 to 30 years out they have got to have the resources to 

pay on those life insurance companies. We should do the same 

thing, which is we know veterans, we have to take care of those 

veterans 20, 30, 40 years out. So let’s start thinking like life insurance companies, real estate investment management companies do. 

We are looking at a BRAC-closure kind of a plan here. 

Let me tell you about El Toro Military Base in Orange County. 

It broke my heart when we closed it down. The Government invested $900 million upgrading that base. The next year, through 

the BRAC process, we decided to close it down. El Toro, 5,000 acres 

in the middle of Orange County, tremendous value, a great real estate play. Let me tell you, when we closed it down, we should have 

thought, again, what is number one? Taking care of our vets. 

Let me tell you what happened recently. The veterans came together in Orange County and said we want a veteran’s cemetery 

in Orange County, so we won’t have to go so far to visit our veterans that have made the ultimate sacrifice, deceased veterans. We 

fought hard to get 125 acres. The City of Irvine later on reconsidered and said, you only get 25 acres. Five thousand to 125 to 25 

acres. We finally got them to give us 125 acres for a veteran’s cemetery. 

The lesson? Once you let go of control of our government resources, they are no longer under our control. 

So, again I would ask, go slow, Mr. Chairman; be methodical, be 

very careful, carefully weigh the benefits as to how these resources 

can best be used for the benefit of our veterans. And, finally, the 

process has to be very transparent. Let’s make sure that our veterans are front and center, that they are part of the decision-making process. 

Mr. Chair, I yield. 

The CHAIRMAN. I thank the gentleman for yielding. I am a Methodist, so we do everything very methodical and slow. 

[Laughter.] 

The CHAIRMAN. So, Mr. Higgins, you are recognized for 5 minutes. 

Mr. HIGGINS. Thank you, Mr. Chairman. 

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I concur that we agree on a bipartisan manner, and with the cooperative and respectful communications of the VSOs that we listen very carefully to as we move forward to streamline the VA and 

reform the expenditures of the people’s Treasury. And to look carefully at these properties that are under-used, under-utilized, some 

of them need to go away. 

Regarding the Pershing facility being operated as a hotel, the 

term ‘‘appraised value’’ is being used. This is a business being operated as a profitable business and in the sale of any business the 

consideration of what is referred to as blue sky is generally considered to be part of the appraised value. In other words, not just the 

physical structure and the assets therein, but what is the value, 

how much money has the thing been making? And blue sky is generally considered for 5 years as added to the value of the property. 

So I would suggest that this also be a part of the formula as we 

consider the sale of this property. As reflective of the sale of any 

real estate and as some sort of a common, you know, transaction 

that takes place every day many, many times across the country, 

that the blue sky should be considered as part of the value of that 

property. 

So that would be my only concern. I concur that we need to get 

out of the hotel business and it is probably a good idea to sell the 

property, but I would just say that we should squeeze every dime 

we can out of that for the betterment of the veterans that we serve. 

And with that, I yield back. 

The CHAIRMAN. I thank the gentleman for yielding. 

Let’s see, General Bergman, you are recognized for 5 minutes. 

Mr. BERGMAN. Thank you, Mr. Chairman. 

Jim Collins, a great author, talks about the three most important 

things any business that is going to become great needs to do every 

year: you need to fairly evaluate what it is that you are doing that 

you need to keep doing, you need to evaluate what you are not 

doing that you need to start doing, and the biggest challenge to 

any, any entity is to stop doing things that no longer add value to 

your mission, your core business mission. 

So having said that, as we look at the VA and trying to help 

them focus their efforts on the veterans, and focus on the veterans 

on their future needs, without wasting very valuable and very limited resources on things that we don’t need to be doing anymore, 

I wholly support the getting out of the Parisian hotel, boutique 

hotel business, because we have limited resources, limited time, 

limited everything to do the right thing for the veterans. So I fully 

support this. 

I yield back. 

The CHAIRMAN. I thank the gentleman for yielding. 

Mr. Banks, you are recognized for 5 minutes. 

The gentleman yields. 

Mr. Arrington, you are recognized for 5 minutes. 

Mr. ARRINGTON. Mr. Chairman, I just make a general statement 

that I agree with my colleagues that we need to align assets and 

resources according to the core mission of the VA, and we need to 

make sure that we are also aligning them with the demand, where 

there is need, just like every other organization. And if we don’t do 

that, then we are not being good stewards of the taxpayer dollar. 

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And I commend you for the process; it needs to be objective, it 

needs to be fact-based, and we need to remove it from the politics, 

the parochial politics of protecting our single-Member-district-type 

interest, I think that is not healthy. This should be American taxpayer and American veteran first and we drive on this. 

So I commend you for your leadership and I wholeheartedly support Mr. Coffman and his efforts on this regarding the Pershing 

hotel. I don’t know why we would be in that business. So, thanks 

for your hard work and I support you on that. 

The CHAIRMAN. I thank the gentleman for yielding. 

Mr. Coffman, do you have any final comments? 

Mr. COFFMAN. Yes, Mr. Chairman. On this bill to align demand 

with our current infrastructure and make those appropriate 

changes, I want to thank you for your leadership, as well as Mr. 

Walz on this particular issue. 

And I will say, when I grew up in Aurora, Colorado, which is the 

heart of my district, it was a military town with three military installations in it. Two were closed, an Army and an Air Force base 

in successive BRACs, and as a community member I have fought 

that BRAC process as hard as I could. But I can tell you, the economic development that has occurred since those closures is greater than what we had received when those bases were operational 

relative to the economic impact on our respective community. 

I yield back, Mr. Chairman. 

The CHAIRMAN. I thank the gentleman for yielding. 

And just one final comment before we introduce our next panel. 

I think Mr. Takano made some good points about not forgetting the 

history and the Legion made some good points when I read their 

testimony. So I think we need to be sensitive and aware of that, 

that history, I agree. I don’t know how it will all work out yet, but 

I do think you make good points with what you said historically 

about what we are trying to maintain also and let’s not forget what 

happened in World War I. So I think I will need to think through 

it some more. 

I want to thank you, Mr. Coffman, for your testimony. And with 

no other questions, we will introduce our second panel. 

Joining us are Joy Ilem, the National Director for the Disabled 

American Veterans. Welcome. Mr. Louis Celli, the Director of Veterans Affairs and Rehabilitation Division of The American Legion; 

Carl Blake, the Associate Executive Director for Government Relations for Paralyzed Veterans of America. Welcome. Carlos 

Fuentes—and I thought we were going to have to send out a search 

dog for you this morning when you weren’t there—the Director of 

the National Legislative Service for the Veterans of Foreign Wars 

of the United States. Dave Wise, the Director of Physical Infrastructure Team for the U.S. Government Accountability Office. Dr. 

Regan Crump, the Assistant Deputy Under Secretary for Health 

for Policy and Planning, for Veterans Health Administration of 

U.S. Department of Veterans Affairs, who is accompanied by James 

Sullivan, the Director of VA’s Office of Asset Enterprise Management. 

Ms. Ilem, we will begin with you. You are now recognized for 5 

minutes. 

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STATEMENT OF JOY J. ILEM 

Ms. ILEM. Thank you, Chairman Roe. Ranking Member Walz, 

Members of the Committee, on behalf of DAV, thank you for the 

opportunity to testify today on the draft Asset and Infrastructure 

Review legislation under consideration by the Committee. 

For years, DAV, along with our independent budget partners, 

has consistently called for resolving VA’s many infrastructure challenges, including aging and outdated medical and research facilities, consistent under-funding for major and minor construction 

and critical maintenance needs, as well as problematic leasing and 

sharing authorities. 

While we do not believe the BRAC-like model proposed in the 

draft bill is the most appropriate way to address VA’s capital infrastructure needs, we do acknowledge the need for a strategic national plan and a comprehensive infrastructure review and assessment prior to modernization or realignment of the Department’s 

medical facilities. 

Rapid advancements in medicine and significant changes in the 

way health care is delivered today, as well as changes in veterans’ 

needs and preferences and demographics, require a more nimble 

and flexible process that allows VA to make changes when necessary to ensure the delivery of high-quality health care and specialized services throughout the system. However, we do not believe 

Congress should consider systemic changes to VA’s health care infrastructure in isolation from other critical factors. Most importantly, without first finalizing decisions on the reform of the Choice 

program and development of regional integrated networks that 

would combine VA and community care options for veterans. 

The 2016 Commission on Care Report concluded and we concur, 

real transformation of the VA health care system will require a 

comprehensive and integrated systems approach. 

For successful reform of the system, the Department must also 

address several other critical, interrelated challenges, to include 

modernization of its health care IT system and electronic health 

record; improvements in HR policies to fill staff vacancies more 

rapidly, steadily increasing demand for services, and existing challenges to provide veterans convenient access to care in rural communities; all of which have significant budgetary implications. 

Rather than establishing a BRAC-like, one-time asset review 

process, we believe VA would be better served by establishing a 

standardized, long-term process that includes local involvement, 

periodic ongoing reviews, a realistic plan for upkeep and maintenance costs, and the authority for the Department to more easily 

make changes as demand for care and market conditions shift over 

time. 

Mr. Chairman, my written statement includes a number of recommended changes to the bill and I will highlight just a few that 

we feel are most critical. 

We recommend extension of the overall timeline to ensure a thorough and effective asset review process can be conducted; inclusion 

of provisions for early and more meaningful stakeholder input to 

ensure veterans understand any proposed changes and to build 

support; that information transmitted to the Commission, Congress 

or the President also be made available to the public; that facility 

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recommendations be carried out in several phases, first focusing on 

buildings and properties that are currently unused or significantly 

under-used, then considering market assessments and more comprehensive alignments only after decisions have been made regarding Choice reforms. 

The market assessments should include options for expanding 

VA’s internal capacity where appropriate through extended hours 

of operation or by increasing staff or space. 

We also recommended that no VA facility should be closed until 

a replacement facility is opened or an arrangement with community partners has been secured and established, so that no enrolled 

veteran ever loses access to care. 

Finally, DAV strongly believes that any commission established 

affecting the future of VA health care must first and foremost represent the veteran users of that system. For these reasons, we recommend the commission include at least six members who are current users of the VA health care system and that three of those 

members represent congressionally-chartered membership and resolution-based service organizations. 

Mr. Chairman, in closing, DAV is committed to working with you 

and the Committee to achieving our shared goals of improving VA 

health care services for our Nation’s ill and injured veterans. 

That concludes my statement and I am happy to answer any 

questions you or the Committee Members may have. 

[THE PREPARED STATEMENT OF MS. JOY ILEM APPEARS IN THE APPENDIX]

The CHAIRMAN. Thank you. 

Mr. Celli, you are recognized now for 5 minutes. 

STATEMENT OF LOUIS J. CELLI, JR. 

Mr. CELLI. Well, one thing is absolutely clear, veterans deserve 

a 21st century health care system; a sustainable, reliable, and compassionate system that is able to meet their needs and one that 

veterans can be proud of. 

Chairman Roe, Ranking Member Walz, and Members of this distinguished Committee, on behalf of Commander Denise H. Rohan 

and the millions of veterans making up the largest Veteran Service 

Organization in the Nation, thank you for taking on the challenge 

of modernizing VA’s aging infrastructure. 

Admittedly, this is a complicated process and one that will require a complete assessment of VA’s health care delivery services 

and current physical capabilities. And while The American Legion 

applauds this Committee for addressing VA’s capital needs, we 

want to take this opportunity to underscore what our colleagues, 

Members of Congress, VA, and our members recognize, VA will 

need a complete comprehensive health care market assessment 

VISN by VISN before anyone can offer a responsible assessment or 

recommendation on the modernizing VA’s assets and infrastructure. 

The draft legislation being discussed here today helps get this 

conversation started. And you already have our witness statement 

for the record, so I will just go over some of the points that we will 

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14 

need to refine before The American Legion will be able to fully support this effort. 

First, The American Legion is rarely a fan of congressionally-appointed Committees and this is no different. As highlighted in our 

written presentation, fundamentally we oppose establishing a Committee to oversee this process, but if establishing a Committee or 

a commission becomes a necessary concession to moving forward, 

I cannot stress strongly enough that The American Legion will absolutely not support a commission whereby congressionally-chartered VSOs, the most accurate representation of voices of millions 

and millions of veterans this Committee has access to, are not empowered to have collective veto power over what could turn into a 

runaway committee. 

Again, specifics on how that can be achieved are detailed in the 

testimony you have in front of you. 

Second, the Committee has wrestled with leasing health care facilities over the past several years and, as the Chairman points 

out, there is no better time than now to address this in this legislation. The legislation will certainly miss the mark if we fail to fix 

this leasing issue once and for all. 

Third, while addressing the demographics of the commission, The 

American Legion feels strongly, as DAV does, that the commission 

should be a representation of the current demographic of the average VA patient today and understand what the needs are of the VA 

patient tomorrow will be. 

Next, The American Legion sees no reason the commission 

should need to financially compensate the volunteer committee 

members. The structure of this committee calls for senior level executives and experts that oversee millions of dollars in health care 

infrastructure. If the reward for serving on this committee isn’t 

serving veterans and the honor of participating in a congressionally-appointed committee that reports to Congress and the President of the United States, then perhaps we should reevaluate the 

selection process. 

In the draft legislation, there is a prohibition against former employees of VA who are instrumentally involved in the commission’s 

work. I don’t understand why that provision is in there at all and 

would like to learn more about how that might be a threat to the 

integrity of the process. 

I also want to mention that the seats assigned to congressionallychartered Veterans Services Organizations need to forever remain 

assigned to the organization and not to the appointee. We have 

seen in the past how appointees have undermined this authority by 

accepting an appointment on a visionary committee, only to divorce 

themselves from their organization in favor of their personal opinions, leaving the VSO community without a voice in the process. 

It was shameful and it was unacceptable. 

Finally, with regard to this bill, page 19, line 20(c) needs to 

change to ‘‘The Commission will recommend changes to the Committee on Veterans’ Affairs of the House and Senate.’’ The American Legion adamantly opposes granting the commission unilateral 

authority to change or amend the recommendations of the Secretary. That simply cannot happen under any circumstances. 

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With the remainder of my time, I will address the issue of Pershing Hall in Paris, France. While many Veterans Service Organizations may not have a strong opinion one way or the other regarding Pershing Hall, please understand that this property has historical value and a deeply personal meaning for The American Legion. 

Nearly 100 years ago, the members of the American Expeditionary Forces of World War I came together to preserve the memories and incidents of our associations in the Great Wars. And as 

the 100th anniversary of our founding approaches, The American 

Legion is still dedicated to that mission. 

The American Legion fought for the dedication of the memorial 

in Paris, France, in the city where The American Legion was 

formed, to recognize the service and sacrifices of The American Legion Expeditionary Forces and General John ‘‘Jack’’ Pershing. We 

take this very seriously. 

At a minimum, we should not be able to sort out what should 

immediately happen with this monument today and we look forward to working with Mr. Coffman to work this out. And I just 

want to echo your comments and thank you for recognizing that 

selling this at a fire sale is the wrong thing to do. 

Thank you. 

[THE PREPARED STATEMENT OF LOUIS J. CELLI APPEARS IN THE

APPENDIX]

The CHAIRMAN. I thank the gentleman for yielding. 

Mr. Blake, you are now recognized for 5 minutes. 

STATEMENT OF CARL BLAKE 

Mr. BLAKE. Chairman Roe, Ranking Member Walz, Members of 

the Committee, on behalf of Paralyzed Veterans of America, I 

would like to thank you for the opportunity to testify today. 

PVA has no stated position on the Pershing Hall issue, so I will 

limit my comments to the Asset and Infrastructure Review bill that 

is being considered by the Committee. 

First, Mr. Chairman, I would like to thank you and Ranking 

Member Walz for holding the roundtable in September where we 

began this discussion. Many of us at this table know that this discussion actually began before that point and we appreciate you all 

taking the time to address this with us. 

I would say we recognize this as a necessary evil. The bottom 

line is, I don’t know anyone who was involved in BRAC, I served 

in the military during BRAC, who didn’t think BRAC was in some 

form evil, and yet it is probably a necessary process. I will say that 

I am not sure this bill yet gets us there to the desired end. With 

that in mind, we don’t oppose what you are trying to do and we 

would like to see some refinements to this legislation. 

The Commission on Care recommended a BRAC process for VA. 

We stated then, our partners in the Independent Budget, DAV and 

VFW also stated then, that we don’t believe that that is the right 

way forward, but we recognize the need to right-size the VA’s infrastructure. 

The Independent Budget has stated over and over again that 

that was necessary. I think the Secretary understands that; his list 

is pretty comprehensive just in terms of buildings. But I think 

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there are a few key problems that were identified in the legislation 

during the roundtable that cannot be ignored to make this better. 

I think the bill ignores what was identified as the single biggest 

problem—or the roundtable identified the single biggest problem 

with this bill is it does not give the VA time. And I know that Congress has a complicated position where time is not exactly a luxury, 

but the experts from GAO and from the Congressional Research 

Service, and all of the stakeholders in the room when we had that 

conversation, clearly stated that DoD had at least 3 years to prepare its BRAC process, and this bill would accomplish that with 

VA in far less time. 

And I would argue that the VA system is far more dynamic and 

more complex than what DoD had to deal with. All DoD had to do 

was say, you live here, you are stationed here, you are moving, and 

that is it. That is not the way that is going to work with VA and 

the population it serves, and I think that that cannot be overstated. 

So if we are going to go down this road, that has to be foremost 

in our mind. Giving the VA the time to actually lay this out properly is key. 

The draft legislation we are discussing right now as it relates to 

Choice reform has a market assessment component. And when we 

had the roundtable about that draft there was discussion about the 

bill providing for, I think, a year for those market assessments, and 

most people that were part of that discussion did not believe a year 

was really sufficient to do that level of market assessment. And the 

market assessments in that Choice reform bill are probably less 

complex than what this BRAC process would require, and yet the 

draft bill gives less than a year to complete the market assessment 

and lay everything out in the groundwork to run out the BRAC 

process. That is clearly something that has to be changed in this 

draft bill. 

I think my colleague from the DAV said something along the line 

of developing the integrated health care network and that whole 

plan for community care access before we go down the BRAC road. 

I think we could have a reasonable debate over whether we are 

putting the cart before the horse or not. Some people would say, 

we do this first and then we know what we have to work with. I 

think we take the position that we should know what the VA plans 

to do in terms of delivering care before we then decide what its 

footprint is going to look like. 

So I think, because we have sort of divorced Choice reform and 

ultimately the plan for community care from this, I think we are 

setting up maybe a fatal flaw in the ultimate design of this. 

Lastly, my biggest concern or one of my major concerns is I was 

here when CARES, towards the tail end of CARES as I came to 

work here in Washington. And for those of us who were here during that period, CARES did a great disservice to the VA, primarily 

because there was a moratorium for all intents and purposes on all 

new major and minor construction during the CARES process. That 

was a couple-of-years process where nothing new got done in VA. 

And I could envision a scenario where that very same philosophy 

plays out with this bill and that is not acceptable. 

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I think part of the reason we are in this situation, you mentioned 

Northport. Now, I can’t change the fact that it is 90 years old, that 

is a fact, but I could also argue that many of the reasons why some 

of these places are not modernized is because all the way back then 

no money was invested in their modernization while we decided 

what the footprint of VA was going to be under CARES, and now 

here we are again. 

So if we are going to go down the road with BRAC—and this is 

BRAC, it doesn’t matter whether you say it is or not, this is BRAC 

for VA—if we are going to go down this road, we can’t then say we 

are not going to do anything with VA’s construction until we finish 

this process, because that is 2 years from now and that is not acceptable. 

Mr. Chairman, again, I would like to thank you for the opportunity to testify. We would be happy to take any questions that you 

have. 

[THE PREPARED STATEMENT OF CARL BLAKE APPEARS IN THE APPENDIX]

The CHAIRMAN. I thank the gentleman for yielding. 

Mr. Fuentes, you are recognized for 5 minutes. 

STATEMENT OF CARLOS FUENTES 

Mr. FUENTES. Chairman Roe, Ranking Member Walz, and Members of the Committee, on behalf of the men and women of the 

VFW and our Auxiliary, thank you for the opportunity to present 

our views on legislation pending before the Committee. 

The VFW agrees with the intent of H.R. 2773, which would require VA to sell Pershing Hall in Paris, France. VA should not be 

in the hotel business, but selling Pershing Hall should be more 

than just simply an effort to no longer own the building. 

The VFW is glad the legislation would preserve the history of 

Pershing Hall and the memory of the brave American 

servicemembers who fought in World War I. We urge the Committee to explore the option of transferring the building to the 

Army’s Armed Forces Recreation Centers who operates hotels 

throughout the world before selling the building to a private entity. 

The VFW also agrees with the intent of the Asset and Infrastructure Review Act of 2017, and has several recommendations to improve it. 

For more than 100 years, the Government’s solution to care for 

veterans has been to operate a network of VA facilities throughout 

the country. Many of these buildings must be replaced, some of 

them need to be disposed of, others need to be expanded, and they 

all need to be managed. 

The VA’s Strategic Capital Infrastructure Plan, or SCIP, identifies VA’s current and projected gaps in access, utilization and safety. In VA’s fiscal year 2018 budget request, the estimated cost of 

closing all these gaps was 55 to $67 billion over 10 years. 

The VFW agrees that VA has an insurmountable capital infrastructure problem and a systemic realignment of VA assets may 

help in addressing these gaps. However, the VFW has historically 

opposed a BRAC-style process for VA medical facilities, because the 

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population VA serves is very different than the population served 

by or stationed in military installations. 

When I was in uniform, the Marine Corps could send me where 

they wanted, when they wanted, and I had little to no say about 

it. VA, however, does not have the ability to require veterans to 

move from one location to the other; it has to adjust to changes in 

the veteran population. 

The SCIP process includes plans to address unused or underutilized facilities, but the process for approving, funding, and implementing the plan is what has led to a $67 billion backlog. That is 

why the VFW urges the Committee to identify barriers which delay 

or impede the SCIP process. If those issues are not addressed, we 

will find ourselves in the same or worse situation in the future. 

The lack of input from affected veterans has been the principal 

reason previous plans to close or realign VA facilities have failed. 

The VFW is pleased this legislation requires the proposed commission to conduct public hearings and seek input from veterans impacted by changes, yet it does not require VA to conduct such hearings when developing its plan, and the VFW believes VA’s plan 

must include input from local veterans in order to ensure buy-in. 

Past plans to close VA medical facilities have also failed because 

it would create access gaps to care for veterans. 

In order to avoid repeating those mistakes, the VFW urges the 

Committee to require VA to implement proposed solutions before 

closing facilities or eliminating space. Simply purchasing more care 

from community providers is not an acceptable option. Veterans 

tell the VFW that they want VA to hire more doctors and build 

more capacity. 

Through the Choice Program, we have learned that community 

providers are a great force-multiplier for VA, but it is not a panacea of access or quality. This legislation requires and we support 

identifying opportunities to fill access gaps by purchasing care, but 

it does not require VA to evaluate how hiring doctors or building 

new facilities or leasing space would correct deficiencies or fill access gaps. 

The VFW also believes that revenue generated from leasing or 

selling existing facilities must be reinvested into expanding access 

to VA care for veterans. 

Mr. Chairman, this concludes my remarks. I am happy to answer 

any questions you or the Members of the Committee may have. 

[THE PREPARED STATEMENT OF CARLOS FUENTES APPEARS IN THE

APPENDIX]

The CHAIRMAN. I thank the gentleman for yielding. 

Mr. Wise, you are recognized for 5 minutes. 

STATEMENT OF DAVE WISE 

Mr. WISE. Chairman Roe, Ranking Member Walz, and Members 

of the Committee, we are pleased to be here today to discuss our 

work related to VA’s efforts to align its medical facilities and services, as well as our work on DoD’s BRAC process. My colleague 

Brian Lepore, who is GAO’s expert on the BRAC process, is sitting 

just behind me and will be pleased to answer any questions on 

BRAC. 

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VA is one of the largest health care systems in the United States, 

annually providing care to nearly 9 million veterans. It is also one 

of the largest property-holding agencies in the Federal Government. 

In 2014, VA reported that its inventory included more than 6,000 

owned and 1,500 leased buildings covering approximately 170 million square feet of space. A large number of its facilities are underutilized and outdated, creating a variety of challenges for alignment. Real property management overall, including VA, has been 

on GAO’s high-risk list since 2003. 

Our testimony today is based on our April 2017 report examining 

VA’s efforts to align its facilities with veterans’ needs and on numerous GAO reports related to the BRAC process as summarized 

in June 2011 and March 2012 testimonies. I will address two key 

areas today: one, the factors that affect VA facility alignment with 

the veteran population, and, two, the key elements and challenges 

affecting DoD and the 2005 BRAC Commission that could be instructive as the Committee considers the proposed legislation before it today. 

As we discussed in our April 2017 report, there are a number of 

factors affecting VA’s alignment efforts. 

First, VA projects a 14-percent decrease in the veteran population by 2024 and continuing migration to the south and west. 

Second, similar to trends in the health care industry overall, VA’s 

model of care continues to shift away from in-patient to outpatient 

settings. Third, VA is increasingly relying on care provided in the 

community. Fourth, an aging infrastructure means that many VA 

facilities are not well suited to providing care and it is often too 

costly to modernize, renovate, and retrofit older facilities. Fifth, the 

historic status of some 3,000 historic properties adds to the complexity of alignment. 

VA has recognized the need to improve planning and budgeting 

to modernize its aging infrastructure and better align facilities 

with veterans’ needs. VA’s efforts have included the Strategic Capital Investment strategies, SCIP process, and the VA integrated 

planning process. However, both have limitations. 

VA relies on the SCIP process to plan and prioritize capital 

projects, but limitations such as subjective narrative, long timeframes, and restrictive access to information limit VA’s ability to 

achieve its goal. VAIP also has limitations. It is intended to 

produce market level service plans for each integrated service network and facility master plans for each medical facility at a total 

cost of more than $100 million. A limitation to this process is assuming that all future growth in services will be through VA facilities, which is unlikely given the increasing level of care in the community. 

Additionally, VA has faced stakeholder challenges in its facility 

alignment actions from various groups. 

Finally, VA has not consistently followed best practices to effectively engage stakeholders in these decisions or evaluated the effectiveness of its stakeholder communication strategies. 

In the April 2017 report, GAO made recommendations related to 

capital planning and stakeholder involvement. VA concurred with 

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the recommendations to the extent they were within its control and 

has begun making improvements. 

Regarding BRAC, as Congress evaluates the proposed Asset and 

Infrastructure Review Act, it may wish to consider seven elements 

DoD used in developing recommendations for the BRAC commission. First, establish goals for the process. 

The Secretary of Defense developed three primary goals for 

BRAC 2005: Transform the military to be more efficient, promote 

enhanced jointness among the military services, and reduce excess 

infrastructure and produce savings. 

Second, develop criteria for evaluating closures and realignments. 

Third, estimate costs and savings to implement recommendations. Fourth, establish an organizational structure. Fifth, establish 

a common analytical framework. Sixth, develop oversight mechanisms for accountability. And, seventh, involve the art of community to better ensure data accuracy. 

Finally, we identified two key challenges that affected DoD’s 

elimination of BRAC 2005 and the results achieved. First, some 

transformational type recommendations require sustained senior 

leadership attention and a high level of coordination among many 

stakeholders. This was especially true of recommendations where 

a multitude of organizations had roles to play. 

Second, interdependent recommendations complicated implementation. The BRAC Commission staff told us it was difficult to assess costs and savings since many recommendations remained multiple interdependent actions which needed to be reviewed. These 

challenges would need to be addressed if VA is to successfully 

apply a BRAC-like system. 

Chairman Roe, Ranking Member Walz, and Members of the 

Committee, that concludes my statement. Brian and I will be 

happy to answer any questions you may have. 

[THE PREPARED STATEMENT OF DAVE WISE APPEARS IN THE APPENDIX]

The CHAIRMAN. Thank you, Mr. Wise. Dr. Crump, you are recognized now for 5 minutes. 

STATEMENT OF REGAN L. CRUMP 

Mr. CRUMP. Chairman Roe, Ranking Member Walz, and distinguished Members of the Committee, thank you for the opportunity 

to appear before you today. Joining me today is my colleague, Jim 

Sullivan, the Executive Director of VA’s Office of Asset and Enterprise Management. 

Today we are prepared to discuss the Committee’s draft Asset 

and Infrastructure Review legislation, as well as VA efforts already 

underway to modernize our health care system and infrastructure. 

VA will follow up later with views on H.R. 2773 regarding Pershing 

Hall. 

The draft legislative text calls for VA to assess our health care 

markets nationwide, and determine ways to optimize the care and 

services we provide for veterans, and then submit recommendations to an appointed commission. The Department very much appreciates the Committee for its attention and commitment to the 

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effective use of capital assets and delivering high quality care to 

veterans. 

The draft bill includes many thoughtful features that could serve 

as useful benchmarks for the market analysis, which is what we 

will use to gather focused, localized, and objective data for decisionmaking. As to the commission’s structure and process, many of 

those requirements concern actions of Congress and so we defer to 

Congress. Regarding details of the draft, we would be pleased to 

follow up with the Committee to provide more in-depth comments 

and technical assistance. 

Now, let me highlight what VA’s doing with regard to building 

a high performing health care system. 

One of Secretary Shulkin’s top five priorities is modernize our 

systems which includes focusing on system streamlining and also 

infrastructure improvements. The Secretary is committed to modernizing our systems and infrastructure by focusing on primary 

care and VA’s other foundational services, and the facilities where 

such services are delivered. 

As the Secretary has emphasized, VA is moving forward with 

more efficient and agile management of VA’s medical care facilities 

to match capabilities with where veterans live. The goal of our upcoming market assessments is to modernize VA’s health care system using a data-driven approach for matching local capacity to 

local demand, and to create a modern, high-performing, integrated 

health care network in each market to better serve veterans. 

These networks will be well-connected, comprehensive coalitions 

led by experienced VA managers who will coordinate VA health 

care services complemented, where appropriate, by other Federal 

and private sector providers. We must also continue leadership in 

our research health professions training and emergency preparedness missions. 

These assessments are aimed at assessing current and future 

veteran demand for care and all the capabilities of local VA providers, DoD treatment facilities, academic affiliates, federally qualified health centers, other Federal, state, and local partners, as well 

as our telehealth resources. Achieving high-performing networks 

may require significant capital investments, clinical service line adjustments, process improvements, some targeted divestments, robust care coordination, and smart use of strategic partnerships. 

The plans we pursue will undoubtedly require the continued support of Congress, VSOs, and other stakeholders to ensure success. 

In addition to VA’s current authorities, we will continue to explore 

ways to leverage and establish additional capability and efficiencies 

with other Federal agencies such as DoD and GSA, as well as private sector partners. 

Improved authorities to pursue joint facilities through construction and leasing actions will provide greater opportunities for VA 

to deliver 21st century care and services to veterans in state-of-theart facilities nationwide. 

VA recently submitted proposed legislation to the Committee, the 

draft VA CARE, C–A-R–E Act. That bill includes proposals to increase the Department’s flexibility to meet veterans’ needs such as 

increasing the major construction and lease thresholds; streamlining requirements for joint facility projects; creating VA–DoD pileonard.horne on VACREP0180 with DISTILLER

22 

lots for sharing health care resources without billing one another; 

and, expanding VA’s enhanced use lease authority. 

We must continually adapt to the changing needs of veterans we 

are privileged to serve. 

Mr. Chairman, Ranking Member, and Members of the Committee, thank you for the opportunity to testify before the Committee today. We are glad to answer any questions regarding the 

draft bill and our approach to building high performing local health 

care systems for veterans. 

[THE PREPARED STATEMENT OF REGAN CRUMP APPEARS IN THE APPENDIX]

The CHAIRMAN. Thank you, Dr. Crump. I will yield myself now 

5 minutes. And I feel like I am back on the planning commission 

where I started my political career, except it is on steroids. 

This is a huge undertaking that we are talking about today. And 

my recent trip to Northport, and to Canandaigua, and to Rochester 

a couple weeks ago really helped shape a little bit about I think 

you could make this trip in a lot of different areas and find out the 

same thing. 

One is that we are now developing—and to look at Northport, it 

would take $450 million to invest into that plant and facility. And 

I think we have to look at not only how health care is provided 

today, but how it is going to be, as best we can figure it, Dr. 

Crump, 5, 10, 20, long after we are gone, that is what we are planning for now. Not for right now, but we are planning for 10 years, 

20 years, 30 years what the VA is going to look like. 

And I can tell you what it is looking like in the various facilities 

that I go to is that the inpatient hospital beds are shrinking, they 

have dropped dramatically. Sometimes 80, 90 percent in the VA, 

but the VA’s done exactly the right thing. And I don’t know what 

the VA would do today if it hadn’t put CBOCs out there. I think 

that is one of the best things they ever did. 

And this trip to Canandaigua and Rochester—and I also went to 

Rochester where they were shoveling dirt because of one of the 

leases that we approved on doubling the size of the CBOC where 

very modern health care, and the one they were in was just packed 

that day with patients. And they were at elbow to elbow, the providers were, and the veterans were. And I talked to many veterans 

there, and they love the care that they were getting at the CBOC. 

So getting that in focus is going to be difficult. And I agree with 

much of what you all said. The timeline, absolutely, what the commission looked like, that is all debatable. We can get that figured 

out. What we got to figure out, and this will not be an easy undertaking, if we undertake this to do, but I think it is necessary to 

provide the best care for our veterans. And, right now, it is not— 

I can’t imagine at my own VA at home, if all those patients who 

were at those CBOCs that were driving back on that campus, I 

can’t imagine what it would look like. 

So, Dr. Crump, I am going to start with you and go as quickly 

as I can, and then I have got a lot of questions that I will submit 

for the record. 

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Does VA support, in general, the draft bill, and will the Department be prepared to follow up with the Committee to provide more 

in-depth comments and technical assistance on it? 

Mr. CRUMP. First and foremost, we would absolutely be available 

to provide additional technical assistance. And with regard to the 

bill, we are not yet clear whether or not there is a need for a commission, but there is definitely a need for the legislative flexibility 

to support us in doing a thorough analysis. And then we will, obviously, need ongoing support from Members of Congress and also 

from VSOs to implement those recommendations from that thorough assessment which is going to be based on the health care 

services we need. 

The CHAIRMAN. Well, I can tell you one of my concerns very 

quickly is we had in 2004 when Secretary Principi tried to realign, 

Canandaigua was one of them. The only thing that happened, and 

Carl pointed out, clearly it was—actually it harmed the VA, it 

slowed down the—we absolutely don’t want to do that. Without 

question, we don’t want to do that again where you stop doing everything you should have been doing as far as capital projects are 

concerned. And if that indeed happened, that was a huge mistake 

on all of our parts. We don’t want to make that mistake again, we 

learned that. 

Two, once a contract is awarded to begin the local market capacity assessment, how long do you estimate it will take to complete 

assessments in all 96 markets? When will VA be able to tell us 

that? 

Mr. CRUMP. There was a recent issue related to the contract. We 

did award a contract, there is a court order which is requiring a 

60-day stay. So the earliest that we will know whether or not we 

will be able to proceed with the assistance of the contractor is December. 

However, we will be able to start. And what we are estimating 

now is that we would do six VISNs at a time, I think we discussed 

that during the roundtable. There are about 32 markets in those 

six VISNs, and to do all of those simultaneously, mounting a VA 

team supplemented by contractors, we are now thinking it will 

probably be about 6 months for that group, 6 months for the second 

group of six VISNs, and then another 6 months, so probably 18 

months. 

The CHAIRMAN. Eighteen months. That was my next question, 

you just answered it, and I appreciate that. 

Ms. Ilem, very quickly, and my time is about to expire, your testimony stated that it would be inappropriate and counter-productive in trying to reform the delivery of veterans health care, for the 

process to be closed, non-transparent, and inflexible. 

But the Act clearly says that the Secretary to propose criteria, 

publish it on the Federal register, have a 30 day open public comment period, would require all information be used by VA to prepare for facility realignment recommendations be available to Congress, the commission, and the Government Accountability Office. 

Would require veterans and VSOs to be a part of the AIR commission, and would require that each meeting of the commission be 

open to the public, and that all proceedings, information and deliberation, be open to Congress. 

leonard.horne on VACREP0180 with DISTILLER

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Given that, what aspects of the AIR Act do you think are closed 

and not transparent? 

Ms. ILEM. I think looking back at the CARES process, one of the 

issues that we saw in looking at this legislation that we feared is 

that there is not as much stakeholder involvement right from the 

beginning that we like to see. The biggest thing, I think, that, you 

know, started off on the wrong foot was not making veterans feel 

that they were involved in the process from the beginning. 

They felt this was already done, and, yes, we are going to listen 

to you, or listen to what you say, we are going to maybe hold a 

hearing or have one, but not really being involved in that process, 

that decision-making process. Veterans feel this is their system, 

they are committed, they want to help provide what they think is 

best. And I think if as long as you may—there is a much better 

effort to do that right up front, and that they know what is being 

talked about and considered, and that they have that input from 

the beginning. 

From New Orleans, the hospital when we were down there, and 

we got to tour it during our national convention, one of the things 

during the tour that really struck me, everywhere we went they 

said, veterans planned and laid out exactly how they wanted things 

in the facility, what was important to them from the infrastructure, 

the layout, everything. And you could really see that, you know, 

they had pride in—that that was considered, you know, that had 

been taken into consideration. So I would like to see that. 

The CHAIRMAN. Mr. Walz, you are recognized. 

Mr. WALZ. Well thank you, Mr. Chairman. I would concur with 

Ms. Ilem. I got the opportunity to see that New Orleans facility too, 

and just randomly stopped a veteran going through there and 

asked him what he thought of the place. He said, ‘‘I feel like I built 

it.’’ And which was a really, really interesting comment. It is a fabulous facility, certainly needed, and I think that process goes a long 

way. 

It is the front-end piece of this I was going to ask all of you and 

I think you started to answer it in great testimony. To think about 

what should this Committee be doing next? What, to build that 

trust? What, to have the partners truly engaged? Because I do 

think there is alignment. 

We all know this is an opportunity, we have all been talking 

about it, but I do think creating those tools that can be used going 

forward rather than—I keep coming back to the snapshot-in-time 

picture and, you know, if I see that damn gas station at Fort 

Snelling again I will personally just go tear it down and we can 

move on with this conversation, because that really doesn’t have 

anything to do with the delivery of this. 

There is not an asset there to sell, it is probably not going to 

save money. But I got to be honest with you, I don’t really know 

that for certain, I don’t know what the tools are going to be delivered. 

So, Dr. Crump, I am going to come to you. I don’t know if you 

are at liberty to be able to tell me this. In those three, kind of, target markets out there in North Carolina, Georgia, and Washington 

State, you are developing and doing those assessments to develop 

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the methodology, are you learning anything? I mean, is there something there that starts to get us to where we are trying to go? 

Mr. CRUMP. Yes, sir, we have learned a lot. I mean, the whole 

purpose of the pilot was, as you said, to develop a methodology, 

which I do believe we now have. We have been able to outline the 

steps of that methodology. Some of the things we did learn was the 

type of data and the volume of data that needed to be collected. 

We also learned, as has been suggested before, that we need to 

involve stakeholders very early on in the process. We have also 

learned that we need to pull in a variety of assessments that had 

been done in the past, and any ongoing assessments. So we have 

learned a lot about that process. 

We also learned that where we initially started out with this 

being more of a contractor-led, or a consultant-led, initiative. We 

also learned early on, or maybe later in the process, that it really 

must be owned and led by the network director and the market 

leaders for that health care market so that they own the recommendations and can advance those. 

We have also learned that, in many instances, the need to partner with DoD, with our academic affiliates, there are some constraints to doing that and so that is why we talk about some legislative flexibilities. So those are some examples of lessons learned. 

Mr. WALZ. Well, and I would like—I think this next part, I think 

this is our opportunity to think really big. I think right now as we 

are looking at it, we are still pretty narrow because the quote from 

DoD’s process on BRAC was ‘‘reduce the amount of unneeded property that it owns or leases.’’ 

Well, when you look into this, that meant building up other 

places, being built up, shifting of assets. There is a whole bunch 

of moving pieces in this, and I think we have to be really, really 

careful, all of us in here, of not seeing this process on an ideological 

spectrum of shrinking government versus big government with 

small government, this is just-right size is what we are looking for. 

I still am trying to get my mind wrapped around what is that 

just-right size. So, Mr. Wise, if I could just ask you. Your understanding, as our draft stands, is there anything in here that allows 

the VA to consider options such as building new infrastructure or 

leasing space for facilities that are more than 100 percent utilized? 

Mr. WISE. Mr. Walz, GAO doesn’t have a position on this draft 

legislation. It is not something we have had an opportunity to really study or comment on, but, of course, we are available to do so. 

But to the point of your question, I think overall the question is 

it is a significant challenge for the Veterans Administration to be 

able to get at the points you were talking about in terms of rightsizing, and they realize that. 

And the issue is that if you do implement a BRAC-like process, 

there are a number of things that need to be considered. And some 

of the testimony we have heard today alludes to those things. And 

one of the most important ones, as Dr. Crump noted, was bringing 

in stakeholders and being able to engage in effective communication because this was one of the key elements that was—has been 

a real problem with the SCIP process and, to a lesser extent, with 

the other efforts to realign VA facilities. 

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Mr. WALZ. Well, I have got some follow-up, my time is coming 

to end here, but I would encourage all. This is the healthy place 

we need to be. Carl brought up great points about we can’t move 

our veterans population around by telling them to move to Joint 

Base Lewis-McChord because we are closing something else, it does 

not work that way. 

But I do think there is an opportunity for us to think really, really big on this, and the tools necessary, and the assets, and getting 

this to—so that we are in a continuous process of reevaluation with 

the VA and not chasing our tail all the time when things get outdated. 

I yield back. 

The CHAIRMAN. I thank the gentleman for yielding. Mr. Coffman, 

you are recognize for 5 minutes. 

Mr. COFFMAN. Mr. Chairman, I yield back. 

The CHAIRMAN. The gentleman yields back. Mr. Takano, you are 

recognized. 

Mr. TAKANO. Thank you, Mr. Chairman. 

Mr. Wise, in your written testimony you highlighted significant 

cost savings DoD experienced following the five BRAC rounds. The 

majority’s leadership is under the impression that by mandating 

VA undertake a similar process, it too could save hundreds of millions, if not billions of dollars. 

Now, based on your understanding of the draft legislation and 

the challenges faced by DoD to carry out BRAC rounds, do you anticipate VA seeing substantial cost savings? 

Mr. WISE. Congressman, as I mentioned earlier to Mr. Walz, we 

really haven’t been able to analyze or study the draft legislation. 

But I think what I will do is I will bring Mr. Lepore in because 

he could tell you some of the issues that BRAC faced and how they 

got to their cost savings. 

And I think it remains to be seen as to how VA goes about this 

process as to whether or not they will be able to realize significant 

cost savings going forward. But let me yield to Mr. Lepore who can 

give you some analysis of the BRAC savings and how they came 

about. 

Mr. TAKANO. Well, but speaking as—based on the legislation before us, you really aren’t able to say whether or not there would 

be cost savings. And you are not saying that there wouldn’t be, but 

you are not saying that there will be either, as of this moment. 

Mr. WISE. Yeah. At this point we are—I am unable to take any 

position regarding this legislation as we just haven’t had an opportunity to analyze it and study it. But I think the points we made 

in our testimony, in our written statement, remain valid that, you 

know, VA faces significant challenges in trying to realign its resources. And those are the kind of things we pointed out that will 

be need to be done in order for VA to have any opportunity to realize cost savings going forward. 

Mr. TAKANO. Well, before you yield, I would like to use my time, 

I want to give some of the VSOs a chance to answer a question I 

want to ask. I want to ask you a second question, though, and perhaps the colleague could answer on some other Member’s time. But 

based on your knowledge of past BRACs, do you have any sense 

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of how much it might cost the VA to implement any closure or realignment recommendations? 

All right, go ahead. 

Mr. LEPORE. Congressman, my name is Brian Lepore, I am a Director of Defense Capabilities and Management in the Government 

Accountability Office, I lead the work that we do in the Base Realignment and Closure, or BRAC process. 

It is difficult to directly answer that question, but let me say 

this. What we do know from DoD’s experience with the defense 

base closure and realignment process, with respect to BRAC 2005, 

DoD is achieving cost savings. 

We have done some analysis, we have reported twice now. DoD is achieving net annual recurring savings of about $3.8 billion. 

Mr. TAKANO. Okay. 

Mr. LEPORE. Because BRAC 2005 cost as much as it did, it 

turned out to cost $35.1 billion to implement, DoD has not reached 

the payback period yet. Next year they will finally take BRAC 2005 

into the black. So right now we are still in the red in a process that 

started in 2005. 

But if I might, to directly answer your question, we would need 

to know the nature of the recommendations that the VA put forward, and we would need to see the cost and savings analysis that 

was the part of that. So that is why it is a little hard to directly 

answer that. 

Mr. TAKANO. I understand. So just all the more reason for us, I 

think, to proceed very, very, very carefully. Because we are not 

really sure, based on the methodology laid out here, that we could 

achieve cost savings. And it has taken many, many years, and you 

haven’t yet, at DoD, hit that payback moment, right? I mean, you 

have had to spend money to close, but the savings has been realized very gradually over time, and we haven’t reached that payback 

point yet. 

Mr. LEPORE. Yes, that is correct. The other point I would make 

that is related to that is the decisions that DoD made after the 

commission had approved the recommendations were directly related to the cost. 

In other words, a couple things happened. In several of the recommendations DoD omitted costs that were known to be incurred 

such as transferring people from one base to another. Indeed, DoD 

transferred over 120,000 people in BRAC 2005, none of those costs 

were estimated. 

Similarly, decisions that were made later on how to outfit the 

buildings, places like the National GO Spatial Intelligence Agency’s 

new campus in Springfield, Virginia, turned out to be about $726 

million more than originally estimated just for some of the military 

construction type things. So it has to do with the decisions that get 

made in terms of implementing the recommendations the commission approved. 

Mr. TAKANO. Well, thank you very much. My time is up, and I 

do have to move it along. Thank you, sir. 

The CHAIRMAN. I thank the gentleman for yielding. Dr. 

Wenstrup, you are recognized. 

Mr. WENSTRUP. Thank you, Mr. Chairman. I thank you all for 

being here. I appreciate the input that we have received, I appreleonard.horne on VACREP0180 with DISTILLER

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ciate the concerns that people have, and concerns on the process. 

We have concerns on the process as well; we want to get this right. 

And I would recommend, as we move forward, if any of your 

groups have members that are practicing physicians or health care 

providers, please bring them into your conversations that you are 

having. I think that is important to bring them forward, people 

that understand the health care business, which is really what we 

are faced with today. And, especially ones that are practicing 

today, whether it is nurses or doctors. You know, bring them into 

the fold as you bring forward your ideas. I think that would be 

helpful to us. 

You know, I consider this an asset review, you know. And we 

want to increase our productivity. And I have seen since I have 

been here, you know, VA will come in and say, well, we are producing more as far as patient care. I said, did you increase your 

hours? Yeah. Did you add more doctors? Yes. But did you actually 

take a look at how productive you can and can’t be in a clinic, for 

example. To me, this is part of it. 

If we have clinics that have one patient room, that is not going 

to be productive. If we have clinics that need a couple medical assistants to make it flow better, and we are not looking at that, then 

we are not increasing our productivity. That is all a part of what 

we are trying to do here. 

Are we operating at maximum efficiency? And that is really what 

it comes down to. It includes your physical structure, your ancillary 

support, all those things come into play. And do you have the physical ability within that facility to create it? The CBOCs, for example, have been excellent. That is part of the modernization, that is 

part of this review, if you will, to actually look and see how effective they may have been in providing quality patient care for our 

veterans. 

So it is a review of logistics and review of providing care, and a 

review of customer service. And I agree, the timeline we have may 

not be right. This is big and this is challenging, so it may not be 

right. But it is a matter of looking at what we have and what we 

don’t have, what we need and what we don’t need. That is really 

what this is all about. 

And it is based, really, on current markets and future markets. 

We need to look at that. You are right, Mr. Blake, we can’t move 

people, that is not the idea here, it is being able to fill the needs 

of the people. So that is part of the market review of what we are 

after. 

And so, you know, when it comes to that, I don’t consider this 

to be like a BRAC. We are not going to relocate people, right? So 

it doesn’t fit into that same category, I feel, of what this Committee 

and what we should be trying to accomplish. 

You mentioned Northport not having modernization. Well, maybe 

it wasn’t modernized because no one did what we are talking about 

doing. Because no one looked at it and said, you don’t have what 

you need. This is what we are trying to accomplish here. 

So let’s work together on really trying to make this about logistics, customer service, 21st century care, and do it in providing care 

in a quality fashion and a timely fashion. Because we are not out 

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here to snooker anybody, we are out here to make a positive difference for the future of our VA health care system. 

So I don’t really have a question, but I just would like to keep 

all those things in mind and understand what is in the heart and 

soul of this Committee, as I think it is, as we move forward. And 

with that, I yield back. 

The CHAIRMAN. I thank the gentleman for yielding. Ms. 

Brownley, you are recognized for 5 minutes. 

Ms. BROWNLEY. Thank you, Mr. Chairman. I wanted to first just 

make a very quick comment on Pershing Hall. And, from my perspective, I think that we really do have to dig deeper around this 

issue and we need to really research and dig for every possible option that is out there that can hold the Pershing Hall’s historical 

value because I think what Mr. Takano said and what you said is 

very, very true. 

And I think we need to get the value, I don’t think that we 

should be in the hotel business, I agree with all of that, but holding 

onto a historical facility in some way is really, really important. 

And so exploring historical societies, other avenues where we might 

get the return that we are looking for but at the same time holding 

on, I think, to an important historic building that is very important 

to the history of our country. So I just wanted to make that one 

statement. 

With regard to the other bill that we are discussing. I think that 

the reason why we keep referring to it as a BRAC, it is because 

the language in the bill that we are currently looking at right now, 

understanding that it is a draft language, mimics a BRAC process. 

So, therefore, I think we call it a BRAC process. 

I agree with Dr. Westrup that, you know, it should be more of 

an asset review and driving for efficiencies. But I think just because of the nature of the language the way it is currently written 

is kind of sending the wrong message, I think, out there. That people really do feel like this will be a time-a-year process, and it is 

an up and down vote. 

I do agree with the Ranking Member’s opening comments that 

we really—I think the better approach is a much more of a continuous approach to this process, that we do have to adapt to changing needs, both in veteran migration and changes in health care 

delivery altogether. So that we need to be malleable every year in 

terms of responding to that. 

I think veterans need to be at the table at every part of the process. We need their voice, that is critically important. And I just feel 

like if we start in a continuous process, it might be less complex 

in some ways. I sort of envision that there are probably, in this 

whole process, some easier decisions that are pretty kind of black 

and white about maybe we don’t really need this facility, and it is 

pretty clear to everyone who is looking at this information. And incrementally it is going to get more and more difficult. 

So if we are in a continuous mode, I think that we can right 

away sort of address some inefficiencies in identifying those that 

are more or less the easier ones. So I just wanted to make that 

statement. I think that we also are looking in this bill how to shut 

down, get rid of, however you want to quantify it, facilities. 

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We also have to look at improving the processes for expanding 

facilities and leasing facilities. And leasing facilities has been one 

of my bugaboos, that it is, it has taken 2 years to get a new group 

of leases done, and that we need to revert back to the old process 

where, you know, this Committee really does weigh in by resolution 

on these new leases. 

So those two things have to kind of—we have to work on both 

of those issues, I think, simultaneously. 

Right now I think the only question that I have is to the Chairman of the Committee, and if you could just help allay some of my 

concerns, I guess, by just trying to let us know how you perceive 

our process in terms of how we will proceed in terms of really discussing all of these issues and moving forward with changes, or 

amendments, or whatever. So, Mr. Chairman, if you wouldn’t mind. 

The CHAIRMAN. What I will do, since your time has expired, is 

I will go ahead and let the other Members, so if they have somewhere they have to go, and at the end I will address that. 

Ms. BROWNLEY. Terrific. Thank you. 

The CHAIRMAN. Mr. Bost, you are recognized. 

Mr. BOST. Thank you, Mr. Chairman. 

You know, earlier this week, and I want to thank the Chairman 

for doing this, both the Chairman and I held a tele-town hall meeting where we discussed issues specifically to the veterans in my 

districts. During that time we received a call from one of the veterans who spoke specifically about the assets that is held by the 

VHA, and many of my constituents in the northern part of the district used the VA hospital in Saint Louis. 

However, for some in the Metro area, it is still difficult to get to 

Saint Louis. So I guess the question I have is for you, Dr. Crump 

or Mr. Sullivan, whichever, is do you believe—and I think that we 

have answered it before but I would like to expand on it—that the 

proposed legislation could lead to increased assets of VHA like 

CBOCs in areas like high veterans populations such as at Metro 

East? 

Mr. CRUMP. Well, I can’t speak to whether or not the legislation 

itself will lead to that, but I can speak to the shifting demographics 

of veterans in the modernization of health care. I mean, it is very 

clear to us, as has been shared, that our inpatient care demand is 

going down like 4 to 10 percent a year, whereas our outpatient demand for care is going up like 10 to 20 percent per year. So that 

is why we have had to add more community-based outpatient clinics, and we will continue to provide more ambulatory care. 

The other thing is, telehealth has given us the ability to utilize 

excess capacity in one part of the country to provide care in another part of the country. And so it is our definite intent to work 

through VA improving efficiency, partnering with DoD, and realigning assets to where the veterans are to deliver more care 

using more outpatient services, fewer inpatient services, but also 

addressing the increased demand for some mental health services, 

and use of ambulatory care and telehealth services. 

Mr. BOST. Yeah. That is what we really want. My other question 

here is, basically, to the VSOs. At any time have you been discussing with the VA, if we go forward with this, what the communications will be with the veterans in the area where maybe there 

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is a relocation, maybe there are all of these things that occur that 

they would then have an open communication with the veteran to 

communicate on how their services and the way they receive their 

services might be changed? Have you had those conversations? 

Ms. ILEM. I would just say, we have, I think, brought it up in 

terms of this stakeholder engagement and how they would communicate and having really effective engagement early on in the local 

communities, that that is important. But also with the service organizations so we can help educate, that we can help explain, and 

that we can also get them, you know, where they need to be to 

have their input considered, and look at the big picture. So I think 

we have mentioned it in our discussions as these draft bills have 

been considered. 

Mr. CELLI. So I can tell you from The American Legion’s perspective, we also included that in our written testimony. You know, 

there was a portion of the bill that talks about conducting public 

hearings at every location where there could possibly be a reduction in buildings. And, you know, we questioned the logic of having 

a public hearing if it is only a storage facility, or if it is a gas station, or if it is something that is no longer used. But we absolutely 

demand and require, you know, public hearings where health care 

is going to be affected. And I think that is going to be a critical 

component to this. 

Mr. BLAKE. Mr. Bost, I think it is no secret that veterans in 

many local communities don’t have any idea what the heck is going 

on at their local VA facility, even when they are regular users. I 

mean, I think one of our chief complaints that we hear about is 

there is no effective communication about major changes that are 

going on. 

And so now we are going to go down this road with a process 

where we are going to hope that VA is going to conduct public discussion and public interaction with those people in those local communities. It doesn’t really happen effectively now, so it is serious 

concern we have if we are going to go down this road. 

Mr. FUENTES. We will make sure that happens, and we will certainly participate in the process to make sure that, you know, for 

the VFW, our members are there or represented. But the key is 

that the plan is what veterans want, right? Because often you can 

listen to them, you can have a hearing, but then VA goes a completely different route and that is where you get the issue. Right? 

We are a membership-based organization, and if my members, 

VFW members in any particular area aren’t happy they are going 

to come to us and they are going to say, do what you can to stop 

it, and that is exactly what I am charged to do. 

Mr. BOST. Okay. My time has expired. I yield back. 

The CHAIRMAN. General Bergman, you are recognized for 5 minutes. 

Mr. BERGMAN. Thank you, Mr. Chairman. Am I last? I am not 

going to say you saved the best for last, you saved the oldest for 

last. That is how it works. 

You know folks, I have got one simple question, and I am going 

to ask each of you to answer it in a couple sentences. And we are 

going to start right here with Mr. Sullivan. You haven’t had a 

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chance to talk much today, so this, but simply, in a couple sentences, I want you to tell us why we are here today. 

Mr. SULLIVAN. We are here today to look at how we can realign 

our services to provide more efficient and more effective health care 

services to our veterans. And look at what are the tools and what 

are the authorities that we need to deliver those to where the veterans are, where they want to have it delivered, and what is the 

best way to deliver it to them. 

Mr. BERGMAN. Okay. Mr. Crump. 

Mr. CRUMP. I believe and hope that the reason we are here today 

is to figure out how VA, VSOs, and Members of Congress, and 

other stakeholders can work together effectively to make sure that 

we utilize our assets and resources most effectively to increase access, improve quality, and also make sure that we improve satisfaction of the care that veterans receive. They have earned it, and we 

need to make sure that together we will work to make sure that 

we deliver it. 

Ms. ILEM. I would concur that we hope that we are here to collaborate. To listen to each other, to have a voice, have a say, be 

part of the discussion about the future of VA health care. I think 

everybody has the same goal in mind: wanting to improve services, 

ensure veterans are cared for with timely, quality health care 

throughout the country. And this is the start of the conversation 

to help foster that. 

Mr. CELLI. I would agree, and I would agree with Mr. Sullivan’s 

comments. This is the beginning of the conversation; it is not the 

first one, but it is the beginning of the conversation of how to modernize VA with 21st century health care for our veterans, and without talking about capital assets and infrastructure we can’t have 

that conversation. But we also have to make sure that we know 

where the services are needed. So I think that this is a step in the 

right direction. 

Mr. BLAKE. We are here to ensure veterans get timely quality 

health care in the best setting and that includes making sure VA 

is properly positioned to deliver that care, or is able to work with 

the community to do so. 

Mr. WISE. Everybody has been so eloquent, it is hard to come up 

with something original. But I think one thing, and a couple of the 

Members have, I think, alluded to this, is that it is important that 

while there can be a lot of really positive lessons drawn, or lessons 

as a whole drawn from BRAC, I think it is important not to overstate the BRAC- VA connection because their missions are so different, and the population is very different. Their needs, and their 

physical locations, and everything that goes about them is so different that it is important that it can be used as a learning tool, 

but understand the differences as well as the similarities. 

Mr. LEPORE. It seems to me we are here to assist you in developing legislation that gets the best possible care to our veterans in 

the most efficient way possible and at the best possible cost. 

Mr. FUENTES. I completely agree. I mean, we are here to get this 

right, to make sure that there are no gaps in access to care, and 

that veterans and the care that they receive are improved by the 

outcomes of whatever this Committee passes and becomes law. 

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Mr. BERGMAN. Okay. Well, thank you, each of you, for putting in 

your own words because you heard all the Committee Members 

who spoke. We all have our own view and our own words. And 

communication is not what is said, it is what is heard. And, you 

know, in the military we are big on mission statements because if 

you can’t write a mission statement concisely, then your commanders in the field are not going to be able to execute that mission to the success that they need to for the positive outcome. 

So, number one, I know you are all in the game, and those of us 

who played in the congressional football game last night had a 

chance to play many different positions, and figure out that we 

were sometimes running in different directions, but we are all 

headed towards the same end zone. 

And I would suggest to you that in the case of, you know, the 

why that we are here today, I just wrote up a quick mission statement, this is my version, and that we are all in this together because you are here because you are part of this large team that has 

a dog in the fight here. We are all in this together to serve our veterans in a forward-thinking way, which means we have to shed 

some of maybe the concepts that we have used that maybe are not 

going to work in the future. 

So in a forward-thinking way that maximizes veteran outcomes, 

and minimizes waste, utilizing limited resources. So maximize outcomes, minimize waste, limited resources. So as we work together, 

this is our opportunity to make the change necessary for the future. 

I see I am over my time, and I yield back, sir. 

The CHAIRMAN. I thank the gentleman for yielding. And the mission statement last night of the congressional football team was to 

get into the end zone, which they did not accomplish. 

Mr. BERGMAN. No. 

The CHAIRMAN. So I would point that out. 

I thank the panel for being here. Once again, I think it is we are 

in the beginning of a process, and I appreciate your comments, and 

really appreciate all of you being here and the time you have put 

into it so far. But we are going to continue to explore this because 

it is that important. 

I understand that we have a special guest here today that I 

didn’t know at the time, and I will yield to my good friend, Tim 

Walz, to introduce this guest. 

Mr. WALZ. Well, thank you, Mr. Chairman. As before my closing 

here, as a point of personal privilege, my wife Quinn, a military 

spouse and so much more, has my 10-year-old son, Gus, here. He 

wanted to believe I really had a job, so he is here to see it. So, 

thank you. 

The CHAIRMAN. And have Gus—there he is. 

Mr. WALZ. That is Gus. Well, thank you, Chairman. And we all 

know organizations have written mission statements and unwritten 

mission statements. And as the co-captain of that football team, the 

true mission statement was to be walking today after that football 

game. So, General Bergman, congratulations on accomplishing 

that. 

Thank you all for being here. You are partners, friends, you represent us who are in your organizations. More importantly, you 

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represent those voices of millions of veterans and their families 

who are out there today and can’t be here. And I would say, once 

again, it is not just lip service, that this Committee is proving that 

there is no place on Capitol Hill or no place, certainly in Federal 

Government right now, where the true spirit of working together, 

building collaboration, and trying to move things forward for our 

veterans is actually happening. 

It is one thing to say that, everybody wants to say that, every 

Committee says we are super bipartisan. Well, move things, get 

things done together, and being bipartisan doesn’t mean agreeing 

on everything. But it does, as the General, and the Chairman, and 

so many others have said, it does having the common goal. So we 

know what needs to—we know how this process works. First and 

foremost, all the stakeholders must be included and they must be 

included early, and they must be legitimately included with their 

ideas. 

We must then figure out, using evidence-based decision-making, 

put together plans. Legislation is over at legislative counsel right 

now with folks trying to squirrel this. And then we need to be pragmatic. Not every four-letter word has four letters, and the United 

States Senate is one of those places. And we all know that we have 

to deal with those places. 

We have to make sure that the Senate is on the same sheet of 

music. We need to make sure, before we do anything, we are moving everyone together in the VA. And as we were just mentioning 

up here, that is happening. That is starting to happen that people 

are talking and moving that. 

So nothing is going to be done that violates those basic principles. General Bergman laid them out, I think we are all pretty 

much in agreement with that. Highest quality care, good stewards 

of the taxpayer dollars, and thinking about what is possible. 

But this is the opportunity. I have been saying it, and, General 

Bergman, you said you were last, I have been there, so I know. 

That was 10 years ago that I was sitting down, it was on this side, 

down in the end, saying we needed to have this idea, we needed 

to think about this. 

I remember all of us saying, those wars have been going on for 

5 years and could go on a couple years longer. That is what we 

were saying back in 2007, and that is going to create all kinds of 

things moving that we are going to have to think about. 

So I am grateful you all are here. Mr. Chairman, I once again 

thank you. There is probably not any more difficult thing in the 

realm of dealing with veterans and veterans issues than this topic, 

and you have done it. 

And to the folks sitting here, your good faith effort to approach 

this is so sincerely appreciated because we have to get this right. 

I stick with the statement that I made: time is not on our side. 

This is one of those things that must be dealt with, it cannot be 

kicked down the road. But amongst that, it must be done right because we are not going to get another bite at this thing. This is one 

of those where I truly believe the time is probably right to try and 

do something, and it may take a little longer than we anticipated, 

that is fine, but having the discussion happens now. 

So thanks to all the Members, thanks for the work. 

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And, Mr. Chairman, again, I thank you for your willingness to 

not dodge difficult things, for your willingness to put us in things 

that maybe challenge us and makes us uncomfortable, but gets at 

the heart of what we should do. And I yield back. 

The CHAIRMAN. I thank the gentleman for yielding and his kind 

words. I will answer your question, sort of, Ms. Brownley, in my 

closing comments. 

Medicine is changing almost at light speed, and I don’t think we 

have even begun to see the changes that are going to happen. Dr. 

Crump mentioned telehealth, precision medicine. We are going to 

see things. And, remember, I was on two VA facilities that penicillin had barely been invented and discovered when those facilities 

were opened. 

The facility I had at my hometown was there before there were 

any antibiotics, penicillin, and a hypertensive anything, 1903. And 

that facility is still functioning today as an outstanding VA medical 

center, four-star, I think, soon to be a five-star medical center. 

As I visited Northport and Canandaigua, I looked at those facilities and we were mentioning, I think Mr. Takano mentioned about 

savings, that is not what this is about. It is about getting the VA 

right-sized so it can carry out its mission, which is to take care of 

veterans who have served and were injured, or had conditions that 

occurred because of their service to this great country. 

And I looked at, when I went in there, there are two buildings 

that are historic that the roofs had collapsed, and it is going to cost 

$10 million just to destroy those buildings because they are on the 

historic registry, even if you can do it. That is just at one center. 

And I asked those folks, I said, look, what do you guys do really 

well here? And they have a great PTSD treatment. I said, that is 

something that you do and you do well at this campus, and 

should—you can inpatient put people—we know that mental health 

is a huge need in this country, and 35, 40 years ago we had 

500,000 mental health beds in this country, now we have less than 

50,000. And we see the problem we have now in this country of 

mental health, the needs are not being met. We see those in our 

veteran population. 

So the thing that those injuries that occurred because of your 

service, the VA should focus like a laser beam on. And I looked at 

the five CBOCs they had along Long Island, which is a beautiful 

area, beautiful part of this country if you haven’t visited. I said, 

those things should be updated and really enhanced, and we should 

really be putting those resources so our veteran doesn’t have to 

drive long distances. 

I go to Rochester, and I see Canandaigua, and I think where are 

the veterans going? Well, they are going where the VA is accessible 

to the most VAs. And that is where you brought up and you have 

leasing, which is going to be a huge part of this. And the average 

lease, and I have done it many times in my private practice, is 

about a 3-year thing too. You conceptualize what you want to build 

and you get your contract, you build it, and you move in. VA, it 

is 9 years, and people may have moved by then. 

So they have to be more nimble. We have got to give them the 

tools to do that, that is part of it. We know that we are going to 

vote on our Choice legislation in about 3 weeks. And we know that 

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not only is Choice important to get that done, but we are going to 

implement an EHR change which is going to change how VA carries out its care at the same time. And that is going to be a 6 or 

7, or 8-year process. This is a multi-year process. 

It could be that gathering—and we are going to need to know 

what those networks look like before you can implement the Choice 

Program in October of 2018. And those panels will look different 

as our health care—just like in my own health insurance plan, my 

panel may look different this year than it did last year. So that will 

be a continuum of changes that occur. 

And we mentioned, I think, HR was mentioned about staffing 

and hiring. The VA has hired more nurses and doctors and other 

providers, but it certainly has shortages, and that is where Choice 

will help provide those care, where those shortages are where VA 

doesn’t have those assets in place. 

If it were me and I were a VISN director, I would clearly have 

a vision about where I want—what I want to do with my VISN. 

And there are many of those, as you all know, across the country. 

And what are my strengths, what are my weaknesses, and how can 

I help amplify my strengths and fill in my weaknesses. 

And in thinking about what is care going to look like and one of 

the reasons that we brought the asset review in is to do just that. 

But we have problems that, politically, and we will all admit that 

we are weak when it comes to our districts. I mean, we have a facility in Hot Springs, South Dakota, it is really very black and 

white what should be done and, yet, it isn’t being done. So that is 

one of the reasons that we did that. 

I think what we need to do—and, first of all, I can’t thank you 

enough, I have got a lot of information here and a lot of ideas, I 

just need time to, as we all do, but I think that is what we need 

to do. 

And to Mr. Correa when he mentioned, look, I am a guy that believes when I was a mayor of a city and a planning commissioner, 

I don’t think you turn over those assets, that being property, casually. 

You bring the local community in, can this be used, and I will 

give a perfect example. On our campus at home, at our VA, we 

have a pharmacy school. It is basically a public/private partnership, 

that we built a pharmacy school with private donations, it is a 

state school and it is housed in a rehabbed building on the VA campus in Johnson City, Tennessee. 

So those are the visions that we, as leaders, and as leaders at 

the VISN level and at the local community level, have to have, I 

think, to make this actually work. So I look forward to sitting down 

and continuing to work with all of you all about how we can get 

this process done, because I agree with Mr. Walz, it is absolutely 

mandatory that we do it to provide the care we need for our veterans. 

And, again, I want to thank you all. And I ask unanimous consent that all Members have five legislative days to revise and extend their remarks and include extraneous material. 

Without objection, so ordered. 

Hearing is adjourned. Thank you. 

[Whereupon, at 12:24 p.m., the Committee was adjourned.] 

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A P P E N D I X 

Prepared Statement of The Honorable Mike Coffman 

Mr. Chairman, I would like to begin by thanking you for including my bill in today’s legislative hearing and thank the witnesses for their testimony. 

Mr. Chairman, I think we can all agree that the VA’s sole mission is to provide 

services to our nation’s veterans. 

The maintenance of a 5-star, 24-room boutique hotel, restaurant, and club in 

downtown Paris, France is clearly not included in that mission. 

Therefore, in an effort to get the VA out of the overseas hotel business and focused on its core competencies, I introduced H.R. 2773, the Sell Excess Luxury 

Lodgings (SELL) Act, to authorize the sale of this hotel - ‘‘Pershing Hall.’’ 

Pershing Hall is a building originally procured by the American Legion to serve 

as a memorial to our ‘‘Doughboys,’’ who served in France during World War I. The 

building was transferred to the VA in 1991, and in 1998, the VA leased Pershing 

Hall for a 99-year period to a French firm that redeveloped the property as a luxury 

hotel. 

In recognition of the historic aspects of Pershing Hall, H.R. 2773 requires the 

preservation of architectural details of the exterior and interior of the structure, and 

requires all property of General Pershing and the American Expeditionary Forces 

in France during World War I to be transferred to the American Battle Monuments 

Commission. 

H.R. 2773 also appropriately requires the transfer of sale proceeds to the American Battle Monuments Commission for the maintenance of cemeteries, monuments, 

and memorials dedicated to our men and women in uniform. 

Mr. Chairman, today you will hear the concern that the fair market value will 

not represent the true value of the property because it is encumbered by the VA’s 

lease. Unfortunately, the reality is that the VA negotiated a bad, long-term deal 

that significantly decreased the market value of the property. Even more of a reason 

to get the VA out of the hotel business. 

To address this concern, I plan to amend my legislation to require a condition of 

sale be the appraised value of the property. 

While Pershing Hall is probably a terrific hotel, it makes no sense that the VA 

keeps a luxury hotel in Paris on its books. The VA needs to focus its time and resources on its core mission: taking care of our nation’s veterans. 

Mr. Chairman, thank you for allowing me to testify today on behalf of this legislation and I yield back the remainder of my time. 

f 

Prepared Statement of Joy J. Ilem 

Chairman Roe, Ranking Member Walz and Members of the Committee: 

On behalf of DAV (Disabled American Veterans) I am pleased to present our 

views on draft legislation, the Asset and Infrastructure Review Act of 2017, as well 

as H.R. 2773, regarding the sale of Pershing Hall. As you know, DAV is a non-profit 

veterans’ service organization comprised of 1.3 million wartime service-disabled veterans dedicated to a single purpose: empowering veterans to lead high-quality lives 

with respect and dignity. To help fulfill the promises to the men and women who 

served, DAV advocates for sufficient resources for the Department of Veterans Affairs (VA) health care system to include funding for and adequate staffing levels and 

well-maintained, modern infrastructure to deliver timely, comprehensive, high-quality care to enrolled veterans. 

As the Committee and Congress are aware, the last several years have been tumultuous for the VA health care system-but they have also resulted in historic opportunities for needed reforms. Following revelations of the waiting list scandals 

and access crisis in the spring of 2014, Congress responded by enacting legislation, 

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the Veterans Access, Choice and Accountability Act (VACAA), creating the temporary veterans Choice program, which the Committee is currently working to revise and reauthorize this year. DAV and other veterans service organizations 

(VSOs) supported the temporary Choice program to rapidly address access issues, 

while also working towards long-term reforms and solutions to expand access and 

improve health care outcomes. 

Together with our partners in The Independent Budget (IB)-Paralyzed Veterans 

of America (PVA) and Veterans of Foreign Wars (VFW)-we developed a Framework 

for Veterans Health Care Reform in November 2015. We recommended the development of integrated networks that combine the best of VA and community providers 

to ensure continuous and timely access to care for all enrolled veterans. The IB 

Framework also included the following recommendations regarding VA’s infrastructure: 

‘‘To better align medical care and services with where veterans need that care, the 

IB’s framework would require VA to reassess all currently proposed and future major 

construction projects and find ways to leverage community resources to identify private capital for public-private partnerships (P3) as an alternative and more efficient 

manner to build and maintain VA health care facilities. This would enable VA to 

invest in services the community lacks, while ensuring it continues to provide specialty care, such as mental health and spinal cord injury/disease care, in state-ofthe-art facilities. Future capital infrastructure expansion would be based on need 

and demand capacity assessments, which would incorporate the availability of local 

resources.’’ 

DAV and our IB partners have advocated for years to resolve VA’s many infrastructure challenges, particularly inadequate funding, inefficient construction programs, ineffective sharing authorities and inflexible leasing authorities. We have 

consistently argued that VA must have the ability to build, buy, lease or share 

health care facilities when and where veterans require them, as well as the flexibility to construct, modernize, realign, consolidate or close facilities as veterans’ 

needs and preferences change. Most critically, VA must be provided sufficient funding to maintain, realign and modernize its health care facilities-yet for more than 

a decade the actual appropriations for VA’s Major and Minor Construction accounts 

has been woefully inadequate. 

The first finding of the Independent Assessment mandated by VACAA was that 

the root cause of VA’s access problems was a ‘‘.misalignment of demand with available resources both overall and locally.’’ leading to the conclusion that ‘‘.increases 

in both resources and the productivity of resources will be necessary to meet increases in demand for health care.’’ in the future. Specifically, the Independent Assessment found that the, ‘‘. capital requirement for VHA to maintain facilities and 

meet projected growth needs over the next decade is two to three times higher [emphasis added] than anticipated funding levels, and the gap between capital need and 

resources could continue to widen.’’ Without change, the estimated gap will be between $26 and $36 billion over the next decade. For fiscal year (FY) 2018, DAV and 

our IB partners recommended over $2.5 billion for all VA infrastructure programs; 

however, the Administration requested only $990 million. Unless this trend is reversed, no VA health care or infrastructure reforms can be successful. 

However, it is neither feasible nor advisable to address infrastructure issues in 

isolation from the many other factors involved in reforming the delivery of veterans’ 

health care. As both the Independent Assessment and the Commission on Care report from June 2016 concluded, real transformation of the VA health care system 

will require an ‘‘integrated systems approach.’’ They recommended that reforms necessary in each aspect or domain of VA health care be integrated into an overall plan 

that considers how changes to one part of the system affect the whole system. As 

such, Congress should not consider systemic changes to VA’s health care infrastructure separately without first determining how, when and where VA will deliver 

health care services to enrolled veterans. 

In fact, last week the Committee conducted a roundtable discussion on draft legislation to authorize a replacement veterans’ Choice program that would create a new 

model of health care delivery integrating community providers into VA networks to 

fill gaps in access, similar to the IB Framework proposals. The Senate and VA are 

also working on similar plans and legislation to reform how VA delivers care. Those 

efforts should be merged with efforts to reform VA’s infrastructure in a plan that 

is cohesive and that overlaps. For example, the draft infrastructure bill under consideration today calls for a one-time capacity and market assessment whereas the 

draft choice bill calls for annual assessments. Further, decisions about how to structure integrated networks to achieve the optimal balance between VA and community providers are both based on and will help determine necessary changes to VA’s 

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existing health care infrastructure. Given the overarching goals of VA health care 

reform, it is impossible to separate how health care is delivered from where it is 

delivered. Therefore, DAV recommends that the two draft bills - one to reform VA 

infrastructure and the other to revise the choice program - be merged into a single 

bill focused on comprehensive reform of the VA health care system. 

Furthermore, to ensure the long-term success of VA health care and infrastructure reforms, Congress must also address other interrelated challenges facing the 

Department. In addition to adequate and timely resources, VA needs to improve its 

HR policies to recruit, hire and retain high-quality personnel, particularly clinicians, 

as well as modernize its IT systems, including the new electronic health care record 

system. Without adequate resources to sustain these critical changes and meet all 

its statutory missions, no legislative reforms will be fully successful. 

Mr. Chairman, while we share your intention of providing VA with greater control 

over its infrastructure, there are important changes and improvements that need to 

be made to the legislation to achieve that goal. 

As currently drafted, the Asset and Infrastructure Review Act of 2017, has the 

same framework as the Defense Base Closure and Realignment Act of 1990, legislation enacted to facilitate the closure of military installations. Although both involve 

changes to physical infrastructure, there are significant differences between the two 

departments. For example, the Department of Defense (DOD) has tremendous flexibility in planning facility locations since military personnel can be ordered to relocate. By contrast, VA health care decisions are driven by the needs of local veteran 

populations and veterans cannot be compelled to relocate. In a military BRAC (base 

realignment and closure), the most affected stakeholders are local communities who 

benefit from the level of economic activity generated by the presence of a military 

installation. Decisions to close military bases in some communities often result in 

a significant negative economic impact to businesses and workers. When VA closes 

a medical facility, the most affected stakeholders are veterans who rely on the system for some or all their medical care. Decisions about how and where to deliver 

medical care should never result in veterans losing access to care. Additionally, a 

military BRAC involves national security issues and classified data, justifying a 

need for secrecy, but a VA facility review has no similar justification for limiting 

the ability of veterans and the public to have full access to all data and deliberations. 

For these and other reasons, the military BRAC process was designed to be 

closed, non-transparent and inflexible to limit the engagement and influence of public stakeholders. While this approach may be necessary in the context of closing 

military bases, both for national security and political reasons, it would be inappropriate and counterproductive in trying to reform the delivery of veterans’ health 

care. The draft legislation under consideration establishes a very specific asset and infrastructure review process modeled closely on the BRAC process. The legislation establishes a multi-tiered approval procedure that includes the VA Secretary, an independent Commission, the President and Congress. First, the Secretary would propose both the criteria to be used for making recommendations to modernize, realign, 

consolidate or close VA facilities, and subsequently would propose a comprehensive 

list of facility changes. Next, an independent Commission comprised of 11 individuals appointed by the President, after consultation with Congress, would review the 

recommendations using the criteria previously established. Based on its independent judgement, and with limited public input, the Commission would either approve and forward to the President the full list of recommendations, or would modify, approve and forward a revised list of recommendations. Next, the President 

would either approve the full list and forward it to Congress, or he would disapprove 

in whole or in part the recommendations and return them to the Commission. If 

returned, the Commission would then reconsider and make revised recommendations to the President, who would either approve and forward to Congress, or by 

direct action or inaction, disapprove the recommendations, which would end the entire process at that point. 

Finally, if recommendations are approved by the President, Congress would have 

45 days to pass a motion of disapproval of the entire list of facility recommendations, otherwise it would be implemented. Throughout this multistep review process, 

there are limited opportunities for stakeholder and public review and input, and the 

entire process would take less than two years. 

Mr. Chairman, we have significant concerns about the flexibility and timing of the 

asset review process as currently written in the draft legislation. The legislation requires that there be a single, comprehensive list of recommendations for all VA facility closings, realignments, consolidations or modernizations-essentially an all-ornothing proposition. While such inflexibility may have been necessary for extremely 

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difficult and politically sensitive base closure decisions, it creates more problems 

than it might resolve for VA health care infrastructure decision-making. For example, what happens in the years following the completion of this asset review process 

if unexpected veteran migration results in changes in the level of demand for care 

in certain communities, or if community partners disengage from VA partnerships 

due financial or business reasons? Would VA need to re-establish another comprehensive asset review process to make additional facility decisions? 

Given the rapidly changing nature of medicine and the unpredictable market dynamics in the American health care landscape, we believe it is essential that VA 

have the flexibility to quickly adjust and respond to market changes to avoid negatively impacting enrolled veterans. Rather than a comprehensive, all-or-nothing, 

one-time infrastructure review process, VA needs to have the authority and flexibility to make decisions through an iterative process as demand for care and market 

conditions continue to evolve over time. Specifically, we recommend that facility recommendations by the Secretary be done in phases, with the first phase consisting 

of buildings and properties that are currently unused or significantly underused. 

The second phase, and all additional phases, should be conducted following the completion of capacity and market assessments, which should be conducted every couple 

of years, when and where warranted. A phased approach will allow VA to quickly 

eliminate unnecessary facilities and their associated costs, while ensuring a more 

deliberative, flexible and iterative process that allows VA’s infrastructure to expand 

or contract as required in each individual market across the country. 

DAV also has significant concerns about the timing and duration of the various 

reviews and approvals delineated in the current draft legislation. As discussed 

above, decisions regarding infrastructure should be made after decisions are confirmed regarding how, where and who will deliver health care in the future, including the development of new regional integrated networks and decisions about the 

role of community care. Therefore, the first stage in the asset review process-establishing criteria for infrastructure changes-should not begin until after decisions have 

been finalized regarding the arrangement of regional integrated networks and community care. Second, we recommend that the time allotted to the Secretary for proposing criteria be extended to no less than six months to allow sufficient time for 

public and stakeholder input, including due consideration of that input, with at 

least an additional 90 days allotted for public comment and review before publishing 

final criteria. Third, we recommend that if the asset review process results in an 

adopted set of recommendations for facility changes, the Secretary be required to 

certify to Congress that he has secured the necessary funding, authorities and 

agreements with appropriate community partners, before initiating any actions to 

close, consolidate or realign existing facilities currently delivering care to veterans. 

The Secretary should also be required to certify that no enrolled veterans will lose 

access to health care due to the enactment of these recommendations. In addition, 

the definition of ‘‘modernize’’ should be amended to specifically include the ‘‘construction, purchase, lease or sharing of facilities.’’ 

Mr. Chairman, DAV is equally concerned about the lack of openness and transparency in the proposed asset review process. By using the BRAC statute as the 

starting point for this draft legislation, the bill inherited a very closed process regarding information sharing and deliberations. For example, although the bill requires that meetings of the Commission be open to the public, the legislation specifies that ‘‘proceedings, information and deliberations’’ of the Commission only be 

made available, upon request, to a very limited number of members of relevant committees of the House and Senate. While there may have been national security reasons for including such limits during a military BRAC process, there should be no 

such concerns for VA facility decisions. Therefore, we recommend that the bill be 

amended so that whenever decisions, reports or other information is transmitted or 

made available to the Commission, Congress or the President, it should also be 

made available to the public at the same time. 

Finally, and perhaps most importantly, DAV is concerned about the lack of stakeholder engagement throughout the entire asset review process, another adverse consequence of modeling the bill on the BRAC statute. It is critical that stakeholders 

who will be most affected by the outcomes of this asset review process be fully engaged from the beginning. Not only will this result in a better set of decisions, it 

will also help build the support and confidence necessary to enact and enforce the 

recommendations and outcomes of the asset review process. Some may recall that 

another facility review process from 15 years earlier-VA CARES (Capital Asset Realignment for Enhanced Services)-was met with opposition and was largely ineffective in part due to the lack of early and frequent engagement with local veterans 

from impacted communities and national VSOs. 

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As demonstrated by recent successful reforms related to appeals modernization, 

the forever GI Bill and accountability legislation, engaging stakeholders early and 

often is essential to successfully enacting meaningful reforms. Therefore, DAV recommends that the draft legislation be amended to: 

• Require the Secretary to consult with VSO stakeholders before proposing criteria for the asset review process; 

• Require that veteran preferences for receiving health care be included among 

the criteria proposed; 

• Require the Secretary to consult with VSO stakeholders, including local veterans in each regional market, during the capacity and market assessments; 

• Require that market assessments consider the unique ability of Federal Health 

Care to retain a presence in rural areas where commercial providers may not 

exist or are at risk of leaving; 

• Require that market assessments consider how deficiencies may be filled by expanding VA capacity through extended hours of operation, increasing personnel 

or expanding treatment space through construction, leasing or sharing of health 

care facilities; 

• Require the Secretary to consult with VSO stakeholders before making facility 

recommendations; 

• Require the Secretary, as part of the justification for the facility recommendations, to also include information that: 

• Details how and where enrolled veterans will receive care following facility 

changes; 

• Identifies the resources and authorities necessary to achieve the recommended 

facility changes; and 

• Identifies any non-VA partners who will provide care to veterans once facility 

changes are made, including contingency plans should VA fail to reach agreement with appropriate partners; 

• Require the Commission to hold hearings in all regions where closings, consolidations or realignments are proposed by the Secretary or the Commission; 

• Revise the language requiring each public hearing of the Commission to include 

‘‘a veteran’’ to instead require ‘‘open public hearings that allow as many witnesses as possible to testify before the Commission, with preference provided to 

current users of VA health care in that region;’’ and 

• Remove the language requiring witnesses to testify under oath, a requirement 

that does not exist for witnesses at most Congressional hearings. 

Finally, DAV believes that any Commission created to review the future of VA 

health care facilities must first and foremost represent the interests of the users of 

that system. Currently, the draft legislation would only require that three members 

of the Commission be veterans. We recommend that the draft legislation be amended so that the President is required to ‘‘consult with congressionally-chartered, 

membership and resolution-based veterans service organizations concerning the appointment of three members’’ and that the Commission be required to include ‘‘at 

least six members who are currently enrolled in and have used the VA health care 

system during the preceding year.’’ 

Mr. Chairman, although we have significant concerns with and substantial recommended changes to the draft legislation, we share the overall goal of modernizing, realigning and right-sizing VA’s health care infrastructure so that it can deliver timely, high-quality care to our nation’s ill and injured veterans. We understand that this will require difficult decisions about facilities in some locations; however, we are convinced that the only way to succeed in this endeavor is with a process that is flexible, open, transparent and fully engages veteran patients and stakeholders. We are committed to working with you and the Committee to achieve our 

shared goals of reforming, modernizing and sustaining the VA health care system 

so that it can continue to meet the needs of enrolled veterans far into the future. 

H.R. 2773, Authorization of Sale of Pershing Hall 

This legislation would amend Section 403 of the Veterans’ Benefits Programs Improvement Act of 1991 by adding at the end a new subsection to authorize the sale 

of Pershing Hall in Paris, France. Pershing Hall was dedicated in 1927 to recognize 

the service and sacrifice of the American Expeditionary Forces and the General of 

the Armies General John J. Pershing. In 1935 the building was purchased by the 

United States government, and in 1991 it was transferred to the Department of Veterans Affairs (VA). However, since 1998 this building has been leased out to a 

French firm that continues to use this property as a luxury hotel. 

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This legislation directs that an independent assessment be conducted to ascertain 

the property’s fair market value and requires that the purchaser preserve the architectural details of the exterior and interior of the building. In addition, it directs 

the Secretary, on or before the date of sale, to transfer to the American Battle 

Monuments Commission any pertinent historical property in the possession of the 

Department. The funds received by the Secretary pursuant to the sale of Pershing 

Hall would also be transferred to the American Battle Monuments Commission. 

DAV does not have a resolution specific to this issue and has no formal position 

on the bill. 

Mr. Chairman, that concludes my testimony and I would be happy to answer any 

questions that you or Members of the Committee may have. 

f 

Prepared Statement of Louis J. Celli Jr. 

Chairman Roe, Ranking Member Walz, and distinguished members of the Committee on Veterans’ Affairs; on behalf of National Commander Denise H. Rohan and 

The American Legion, the country’s largest patriotic wartime service organization 

for veterans, comprised of more than 2 million members, and serving every man and 

woman who has worn the uniform for this country, we thank you for inviting The 

American Legion to testify today and share our position regarding The Department 

of Veterans Affairs’ (VA) Asset Infrastructure Review. 

Draft legislation, the Asset and Infrastructure Review - or AIR - Act of 2017 

VA currently maintains a complex physical infrastructure of thousands of buildings that deliver coordinated care to more than nine million enrolled veterans. Over 

the years, many of the buildings VA uses to deliver this care have been left to deteriorate in favor of fiscal savings, leaving veterans with a collection of aged infrastructures. The VA, Veteran Service Organizations (VSOs), Congress, and even the 

Commission on Care have long known that VA needs to clean up their physical inventory of properties by: discarding some, rehabilitating others, and rebuilding 

where demand requires it; and this rehabilitative process is what needs to happen 

today. 

Since we are addressing infrastructure, capacity, and fiscal responsibility through 

this legislative discussion draft, The American Legion requests that this Committee 

use this legislation as a vehicle to expand VA’s leasing authority to avoid future 

funding and jurisdictional hurdles that VA and Congress have struggled with over 

the past four years. 

The American Legion appreciates the Committee recognizing their need to support the Secretary as he works toward streamlining and organizing the physical 

property VA is responsible for maintaining. We also applaud the Committee for ensuring that VSOs are integral in this process through round table discussions, staff 

meetings, and this hearing. 

Comparisons have been made between the proposed Asset and Infrastructure Review process contemplated by this draft legislation and the Base Closure and Realignment Commission (BRAC) process the Department of Defense (DoD) has used 

to realign and close excess bases. It is important to note that BRAC was established 

because DoD had reduced its active duty force from nearly 3.8 million active duty 

personnel following Vietnam, to just over 1.3 million in 2000. This is clearly not the 

case with VA, and the need to restructure is based on the need to refurbish and 

modernize infrastructure so that VA can provide 21st century medicine to a growing 

population of veteran patients at a controlled cost with superior results. 

The American Legion fundamentally disagrees with the establishment of a commission to oversee or assist the Secretary with structural realignment and generally 

opposes such a recommendation believing that the Secretary already has sufficient 

statutory authority to reorganize infrastructure, and would only need some minor 

legislative assistance from Congress, legislative changes that VA has already shared 

with this Committee in the past, and has shared here again today. But if establishing a Commission is the only way Congress will agree to financially invest in 

this effort, then The American Legion would require the following language be 

amended as follows; 

1. Page 2, line 8 (A) APPOINTMENT - Change from 11 members to 9 members 

with three of those members appointed from Congressionally chartered Veteran 

Service Organizations (VSO). Further, language needs to be added that directs ‘‘a 

quorum must consist of all nine members, and all official votes must be ratified by 

no less than two-thirds of the voting members.’’ The next acceptable number of 

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1https://www.gsa.gov/policy-regulations/policy/federal-advisory-committee-management/legislation-and-regulations/the-federal-advisory-committee-act 

Commission members would be 12, with no less than 4 members appointed from 

Congressionally chartered VSOs. Additionally, a VSO seat on this commission must 

belong to the VSO, not the individual representing the VSO, and the VSO has sole 

authority to replace its representative at any time; any vacation of the seat shall 

be refilled by the VSO within 10 business days. 

2. Page 3, line 16 (A) veterans, reflecting current veteran demographics: This 

needs to be further defined. Reflecting current demographics of VA healthcare patient population is what The American Legion would recommend, as this would be 

the population most affected by future changes based on this initiative. 

3. Page 4, line 12 (E): ‘‘at least three members’’ needs to be increased to ‘‘at least 

four members’’ unless item 1 above is changed to nine members. 

4. Page 4, line 15 (d) Meetings - The Commission shall meet only during calendar 

years 2018 and 2019. This should be amended to reflect 2018, 2019, and 2020 as 

needed. It is widely believed that VA will need at least 18 months to complete the 

required healthcare market surveys before they will be ready to publish the selection criteria as outlined in section 403. 

5. Page 6, line 16 (f) PAY AND TRAVEL EXPENSES - The American Legion understands that the members to be selected for this Commission would represent 

multimillion dollar organizations as well as other senior executives who should be 

well capable of serving at the pleasure of Congress for the sole purpose of volunteering, pride, patriotism, and the prestige of serving on this important Commission. 

It is for this reason The American Legion opposes Committee members being paid 

or being enriched in any way as a result of serving on this Commission, and that 

includes the Chair as outlined on page 7, line 3 (B). This is not, however, our position on the fulltime support staff as described on page 8 line 7 (2) RATE OF PAY. 

6. Page 9, line 13 (C): Strike this section unless there is some prohibition as outlined in the Federal Advisory Committee Act. 1 If this Commission were fortunate 

enough to have an appointee that had been instrumentally involved in this process 

as an employee at VA within 12 months of appointment, The American Legion is 

at a loss to understand the logic of how this could possibly present a conflict. On 

the other hand, contractors who would be in a positon to benefit financially from 

the outcome of the Commission’s work should be excluded. 

7. Page 14, line 1 (H): Remove this clause. The Secretary has no experience or 

access to information that would qualify him to make any such determination on 

any other than his own agency. 

8. Page 14, line 8 (J): insert ‘‘a reasonable sampling of’’ before ‘‘Local’’. It would 

not be feasible for the Commission or the VA to conduct public field hearings at 

every proposed location targeted for infrastructure review, especially if the proposed 

realignment only involved a storage or maintenance building. The language should 

include mandatory field hearings for any facility that provides direct medical services for the Department. 

9. It needs to be understood that the market analysis as directed by the clause 

in page 14, line 22 (i),(ii),(iii),(iv),(v) will take more time than this bill allows for, 

which is why The American Legion recommends extending the dates set forth in 

this proposed draft to dates agreed upon by the Department. 

10. Page 19, line 20 (C) needs to be changed to: The Commission ‘‘will recommend 

changes to the Committees of Veterans Affairs of the House and Senate’’. The American Legion adamantly opposes granting the Commission unilateral authority to 

change or amend the recommendations of the Secretary. 

11. A clause needs to be added that prohibits land sold or granted to the VA from 

being included in any recommendations by this Committee that would result in violation of a trust, agreement, or deed such as would be the case with the property 

located in West Los Angeles, California. 

Without these small but extremely significant changes, The American Legion 

WILL NOT support this bill and will aggressively oppose any efforts to allow this 

bill to move forward. 

Provided these issues can be sufficiently addressed, The American Legion would 

be able to support this effort and further supports the overall theme of what this 

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2https://www.legion.org/preamble 

3https://www.congress.gov/bill/102nd-congress/house-bill/1047/text 

Committee is trying to do - reorganize, build capacity, and eliminate waste within 

The Veterans Health Administration at the Department of Veterans Affairs. 

We particularly appreciate that this effort would be led by the Secretary of Veterans Affairs, beginning with the establishment of selection criteria, through the selection of locations, and including the maintenance of funds responsible for carrying 

out this much-needed reform. 

We also fully support the provision starting on page 12, line 21 (A) & (D) that 

calls on the Department to establish a market analysis for providing healthcare for 

eligible veterans, and again remind this Committee that this market analysis will 

take time to complete, analyze, and implement, and the only realignment that can 

possibly be committed to before this analysis is complete would only involve the 

1,100 structures the Secretary has already identified for disposal. All further restructuring will need to be recommended after the healthcare market analysis has 

been completed. 

With an appreciation and understanding of these requirements, The American Legion asks this committee to consider structuring this project into more than one 

round of recommendations, allowing VA and the Commission to fully develop the 

research necessary to implement this program properly, while allowing sufficient 

time for proper analysis and execution. 

The American Legion could support the AIR Act of 2017 with the changes 

recommended above. 

H.R. 2773 

To authorize the Secretary of Veterans Affairs to sell Pershing Hall 

Nearly 100 years ago, members of the American Expeditionary Force in World 

War I came together to ‘‘preserve the memories and incidents of our associations 

[in] the Great War[s]’’ 2 and as the 100th anniversary of our founding approaches, 

The American Legion is still dedicated to that mission. As such, a primary charge 

of The American Legion is to ensure the sacrifices of America’s military is not forgotten. 

The American Legion fought for the dedication of a memorial building in Paris, 

France, the city where The American Legion was formed, to recognize the service 

and sacrifices of the members of the American Expeditionary Forces and General 

of the Armies John J. Pershing. The memorial building was a townhouse in the 

heart of Paris that would become known as Pershing Hall. This memorial was sanctioned by resolution at our 1927 National Convention. Eight years later, in 1935, 

Congress authorized funds to perpetuate the memorial and transfer the building to 

the United States Government under the auspice of The American Legion. In 1991, 

the building was transferred to the Department of Veterans Affairs (VA) with the 

intent that it would be used to ‘‘administer, operate, develop, and improve Pershing 

Hall and its site in such manner as to the Secretary determines is in the best interests of the United States, which may include use of Pershing Hall to meet the need 

of veterans. To meet such needs, the Secretary may establish and operate a regional 

or other office to disseminate information, respond to inquiries, and otherwise assist 

veteran and their families in obtaining veterans’ benefits’’. 3 Unfortunately, the 

building was not used in this manner, but instead, the VA leased the building to 

a boutique hotel on a 99-year long lease. 

Through all these actions, it was the hope and wish of The American Legion that 

Pershing Hall retain its original purpose, as a memorial and focal point to honor 

the memories and sacrifices of the men who had fought in World War I, and as a 

location for veterans in the region to gain assistance from the VA. Although The 

American Legion does not fully agree with this legislation, we do agree with the 

bill’s sponsor, Representative Coffman, that the VA is not capable of appropriately 

maintaining this location while meeting the congressional intent of the 1991 legislation. 

Currently, the Pershing Hall building, in the prime Paris neighborhood of the 

Champs Elysees, contains a luxury hotel and spa, where guests can stay for upwards of $450 to $900 a night. The focus and purpose as a place of remembrance 

seems gone by the wayside. The building is available to veterans’ organizations 

three days a year, but access seems to be difficult to obtain. When The American 

Legion asked the government to assume control of the building, it was never imagined that Pershing Hall would be used for any purpose other than as a memorial 

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4https://archive.legion.org/handle/123456789/5798 

5https://www.congress.gov/bill/102nd-congress/house-bill/1047/text 

and VA service office in Paris for those who had served in the First World War and 

subsequent wars. 

This legislation would authorize VA to divest itself of the property and transfer 

the monies resulting from the sale to the American Battle Monuments Commission 

(ABMC). The legislation would also provide for the transfer of the artifacts and 

items associated with the building to ABMC. 

The preservation of these artifacts and the history they represent is a major concern of The American Legion. The materials deserve to be kept together for the 

original purpose, to honor and remember General Pershing and those who fought 

in World War I. The American Legion wants to work with VA or ABMC to ‘‘establish permanent American Legion custodianship of the Pershing Hall art, artifacts, 

furnishings, memorabilia and other items so that they can be interpreted for public 

display, and protected from damage or disappearance.’’ 4

The American Legion has serious concerns with selling Pershing Hall. Currently, 

the building is in a 99-year long lease with a company that renovated it to become 

a hotel. The assessed value, according to a report developed by a French appraisal 

company, values the building without the lease at 70 million Euros or 82 million 

U.S. dollars. However, with the current lease in place, the value of the building is 

appraised at 7 to 8 million Euros. The new owner of the building would be required 

to honor the 99-year long lease, which lowers the value drastically. 

American Legion representatives in Paris have learned that the intent of the hotel 

owner is to buy the building using ‘‘first rights of refusal’’ at the assessed value of 

7 to 8 Euros when the building becomes available for purchase. The owner then 

wishes to terminate the lease once they have ownership of the building. By doing 

so, they would automatically own a building worth 82 million dollars. The American 

Legion has also heard that the intent is to then sell the building, with the new 

value of 82 million dollars, and open a chain of Pershing Hall hotels around France. 

Again, when The American Legion transferred ownership of Pershing Hall to the 

Federal government, we never expected this building to be used in such fashion. We 

are disheartened that Pershing Hall is not a military memorial or space for veterans 

to receive information about VA benefits but instead a boutique hotel with an owner 

intent on making millions of dollars off the Federal government. We are even more 

concerned with the blatant disregard to the second or third order effects of selling 

this building to a private organization. 

The American Legion believes that Pershing Hall should remain in the ownership 

of the Federal government. We are displeased as to how VA decided to use the 

building but also understand that America, its people, and the need for memorials 

and VA assistance will be around in 99 years once the lease is terminated. 

If Congress is willing to wait until the lease has ended so that veterans will have 

a location to gain assistance, The American Legion is willing to wait as well. To ensure this historical American building is protected, we recommend either transferring this building to ABMC or amending the statute deriving from Public Law No: 

102–86 from: 

‘‘administer, operate, develop, and improve Pershing Hall and its site in such manner as to the Secretary determines is in the best interests of the United States, which 

may include use of Pershing Hall to meet the need of veterans. To meet such needs, 

the Secretary may establish and operate a regional or other office to disseminate information, respond to inquiries, and otherwise assist veteran and their families in 

obtaining veterans’ benefits’’, 5

to: 

‘‘administer, operate, develop, and improve Pershing Hall and its site in such manner as to the Secretary determines is in the best interests of the United States, which 

shall include use of Pershing Hall to meet the need of veterans. To meet such needs, 

the Secretary shall establish and operate a regional or other office to disseminate information, respond to inquiries, and otherwise assist veteran and their families in 

obtaining veterans’ benefits’’. 

We would also recommend adding a clause that protects the building from sale 

to a private organization in the future. 

The American Legion is grateful to Representative Coffman for his ongoing work 

with The American Legion and his continued work on behalf of veterans, and respects the fact that he is doing what he feels is right, as a follow up to ensuring 

the VA medical Center in Aurora Colorado was sufficiently funded, but we cannot 

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6The American Legion Resolution No. 9 (2016): Transfer Custodianshipo of Pershing Hall 

Building and Artifacts to the American Battle Monuments Commission 

support legislation that would sell an American monument to a private company, 

thereby losing an American historical monument. 

We feel that this legislation is a short sighted attempt and a quick fix to a larger 

issue within VA, and ultimately by selling the building, veterans lose. It is disconcerting and troubling that this site could have drifted so far from its initial intended purpose as a place of remembrance and history. We look forward to working 

with Congress to find the best outcome for this historic building. 

Using resolution No. 9, Transfer Custodianshipo of Pershing Hall Building and 

Artifacts to the American Battle Monuments Commission, which supports legislation to transfer custodianship of the Pershing Hall Building and artifacts from the 

Department of Veterans Affairs to the American Battle Monuments Commission 

(ABMC), and ABMC be directed to restore, preserve and display all artifacts from 

Pershing Hall, including those currently in storage, in a dignified and respectful 

manner either in Pershing Hall itself, or in ABMC or other federal government 

properties. Because H.R. 2773 goes against this resolution, we cannot support. 6

The American Legion opposes H.R. 2773. 

Conclusion 

The American Legion looks forward to continuing to work closely with VA and 

this Committee on these important issues and we applaud the Committee for working with VSOs and VA as partners to ensure that The Department of Veterans Affairs is properly structured to meet the needs of the 21st century veteran. 

As always, The American Legion thanks this Committee for the opportunity to explain the position of the over 2 million veteran members of this organization. For 

additional information regarding this testimony, please contact Mr. Derek 

Fronabarger at The American Legion’s Legislative Division at (202) 861–2700 or 

dfronabarger@legion.org. 

f 

Prepared Statement of Carl Blake 

Chairman Roe, Ranking Member Walz, and members of the Committee, on behalf 

of Paralyzed Veterans of America (PVA) I would like to thank you for the opportunity to testify on this critical subject. There is no doubt that the Department of 

Veterans Affairs (VA) capital infrastructure footprint needs assessment and realignment to properly meet the demand for health care across the system. As emphasized 

in The Independent Budget Policy Agenda for the 115th Congress released in January of this year, we believe that VA must make a concerted effort to right-size its 

infrastructure, in light of the amount of unused and underutilized capacity in the 

system. To that end, we appreciate the Committee conducting the recent round table 

to bring all stakeholders into the discussion about how to proceed with necessary 

infrastructure realignment. 

It is important to note that the Commission on Care addressed the need for an 

asset review process in its final report released in 2016. In fact the Commission report explicitly stated: 

Congress should enact legislation, based on DOD’s BRAC model, to establish a 

VHA capital asset realignment process to more effectively align VHA facilities and 

improve veteran’s access to care. Creating a robust capital asset realignment process 

is vital because previous capital divestiture efforts have failed. This process should 

offer a level of rigor far beyond what currently exists for repurposing and selling capital assets. It should require VHA to.conduct locally-based analyses of capital assets. 

Information generated would be used to assist an independent commission, established under the legislation, in making recommendations regarding realignment and 

capital asset needs. The independent commission would conduct a thorough, one-time 

process, to include making site visits and holding hearings to inform recommendations that would constitute a proposed national realignment plan.The commission 

would be empowered to implement the recommendations unless, within a specified 

timeframe, Congress disapproves the plan on an up or down vote. 

The draft bill presented today suggests that the Committee is interested in pursuing this recommendation as outlined in the Commission report. However, we cannot emphasize enough that we are not convinced that a Base Realignment and Cloleonard.horne on VACREP0180 with DISTILLER

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sure (BRAC) modeled concept, as previously used by the Department of Defense 

(DOD) is the most effective way for VA to realign its capital footprint. This is the 

position we took on the Commission’s recommendation last summer and our position 

has not significantly changed since then. That being said, PVA generally supports 

the intent of this proposal, assuming the intent is to right-size the VA and not simply use this opportunity to reduce the footprint of VA for the purpose of fulfilling 

a promise for greater community care access and cutting spending. 

If the Committee feels the need to pursue a BRAC process, we believe it is imperative that you consider the recommendations offered by the participants in that 

round table last month as you proceed with consideration. Unfortunately, this draft 

bill does not include any changes to the original discussion draft that reflects the 

concerns raised by the Government Accountability Office (GAO), the Congressional 

Research Service (CRS), members of the Committee, and veterans’ service organization (VSO) stakeholders who participated in that round table. 

The fundamental flaw in this proposal is it ignores the most important recommendation/point made by the experts from GAO and CRS. Representatives from 

GAO specifically outlined the deliberative process that must occur in order to execute an effective BRAC process. The steps in that process include: 

1. Establishing clear goals that consider funding and alignment and that reflects 

the priorities of the Secretary. 

2. Developing selection criteria for facilities. 

3. Developing a method to effectively estimate costs and savings. 

4. Establishing the organizational structure (the Department of Defense created 

BRAC teams). 

5. Utilizing a common analytical framework. 

6. Involving audit teams, to include the IG and GAO, to verify data accuracy and 

reliability. 

The key recommendation supporting the entire process outlined above is that VA 

needs sufficient time to plan the process before executing it. GAO explained that 

DOD had fully three years before a BRAC Commission was empaneled to consider 

the infrastructure alignment of DOD. Meanwhile, this bill establishes a process 

whereby the VA will complete all of its preparatory work within one year from now 

and the Commission will then submit its final recommendations to Congress within 

six months following that date (by May 2019), effectively giving VA and the Commission only 18 months to outline the complete realignment of the infrastructure 

footprint of the Veterans Health Administration (VHA). The draft legislation essentially ignores what GAO identified as the most critical point to ensure success of 

this process-time. In fact, the most important step of this process as identified by 

GAO and CRS-establishing goals, setting selection criteria, and developing the cost 

methodology-has to be completed by March 1, 2018, per the provisions of this draft 

legislation. Based on the recommendations of GAO, a more reasonable assumption 

for completion of that phase would be no sooner than 2019, or as far out as 2020 

if the DOD model is followed. This bill establishes a timeline that almost certainly 

will doom VA to failure in this process. 

Moreover, this legislation appears to be putting the cart before the horse. We 

strongly believe that VA should have the opportunity develop and put into operation 

its integrated health care network before any decisions are made about what the 

footprint of VA should look like. It makes no sense for VA to make decisions about 

what its infrastructure alignment will be without first understanding what its capacity to deliver services currently is and how an integrated network must be designed to enhance that capability. Central to that effort is the completion of a thorough market assessment before the network can be fully established and implemented. And yet, this bill presumes that VA will conduct a complete market assessment of the entire VA health care system by this time next year. The VA itself emphasized the near impossibility of that task during the recent round table. GAO and 

CRS similarly expressed concerns with that expectation. In fact, the VA only recently finished three pilot market assessments that took several months to complete. This bill requires modification to its overall timeline in order to accommodate 

more time for market assessment if the Committee wants to ensure there is a thorough and effective asset review process. If DOD was given three years to prepare, 

and the scope of the VA health care system is much larger than the footprint of 

DOD bases when its BRAC was conducted, the Committee must extend significantly 

the timeframe established in Section 403 of this proposed bill. 

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Additionally, the provisions of this legislation that require the market assessment 

are principally focused on how community care can be better leveraged to expand 

capacity rather than how the VA itself can build its own internal capacity. Those 

provisions only seem to affirm the notion that community care is the only viable option where lack of capacity exists. We respectfully disagree with this assertion. 

We also have serious concerns that fitting a BRAC model to VA presumes that 

the nature of the VA health care system is not fundamentally different from the 

DOD base alignment that was considered during its own BRAC process. This proposal ignores the fact that the DOD BRAC addressed a static military population 

and simply consolidated and moved units to fit its planned infrastructure alignment. 

It was relatively easy, though not politically, to simply move military families to 

new locations to support the force realignment. This fact does not apply to the VA 

health care system and the population it serves. Decisions to close or downsize a 

VA medical facility will have a direct impact on the veteran population being actively served in that selected community. That was not a real issue with base, and 

by extension force, realignment in DOD. This is why the market assessments will 

be critical to this process. 

We wonder what the impact of initiating a BRAC process will be on current major 

and minor construction activities at VA. When VA initiated its Capital Asset Realignment for Enhanced Services (CARES) process nearly 15 years ago, the most 

devastating result of this process was the moratorium placed on virtually all construction for a two-year period while the process was conducted. Arguably, the VA’s 

infrastructure is in the condition it is in now because no new resources were invested in the system during that time. Additionally, Congress has compounded that 

problem every year since that time by woefully underfunding the major and minor 

construction requirements of VA. Many facilities are now in serious decline simply 

because they were not upgraded or modernized, and because Congress continues to 

provide inadequate funding for VA’s infrastructure needs, and now many of those 

facilities face the possibility of closure because of that neglect. 

With the establishment of an Asset and Infrastructure Review Account we believe 

that Congress will simply ignore its responsibility to provide critically-needed funding for ongoing construction projects in an effort to wait for the outcome of the Commission. This is an unacceptable proposition for PVA. Major and minor construction 

should not be simply put on hold while this BRAC process plays out. 

Reviewing the proposed legislation also begs one other important question: why 

is only VHA being considered in this process and not all of VA, to include facilities 

of the Veterans Benefits Administration (VBA) and the National Cemetery Administration (NCA)? The individual administrations within VA do not operate separately 

in their own vacuums. They are interconnected and mutually supporting, particularly with regards to VHA and VBA. Significant changes to the footprint of VHA 

could obviously have an impact on the other organizations. Moreover, if Congress 

is serious about doing a thorough asset review, then perhaps all parts of the VA 

should be included in that discussion. 

We appreciate the fact that the Committee recognized the objections raised about 

the original version of this legislation presented earlier this summer that excluded 

veterans’ service organization involvement in the Commission and has since added 

the requirement that at least three of the members of the Commission must come 

from congressionally-chartered VSOs. The perspective that VSOs can bring to this 

process is frontline experience with VA facilities. With that in mind, it is important 

that we emphasize that PVA is the only congressionally-chartered VSO with a National Architecture program that is regularly involved in facility design and development at VA. We are the only organization that conducts thorough capacity assessments of the VA, in particular the spinal cord injury/disease (SCI/D) system of care, 

on an annual basis. We hope that our experience in dealing directly with VA in this 

capacity will be reflected when staffing for the Commission is considered. 

With regards to perceived savings from a BRAC process, it is important to point 

out that GAO and CRS both confirmed that DOD did not achieve near the projected 

savings from closure and realignment of its facilities. Moreover, the savings that 

were generated were not realized until much later following the process. However, 

we cannot emphasize enough that any savings generated by the asset and infrastructure should be reinvested directly into VA, not sent back to the Treasury simply for deficit reduction. Savings from this process have the potential to generate 

sorely needed resources to strengthen the VA SCI/D system of care, and other specialized programs. Many existing SCI/D acute care facilities are generally fatigued 

and in some cases have been deemed unsafe by the VA’s own facility condition assessment. In fact, the existing San Diego SCI/D center, one of the highest volume 

centers in the entire VA health care system, has been deemed unsafe. Design and 

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construction projects have been identified to correct these essential infrastructure 

issues yet they remain unfunded. 

In addition, the number of beds dedicated to SCI/D long term care on a national 

level is woefully inadequate. While this BRAC process will almost assuredly focus 

on areas that can be targeted for closure-a fact of the DOD BRAC process-serious 

consideration must be given as a part of the process to long term care capacity. 

While there are some in VA leadership who would like to get VA out of the business 

of long term care, this is not an acceptable proposition for PVA and our members. 

The aging SCI/D Veteran population will live longer than past generations and is 

overwhelming the VA system forcing veterans to live in institutional nursing facilities that are not designed to safely accommodate the special needs of SCI/D veterans. As an example, the VA has invested in the design of the new Dallas SCI/ 

D long term care center which now needs construction funding to begin addressing 

this pressing need. We wonder what will become of projects such as this while this 

BRAC process is executed across the VA. Moreover, we do not want to see this process be used as a means to reduce VA’s long term care responsibilities. 

In the end, quality, accessible health care continues to be the focus for PVA and 

our partners in The Independent Budget. In order to achieve and sustain that goal, 

large capital investments must be made where appropriate. We hope that this will 

be one of the key outcomes of this asset review process. 

Mr. Chairman, I would like to thank you again for the opportunity to testify. We 

look forward to working with this Committee, the VA and our partner stakeholders 

to ensure that the most thorough and effective process is carried out in order to best 

position the VA health care system for the future needs of veterans. 

f 

Prepared Statement of Carlos Fuentes 

Chairman Roe, Ranking Member Walz and members of the House Committee on 

Veterans’ Affairs, on behalf of the women and men of the Veterans of Foreign Wars 

of the United States (VFW) and its Auxiliary, I thank you for the opportunity to 

testify on legislation pending before this Committee. 

H.R. 2773, to authorize the Secretary of Veterans Affairs to sell Pershing 

Hall 

Pershing Hall has been owned by the Department of Veterans Affairs (VA) since 

1991 and is leased as a hotel in Paris, France, until 2097. The VFW agrees that 

VA should not be in the hotel business, but disposal of the hotel should be more 

than simply an effort to no longer own the building. The VFW is glad to see that 

this legislation contains requirements to preserve the history of Pershing Hall and 

the memory of the brave American service members who fought in World War I. 

The VFW would, however, recommend this Committee consider amending this 

draft legislation to include language that would call for a prospectus that will outline the costs, if any, of breaching the lease agreement and the loss of annual revenue that the current lease provides. With this financial data, VA and this Committee can more clearly see the financial positives and negatives of selling the property. 

The VFW also believes that other options must be explored before selling Pershing 

Hall to a private entity. Since it has been turned into a hotel, the VFW urges this 

Committee to explore the possibility of transferring the building to the United 

States Army’s Morale, Welfare and Recreation Programs Armed Forces Recreation 

Centers. The Army’s Armed Forces Recreation Centers operate lodging facilities 

throughout the world, including Korea and Germany. 

Draft Legislation, Asset and Infrastructure Review Act of 2017 

This legislation would establish a commission to review and amend as needed a 

VA-generated plan to close, modernize, or realign Veterans Health Administration 

(VHA) facilities throughout the country. This legislation is based on the Department 

of Defense’s (DOD) Base Realignment and Closure (BRAC) and the Commission on 

Care’s recommendation to ‘‘develop and implement a robust strategy for meeting 

and managing VHA’s facility and capital-asset needs.’’ The VFW agrees with the intent of this legislation and has recommendations to improve it. 

For more than 100 years, the government’s solution to provide health care for our 

military veterans has been to build, manage and maintain a network of hospitals 

across the nation. This model allows VA to deliver care at 1,753 facilities, but has 

left it with more than 5,600 buildings and 34,000 acres, many of which are past 

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their building lifecycle. Many of these facilities need to be replaced, some need to 

be disposed of, others need to be expanded, and all of them need to be maintained. 

The process to manage this network of facilities is the Strategic Capital Infrastructure Plan (SCIP). SCIP identifies VA’s current and projected gaps in access, 

utilization, condition and safety. It then lists them in order based on the gap’s priority. In VA’s FY 2018 Budget Submission, the 10-year full implementation plan to 

close these gaps is estimated to cost $55-$67 billion. The VFW does not foresee a 

future where VA receives such sums to address all of its capital infrastructure access and safety gaps through its current SCIP process. We agree that VA has an 

insurmountable capital infrastructure problem, and a dramatic realignment of its 

assets may help in addressing safety and access gaps to ensure veterans have timely 

access to the high quality, veteran-centric, and comprehensive health care they have 

earned and deserve. 

The VFW has historically opposed a BRAC-style process for VA medical facilities 

because the population VA serves is very different from those stationed at and 

served by military installations. When I was in uniform, the Marine Corps could 

send me where they wanted, when they wanted, and I had little to no say about 

it. That is because the nature of our military’s obligations and needs change and 

DOD must realign its assets, including personnel, to defend our nation in an everchanging security landscape. VA, however, must adapt to the changes in the veterans population and cannot simply require veterans to move from one location to 

another. Rather, it must continuously adjust capital assets to the changing veteran 

population. This requires VA to modify, close, or build facilities to adjust to shifts 

in demand on its health care system. 

The SCIP process already addresses the issue of unused or underutilized property, 

but the process for approving, funding and implementing the plan is what has led 

to a $67 billion construction backlog. That is why the VFW urges this Committee 

to require VA to identify barriers in the SCIP process which have led to the backlog 

and steps needed to ensure a backlog of access and safety infrastructure gaps does 

not occur after a BRAC-style process is completed. If such barriers and issues are 

not addressed, the proposed recommendations may not be implemented. For example, a slow and cumbersome construction process impacts VA’s ability to complete 

major construction projects on time and on budget. Another example the VFW has 

urged this Committee to correct is the congressional authorization process for major 

medical facility leases. It takes too long for Congress to approve VA leases and veterans are directly impacted by VA’s delay in executing such leases. If these issues 

are not corrected, we will find ourselves in the same or worse situation in the future. 

The Commission on Care recommended a workaround to the lease issues that the 

VFW urges this Committee to consider. It recommended that Congress waive budgetary rules requiring offsets for a period of time and expanding the enhanced-use 

lease authority to allow VA to enter into needed leases, without accounting for the 

cost of the entire lease in the first year. However, suspending this offset requirement for a few years will leave VA in the same position it finds itself today if Congress does not find a long-term solution to VA’s leasing authority. VA also needs 

broader authority to enter into enhanced-use leases agreements. Public Law 112– 

154 reduced VA’s authority to allow for only adaptive housing. Returning it to its 

prior authority will allow VA to lease more of its unused or underutilized property, 

while still contributing to VA’s mission. The VFW is pleased this legislation authorizes VA to use its enhanced-use leases to implement recommendations, but it does 

not amend VA’s overall authority. 

The lack of input and buy-in from affected veterans has been the principal reason 

previous plans to close or realign VA facilities have failed. The VFW is pleased to 

see this legislation would require the proposed commission to conduct public hearings and seek input from veterans who would be impacted by any commission-made 

changes to VA’s plan. However, this legislation does not require VA to conduct open 

hearings at medical facilities it plans to realign or close. VA’s plan must include 

local veteran input as well. Including impacted veterans in the process from the beginning ensures more buy-in, if VA takes their concerns and recommendations into 

account. 

This includes the input from veterans who are eligible or enrolled in VA, but do 

not use VA health care. In the VFW’s latest health care survey, we asked veterans 

who do not use VA to tell us why. Veterans reported having employer-sponsored insurance, not wanting to take appointment slots from veterans who need them more, 

or problems with access which force them to choose other forms of health care coverage. VA has testified a number of times that it experiences an increase in demand 

when access to care is improved. If the asset review is successful, VA will improve 

access to care for veterans in every community. That is why VA must account for 

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the increase in reliance from veterans who have other forms of health coverage, but 

would begin to use VA because of the increase in access or life changes such as retirement or employment changes that leave veterans without other forms of health 

care coverage. 

Furthermore, past realignment strategies or plans to close VA medical facilities 

have not failed because of lack of authority. Veterans in such communities object 

to closures because the proposed plans create gaps in access to care or do not meet 

their needs. In order to avoid repeating such mistakes, the VFW urges this Committee to require VA to implement the proposed solutions before eliminating facilities or space. Doing so would ensure veterans do not experience a gap in access or 

continuation of care. Simply purchasing more care from community care providers 

is not an acceptable option. For example, VA and Congress cannot expect veterans 

to wait 10 years for a new facility to be built and think VA is able to close the old 

facility immediately. 

Veterans tell the VFW that they want VA to hire more doctors and build more 

capacity instead of simply turning to community care to fill the gaps. Through the 

Veterans Choice Program, we now know that the community is a great force multiplier for VA, but it is not a panacea of access or quality. The VFW is concerned that 

this legislation requires VA to identify opportunities to fill access gaps by purchasing care through community care providers, but does not require VA to include 

recommendations to hire more providers, build new facilities, or lease space to correct deficiencies or fill access gaps. Revenue generated from leasing or selling facilities must be reinvested back into expanding access to VA care for veterans. 

While the VFW believes that realignment of VA medical facilities must be a naturally occurring process based on the needs of each local community, we understand 

that past grassroots efforts have failed and that a one-time BRAC-style approach 

may lead to a better outcome if done correctly. That is why VFW thanks this Committee for including congressionally chartered and membership-based veterans service organizations in the proposed Asset and Infrastructure Review Commission. It 

is vital that a commission be representative of the veterans’ community and those 

who use the VA health care system the commission is charged with improving. The 

VFW’s health care surveys indicate veterans who use VA health care want VA to 

hire more doctors and improve access, while those who do not use it are more likely 

to want to dismantle the system or turn to the private sector rather than fixing 

issues. It is important that any commission charged with recommending vast 

changes to a system millions of veterans rely on for their health care has the best 

interest of veterans in mind—not political or financial motivations. 

The VFW is also pleased to see this legislation requires at least one commissioner 

to have experience with capital asset management for the federal government. Yet, 

it does not specify whether the commissioner must have experience with VA’s capital infrastructure. It is vital that at least one commissioner, and preferably more 

than one, have experience with the challenges VA faces in addressing its capital infrastructure needs. The VFW has seen previous congressionally established commissions lack the subject matter expertise to properly identify issues that have a direct 

impact on commission recommendations. If issues with VA’s SCIP process are not 

identified and addressed, recommendations regarding the closure, modernization 

and realignment of VHA facilities will not be carried out appropriately. 

Another lesson learned from previous commissions is that making far-reaching 

changes envisioned by this legislation takes time. The VFW agrees with comments 

by the Government Accountability Office, Congressional Research Service and VA 

at the recent roundtable on this legislation that the current deadlines set in this 

legislation do not provide sufficient time for VA to develop a well-thought-out plan, 

the commission to evaluate such plan, nor for VA to implement the final recommendations. The VFW urges this Committee to expand the timelines in the legislation to ensure the process is deliberate and implemented correctly. 

f 

Prepared Statement of David J. Wise, Physical Infrastructure Issues 

Brian J. Lepore, Director, Defense Capabilities and Management 

VA REAL ROPERTY 

REALIGNMENT MAY BENEFIT FROM ADOPTING ELEMENTS OF DEFENSE BASE REALIGNMENT AND CLOSURE PROCESS, PROVIDED PROCESS CHALLENGES ARE ADDRESSED

Chairman Roe, Ranking Member Walz, and Members of the Committee: 

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1GAO, High-Risk Series: An Update, GAO 15 290 (Washington, D.C.: February 2015). GAO 

maintains a high-risk program to focus attention on government operations that it identifies as 

high risk due to their greater vulnerabilities to fraud, waste, abuse, and mismanagement or the 

need for transformation to address economy, efficiency, or effectiveness challenges. See, for example, GAO, VA Health Care: Actions Needed to Improve Newly Enrolled Veterans’ Access to 

Primary Care, GAO 16 328 (Washington, D.C.: Mar. 18, 2016) and GAO, VA Mental Health: 

Clearer Guidance on Access Policies and Wait-Time Data Needed, GAO 16 24 (Washington, 

D.C.: Oct. 28, 2015). See also, for example, Department of Veterans Affairs, Office of Inspector 

General, Veterans Health Administration, Review of Alleged Patient Deaths, Patient Wait 

Times, and Scheduling Practices at the Phoenix VA Health Care System, Report No. 14–02603– 

267 (Washington, D.C.: Aug. 26, 2014) and VA, Department of Veterans Affairs Access Audit, 

System-Wide Review of Access, Results of Access Audit Conducted May 12, 2014, through June 

3, 2014. 2See GAO, High-Risk Series: Federal Real Property, GAO 03 122 (Washington, D.C.: January 

2003). 3See GAO, VA Real Property: VA Should Improve Its Efforts to Align Facilities with Veterans’ 

Needs, GAO 17 349 (Washington, D.C.: Apr. 5, 2017), Federal Real Property: Proposed Civilian 

Board Could Address Disposal of Unneeded Facilities, GAO 11 704T (Washington, D.C.: June. 

9, 2011), and Military Base Realignments and Closures: Key Factors Contributing to BRAC 

2005 Results, GAO 12 513T (Washington, D.C.: Mar. 8, 2012). 

We are pleased to be here today to discuss our work related to the Department 

of Veterans Affairs’ (VA) efforts to align its medical facilities and services, as well 

as our work on the Department of Defense’s (DOD) military Base Realignment and 

Closure (BRAC) process. These efforts are both relevant to challenges the federal 

government faces in real property management. 

VA operates one of the largest health care systems in the United States, providing 

care to more than 8.9 million veterans each year. VA is also one of the largest federal property-holding agencies. In September 2014, VA’s reported inventory included 

6,091 federally owned buildings and 1,586 leased buildings. However, in recent decades, the veteran population and preferences have shifted. VA has recognized this 

shift and the need to modernize its aging infrastructure and align its real property 

assets to provide accessible, high-quality, and cost-effective services to veterans. 

Aligning VA facilities to improve veteran access to services integrates two of GAO’s 

high risk areas: veterans’ health care and federal real property. In 2015, GAO 

placed veterans’ health care on its High Risk List due to persistent weaknesses and 

systemic problems with timeliness, cost-effectiveness, quality, and safety of the care 

provided to veterans. 1 In 2003, GAO placed federal real property management-including management of VA real property-on its High Risk List due to long-standing 

challenges, such as effectively disposing of excess and underutilized federal property. 2

DOD has repeatedly applied the BRAC process to reduce the amount of unneeded 

property that it owns and leases. DOD has undergone five BRAC rounds since 1988 

as a means of reducing excess infrastructure and realigning bases to meet changing 

force structure needs. The most recent BRAC round in 2005 also provided opportunities for furthering transformation and fostering jointness. As a result of these 

rounds, DOD reported that it had reduced its domestic infrastructure and transferred hundreds of thousands of acres of unneeded property to other federal and 

nonfederal entities. DOD data show that the department generated an estimated 

$28.9 billion in net savings or cost avoidances from the prior four BRAC rounds 

through fiscal year 2003 and expects to save about $7 billion each year thereafter. 

Regarding the 2005 BRAC round, we estimated that DOD saved about $15.2 billion 

from fiscal years 2006 through 2011 with an annual recurring savings of $3.8 billion 

beginning in fiscal year 2012. These savings reflect money that could be applied to 

other higher priority defense needs as well as savings from what DOD estimated 

it would likely have spent to operate military installations had they remained open. 

Our testimony today is based on our April 2017 report examining VA’s efforts to 

align its facilities with veterans’ needs, and on numerous GAO reports related to 

the BRAC process as summarized in June 2011 and March 2012 testimonies. 3 Today’s testimony addresses (1) the factors that affect VA’s facility alignment and the 

extent to which VA’s capital-planning process facilitates the alignment of facilities 

with the veterans’ population, and (2) the key elements and challenges affecting 

DOD and the Commission in BRAC 2005. For our April 2017 report, we reviewed 

VA’s facility-planning documents and data and interviewed VA officials in headquarters and at seven medical facilities selected for their geographic location, veteran population, and past alignment efforts. Additional information on our scope 

and methodology is available in our April report. Detailed information on our scope 

and methodologies for our BRAC work can be found in the published products, 

which are cited throughout this testimony. The work on which this testimony is 

based was conducted in accordance with generally accepted government auditing 

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standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. 

VA’s Efforts to Align its Facilities Are Affected by Several Factors and Are 

Impeded by Limitations in Its Capital-planning Processes 

Facility Alignment Is Challenged by Shifting Veterans’ Populations, Evolving Care Standards, Aging Infrastructure, and Limited Stakeholder Involvement 

Geographic shifts in the veterans’ population, changes in health care delivery, an 

aging infrastructure, and limited stakeholder involvement affect VA’s efforts to align 

its services and real property portfolio to meet the needs of veterans. For example, 

there has been a shift over time from inpatient to outpatient care. This shift will 

likely result in underutilized space once used for inpatient care. In such instances, 

it is often difficult and costly for VA to modernize, renovate, and retrofit these older 

facilities. In June 2017, VA reported that its facility inventory includes 430 vacant 

or mostly vacant buildings that are, on average, more than 60 years old, and an 

additional 784 buildings that are underutilized. 

The historic status of some VA facilities adds to the complexity of converting or 

disposing of them. In 2014, VA reported holding 2,957 historic buildings, structures, 

or land parcels-the third most in the federal government after DOD and the Department of the Interior. In some instances, it may be more expensive to renovate than 

to demolish and rebuild outdated facilities. In other cases, however, there may not 

be an option to demolish if these buildings are designated as historic. For example, 

planning officials at four medical facilities in our review told us that state historic 

preservation efforts prevented the VA from demolishing vacant buildings, even 

though these buildings require upkeep costs and pose potential safety hazards. (See 

fig. 1.) 

Note: Kerrville VA Medical Center, Kerrville, Texas: These pictures show a dwelling formerly used for medical staff housing that has been designated as a historic 

building. The outside of the building shows broken windows, missing bricks, and 

gutters that have nearly detached from the building. On the inside, portions of the 

ceiling have collapsed, spraying debris onto the floors and walls. 

VA has also encountered challenges to its facility alignment efforts, in part, because it has not consistently followed best practices for effectively engaging stakeholders. VA may align its facilities to meet veterans’ needs by expanding or consolidating facilities or services. Stakeholders-including veterans; local, state, and federal 

officials; Veterans Service Organizations; historic preservation groups; VA staff; and 

Congress-often view changes as working against their interests or those of their constituents, especially when services are eliminated or shifted from one location to another. We found that VA has not consistently engaged with stakeholders, and, in 

some cases, this inconsistency resulted in adversarial relationships that reduced 

VA’s ability to better align facilities with the needs of the veteran population. 

In our April 2017 report, we recommended that VA improve stakeholder communication guidance and evaluate its efforts. VA agreed with our recommendations and 

outlined a plan to implement them. 

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4 Established in 2010, the goal of SCIP is to identify the full capital needed to address VA’s 

service and infrastructure gaps and to demonstrate that all project requests are centrally reviewed in an equitable and consistent way throughout VA, including across market areas within 

VA’s health care system. Annually, planners at the medical facilities develop 10-year action 

plans for their respective facilities, which include projects to address gaps in service identified 

by the SCIP process. Medical facility officials then develop more detailed business plans for the 

capital improvement projects that are expected to take place in the first year of the 10-year action plan. These projects are validated, scored, and ranked centrally based on the extent to 

which they address the annual VA-approved SCIP criteria using the assigned weights. 

Separately, implemented in fiscal year 2011 as a pilot project, the VAIP process’s goal was 

to identify the best distribution of health care services for veterans; where the services should 

be located based on the veterans’ locations and referral patterns; and where VA should adapt 

services, facilities, and health care delivery options to better meet these needs as determined 

by locations and referral patterns. 5The scoring of submitted projects includes both narrative responses that are evaluated 

(about one-third of the overall score) and data-driven scoring based on gap closure (the remaining two-thirds of the overall score). 

Limitations in VA’s Capital-planning Processes Impede Its Alignment of Facilities 

Two of the planning processes VA uses to align its facilities-VA’s Strategic Capital 

Investment Planning (SCIP) and the VA Integrated Planning (VAIP)-have limitations. 4

SCIP Process 

VA relies on the SCIP process to plan and prioritize capital projects system-wide, 

but SCIP’s limitations-including subjective narratives, long timeframes, and restricted access to information-undermine VA’s ability to achieve its goals. For example, the time between when planning officials at VA medical facilities begin developing the SCIP narratives and when they are notified that a project is funded has 

taken between 17 and 23 months over the past 6 fiscal-year’s SCIP submissions. 5

(See fig. 2.) As such, VA routinely asks its facility planners to submit their next 

year’s planned project narratives before knowing if their project submissions from 

the previous year have been funded. 

(a) Although planning officials at VA medical facilities obtain initial information 

from SCIP about what gaps they need to address, they do not officially start developing the narratives until they receive a request from VA to submit a project for SCIP 

scoring and approval. Officials from the office that oversees SCIP told us that facilities usually have access to the tools for submission about a week prior to the request 

date. 

(b) Medical facilities officially find out which major (over $10 million) and minor 

construction (under $10 million) SCIP projects are approved and will be funded 

when Congress passes the department’s budget for that fiscal year. Non-recurring 

maintenance SCIP projects-repairs and renovations within the existing square footage of a facility that total more than $25,000-are available for funding on the first 

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6See GAO, Standards for Internal Control in the Federal Government, GAO 14 704G (Washington, D.C.: September 2014). 7See GAO 17 349. 

8 VA organizes its system of care into regional networks (VISNs), which are responsible for 

coordination and oversight of all administrative and clinical activities within the VISN’s specified geographic region. As of January 2017, VA officials told us they had mostly completed the 

VAIP process in 6 of the 18 VISNs and had plans to start or complete the remaining VISNs 

by October 2018. 9 VA uses the services of non-VA providers in non-VA facilities under the following statutory 

authorities: 38 U.S.C. §§ 1703, 1725, 1728, 8111, and 8153. The Non-VA Medical Care Program 

includes the Choice Program and Patient-Centered Community Care, among other programs. 

The Choice Program was authorized under the Veterans Access, Choice, and Accountability Act 

of 2014 (Choice Act), which appropriated $10 billion for the furnishing of non-VA care when veterans’ access to VA health care does not meet applicable timeliness or travel requirements. Pub. 

L. No.113–146, 128 Stat. 1754 (2014). VA may authorize Choice Program care until such funds 

are exhausted. Pub. L. No. 115–26, § 1, 131 Stat. 129 (2017). Patient-Centered Community Care 

is a nationwide program where VA may authorize non-VA care when a VA facility is unable 

to provide certain specialty care services, such as cardiology or orthopedics, or under other conditions. To implement the program, VA utilizes two contractors, Health Net and TriWest, to establish networks of providers in a number of specialties-including primary care, inpatient specialty care, and mental health care. 10See Office of Management and Budget, Circular No. A–11: Preparation, Submission, and 

Execution of the Budget, July 2016. 11See GAO 17 349. 

day of the fiscal year for that project’s submission because such projects have advance 

appropriations. 

An official from the office that oversees SCIP told us that the timing of the budgeting process, which is outside VA’s control, contributes to these delays. While these 

aspects are outside of VA’s control, VA has chosen to wait about 6 to 10 months 

to report the results of the SCIP scoring process to the medical facilities. This situation makes it difficult for local officials to understand the likelihood that their 

projects will receive funding. A VA official said that for future SCIP cycles, VA plans 

to release the scoring results for minor construction and non-recurring maintenance 

projects to local officials earlier in the process. At the time of our review, however, 

the official did not have a time frame for when VA would do this. Although VA acknowledges many of these limitations, it has taken little action in response. Federal 

standards for internal control state that agencies should evaluate and determine appropriate corrective action for identified limitations on a timely basis. 6 If VA does 

not address known limitations with the SCIP process, it will not have reasonable 

assurance that SCIP can be used to accurately identify the capital necessary to address VA’s service and infrastructure gaps. 

In our April 2017 report, we recommended that VA address identified limitations 

to the SCIP process, including limitations to scoring and approval, and access to information. 7 VA concurred with the recommendation to the extent the limitations 

were within its control. While VA has taken some actions, the recommendation remains open. 

VAIP Process 

The VAIP process produces a market-level health services delivery plan for each 

Veterans Integrated Service Network (VISN) and a facility master plan for each 

medical facility. VA has estimated the entire process to create plans for VISNs and 

facilities to cost $108 million when fully complete. 8 However, the VAIP process’s facility master plans assume all future growth in services will be provided directly 

through VA facilities. This assumption is not accurate given that (1) VA obligated 

about $10.1 billion to purchase care from non-VA providers in fiscal year 2015 and 

(2) VA can provide care directly through its medical facilities or purchase health 

care services from non-VA providers through both the Non-VA Medical Care Program (referred to as ‘‘care in the community’’ by VA) and clinical contracts. 9 The 

Office of Management and Budget’s acquisition guidance notes that investments in 

major capital assets should be made only if no alternative private sector source can 

support the function at a lower cost. 10

In our April 2017 report, we recommended that VA assess the value of the VAIP’s 

facility master plans as a facility-planning tool, and based on conclusions from the 

review, to either (1) discontinue the development of VAIP’s facility master plans or 

(2) address the limitations of VAIP’s facility master plans. 11 VA concurred with the 

recommendation, and in August 2017, VA noted that it has discontinued its VAIP 

facility master plans while VA pursues a national realignment strategy, after which 

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12 After DOD selected its recommendations, it submitted them to the BRAC Commission, 

which performed an independent review and analysis of DOD’s recommendations. The Commission could approve, modify, reject, or add closure and realignment recommendations. 13Section 2832 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 

2005, Pub. L. No. 108–375 (2004). 14Section 3001 of the National Defense Authorization Act for Fiscal Year 2002, Pub. L. 

No.107–107 (2001), amended the Defense Base Closure and Realignment Act of 1990, Pub. L. 

No. 101–510 (1990), to, among other things, require DOD to develop a 20-year force structure 

plan as the basis for its 2005 BRAC analysis to include the probable end strength levels and 

major military force units needed to meet the probable threats identified by the Secretary of 

Defense. 

it plans to adjust its future facility master plans to incorporate pertinent information, including care in the community realignment opportunities. 

Key Elements and Challenges Affecting DOD and the Commission in BRAC 

2005 

Key Elements That DOD Used to Develop Its 2005 BRAC Recommendations 

That Could Benefit VA Asset and Infrastructure Review 

As Congress evaluates proposed legislation for disposing of or realigning VA property, it may wish to consider seven elements DOD relied on as it developed its recommendations for the BRAC Commission. 12

• Establish goals for the process. The Secretary of Defense emphasized the 

importance of transforming the military to make it more efficient as part of the 

2005 BRAC round. Other goals for the 2005 BRAC process included fostering 

jointness among the four military services, reducing excess infrastructure, and 

producing savings. Prior rounds focused more on reducing excess infrastructure 

and producing savings. • Develop criteria for evaluating closures and realignments. DOD proposed 

selection criteria, which were made available for public comment via the Federal Register. Ultimately, Congress enacted the final BRAC selection criteria in 

law with minor modification and specified that four selection criteria, known as 

the ‘‘military value criteria,’’ were to be given priority in developing closure and 

realignment recommendations. 13 Further, Congress required that the Secretary 

of Defense develop and submit to Congress a force structure plan that described 

the estimated size of major military units needed to address probable threats 

to national security for the 20-year period beginning in 2005, along with a comprehensive inventory of global military installations. 14 In authorizing the 2005 

BRAC round, Congress specified that the Secretary of Defense publish a list of 

recommendations for the closure and realignment of military installations inside the United States based on the statutorily-required 20-year force structure 

plan and infrastructure inventory, and on the final selection criteria. 

• Estimate costs and savings to implement closure and realignment recommendations. To address the cost and savings criteria, DOD developed and 

used the Cost of Base Realignment Actions (COBRA) model, a quantitative tool 

that DOD has used since the 1988 BRAC round to provide consistency in potential cost, savings, and return-on-investment estimates for closure and realignment options. We found the COBRA model to be a generally reasonable estimator for comparing potential costs and savings among alternatives. (See fig. 

3.) 

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15GAO, Military Bases: Lessons Learned From Prior Base Closure Rounds, GAO/NSIAD 97 

151 (Washington, D.C.: July 25, 1997). 

As with any model, the quality of the output from COBRA was a direct function 

of the data DOD included in the model. Also, DOD’s COBRA model relied to a large 

extent on standard factors and averages and did not represent budget quality estimates that were developed once BRAC decisions were made and detailed implementation plans were developed. Nonetheless, the financial information provided important input into the selection process as decision makers weighed the financial implications-along with military value criteria and other considerations-in arriving at 

final decisions about the suitability of various closure and realignment options. 

• Establish an organizational structure. The Office of the Secretary of Defense emphasized the need for joint cross-service groups to analyze common 

business-oriented functions. For the 2005 BRAC round, as for the 1993 and 

1995 rounds, these joint cross-service groups performed analyses and developed 

closure and realignment options in addition to those developed by the military 

departments. Our evaluation of DOD’s 1995 BRAC round found that few crossservice recommendations were made, in part because of the lack of high-level 

leadership to encourage consolidations across the departments’ functions. In the 

1995 BRAC round, the joint cross-service groups submitted options through the 

military services for approval, but few were approved. 15 The number of approved recommendations that the joint cross-service groups developed significantly increased in the 2005 BRAC round. This increase was, in part, because 

high-level leadership ensured that the options were approved not by the military departments but rather by a DOD senior-level group, known as the Infrastructure Steering Group. As shown in figure 4, the Infrastructure Steering 

Group was placed organizationally on par with the military departments. 

• Establish a common analytical framework. To ensure that the selection criteria were consistently applied, the Office of the Secretary of Defense, the military departments, and the seven joint cross-service groups first performed a capacity analysis of facilities and functions. Before developing the candidate recommendations, DOD’s capacity analysis relied on data calls to hundreds of locations to obtain certified data to assess such factors as maximum potential capacity, current capacity, current usage, and excess capacity. Then, the military 

departments and joint cross-service groups performed a military value analysis 

for the facilities and functions based on primary military value criteria, which 

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16GAO, Military Base Realignments and Closures: DOD Needs to Update Savings Estimates 

and Continue to Address Challenges in Consolidating Supply-Related Functions at Depot Maintenance Locations, GAO 09 703 (Washington, D.C.: July 9, 2009). 

included a facility’s or function’s current and future mission capabilities, physical condition, ability to accommodate future needs, and cost of operations. • Develop BRAC oversight mechanisms to improve accountability for implementation. In the 2005 BRAC round, the Office of the Secretary of Defense 

for the first time required the military departments to develop business plans 

to better inform the Office of the Secretary of Defense of the status of implementation and financial details for each of the BRAC 2005 recommendations. 

These business plans included: (1) information such as a listing of all actions 

needed to implement each recommendation; (2) schedules for personnel relocations between installations; and (3) updated cost and savings estimates by DOD 

based on current information. This approach permitted senior-level intervention 

if warranted to ensure completion of the BRAC recommendations by the statutory completion date. • Involve the audit community to better ensure data accuracy. The DOD 

Inspector General and military department audit agencies played key roles in 

identifying data limitations, pointing out needed corrections, and improving the 

accuracy of the data used in the process. In their oversight roles, the audit organizations, which had access to relevant information and officials as the process 

evolved, helped to improve the accuracy of the data used in the BRAC process 

and thus strengthened the quality and integrity of the data used to develop closure and realignment recommendations. For example, the auditors worked to 

ensure certified information was used for BRAC analysis and reviewed other 

facets of the process, including the various internal control plans, the COBRA 

model, and other modeling and analytical tools that were used in the development of recommendations. 

Key Challenges Affecting DOD and the Commission in BRAC 2005 

We identified two key challenges that affected DOD’s implementation of BRAC 

2005 and would need to be addressed for VA to adopt a BRAC-like process for its 

asset and infrastructure review. 

• Some transformational-type BRAC recommendations required sustained senior leadership attention and a high level of coordination 

among many stakeholders to complete by the required date. Implementation of some transformational BRAC recommendations-especially those where 

a multitude of organizations had roles to play to ensure the achievement of the 

goals of the recommendation-illustrated the need to involve key stakeholders 

and effective planning. For example, the Defense Logistics Agency committed 

sustained high-level leadership and included relevant stakeholders to address 

implementation challenges faced with the potential for disruptions to depot operations during implementation of the BRAC consolidation recommendation. 16

To implement the BRAC recommendations, the agency had to develop strategic 

agreements with the services that ensured that all stakeholders agreed on its 

plans for implementation, and had to address certain human capital and information technology challenges. 

• Large number of actions and interdependent recommendations complicated the implementation process. The large number and variety of 

BRAC actions presented challenges during implementation. The BRAC 2005 

round had more individual actions (813) than the four prior rounds combined 

(387). The executive staff of the Commission told us that it was more difficult 

to assess the costs and the amount of time for the savings to offset the implementation costs since many of the recommendations contained multiple interdependent actions, all of which needed to be reviewed. Specifically, many of the 

BRAC 2005 recommendations were interdependent and had to be completed in 

a sequential fashion within the statutory implementation period. In cases where 

interdependent recommendations required multiple relocations of large numbers 

of personnel, delays in completing one BRAC recommendation had a cascading 

effect on the implementation of other recommendations. Specifically, DOD had 

to synchronize the relocations of over 123,000 people with about $24.7 billion 

in new construction or renovation. Commission officials told us that in prior 

BRAC rounds each base was handled by a single integrated recommendation. 

However, in BRAC 2005, many installations were simultaneously affected by 

multiple interconnected BRAC recommendations. Given the complexity of interdependent recommendations, the Office of the Secretary of Defense required the 

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military departments and defense agencies to provide periodic updates on implementation challenges and progress. 

Chairman Roe, Ranking Member Walz, and Members of the Committee, this concludes our prepared statement. We are happy to answer any questions related to 

our work on VA’s efforts to align its medical facilities and services or on DOD’s 

BRAC process. 

GAO Contact and Staff Acknowledgments 

If you or your staff members have any questions concerning this testimony, please 

contact David Wise at (202) 512–2834 or wised@gao.gov regarding federal real property, or Brian Lepore at (202) 512–4523 or leporeb@gao.gov regarding the BRAC 

process. Contact points for our Offices of Congressional Relations and Public Affairs 

may be found on the last page of this statement. Other individuals who made key 

contributions to this testimony include Keith Cunningham, Assistant Director; Gina 

Hoffman, Assistant Director; Tracy Barnes; Jeff Mayhew; Kevin Newak; Richard 

Powelson; Malika Rice; Jodie Sandel; Eric Schwab; Amelia M. Weathers; and Crystal Wesco. 

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f 

Prepared Statement of Regan L. Crump, MSN, DrPH 

Thank you, Chairman Roe, Ranking Member Walz, and Members of the Committee, for the opportunity to appear today to discuss the Department of Veterans 

Affairs’ (VA) plans for modernizing our health care system and infrastructure, and 

optimizing the care we provide for Veterans through high-performing integrated networks. The Committee recently added to today’s agenda H.R. 2773, to authorize the 

Secretary of Veterans Affairs to sell the property known as Pershing Hall. VA has 

not had sufficient time to include views on this bill in this statement, but will be 

glad to follow up with the Committee. 

The draft legislative text in the Asset, Infrastructure and Review Act of 2017 calls 

for VA to assess its health care markets nationwide and determine ways to optimize 

its care and services for Veterans, and then submit its recommendations regarding 

closure, modernization, or realignment of its facilities to an appointed Commission. 

The draft legislation provides that the Commission may change recommendations 

provided by the Secretary prior to submitting its written report of findings and conclusions to the President. If the President approves the Commission’s final recommendations, they are presented to Congress to be considered through a resolution 

and voting process. 

The Department appreciates the Committee for its recognition and commitment 

to delivering quality care to our Veterans. The draft bill includes many thoughtful 

features that could serve as useful benchmarks for the critical market analysis 

needed to guide focused, localized and objective data for decision-making. VA would 

like to follow up with the Committee to provide more in-depth comments and technical assistance. As for the Commission, VA defers to Congress for a process it 

would establish for its own consideration of recommendations. 

As the Secretary has emphasized, VA is moving forward with more efficient and 

agile management of VA’s medical care facilities to match where Veterans live. This 

is a critical element of VA’s modernization. In concert with the draft legislation, I 

would like to discuss how VA is moving forward to improve our services and infrastructure, and highlight some opportunities that will enhance VA’s ability to serve 

our Nation’s Veterans. 

VA Health Care System 

VA’s mission is distinct from other Federal agencies in that we operate the Nation’s largest integrated health care system, with more than 1,500 health service delivery sites, including hospitals, clinics, community-living centers, and residential 

treatment facilities. Additionally, VA administers a variety of benefits and other 

services, and operates 135 national cemeteries nationwide. 

One aspect of VA that distinguishes us from large private-sector health systems 

is that the average age of VA-owned buildings is approaching 60 years. 

Managing infrastructure of that age poses complex challenges and requires a significant amount of resources. It requires a great deal of internal and external coordination and collaboration to modernize a system of that nature, while adjusting to 

constantly changing Veteran demographics across the country. 

VA Capital Infrastructure 

One of Secretary Shulkin’s top five priorities is ‘‘Modernizing (VA) Systems’’ which 

includes focusing on infrastructure improvements and streamlining. In support of 

this priority, VA identified 430 individual vacant buildings totaling 5.9 million gross 

square feet that are geographically dispersed through VA campuses nationwide. On 

June 20, 2017, the Secretary announced VA’s plans to initiate disposal through demolition, sale or transfer; or reuse actions for these vacant buildings over the next 

24 months. These buildings are not being used to serve Veterans; and the $7 million 

in annual capital and operating expenses currently used to maintain these vacant 

buildings can be better utilized to support VA’s mission. Since June 2017, we have 

repurposed or disposed of 110 buildings, and VA is on track to meet the goal of initiating disposal or reuse actions for all 430 buildings by June 2019, which was our 

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original goal. VA will review the approximately 780 underutilized buildings in VA’s 

inventory to determine if additional efficiencies can be identified to be reinvested 

in Veterans’ services. 

Modernization and Foundational Services 

The Secretary has made a commitment to modernize our systems and infrastructure by focusing on primary care and VA’s other foundational services and the facilities where such services are delivered. By foundational, I refer to those services that 

have been tailored to meet the needs of the men and women who have served our 

country, many of whom have experienced the physical and mental wounds of war. 

Such services often cannot be provided in the community with the level of quality, 

understanding, and intensity that Veterans receive when these services are provided by VA. Along with these foundational services, VA plans to ensure that Veterans continue to have the ability to receive those services contained in the benefits 

package available under applicable law. 

Commission on Care 

VA agreed with the Commission on Care observation that VA should determine 

the optimal mix of health care services to meet Veteran needs at the market level, 

before realigning its infrastructure to leverage non-VA health care resources that 

are available in local communities to complement VA care. VA also agreed with the 

Commission’s assessment that VA would need broader authorities and tools to optimize VA’s capital assets. 

Way Forward - Market Area Optimization for High Performing Networks 

In response to the Commission on Care, and the Fiscal Year (FY) 2015 Appropriations Bill requiring a National Realignment Strategy, VA has developed a methodology to objectively assess its health care demand and service-delivery capacity in 

each of our health care system’s 96 markets. The methodology is a rigorous, analytic 

approach developed and validated through the recent pilots. We believe this datadriven eight-step methodology is sound and reflects a population-based approach to 

improving the health and wellbeing of our enrolled Veterans. 

The goal of future assessments will be to modernize VA’s health care system, 

using this data-driven approach for matching local capacity to local demand and to 

create a modern, high-performing integrated health care network in each market, 

to better serve Veterans now and in the future. The methodology assesses current 

and future Veteran demand for medical care, and all the capabilities of local VA providers, Department of Defense (DoD) treatment facilities, academic affiliates, Federally Qualified Health Centers, other Federal, State, and local partners, and telehealth resources. We recently awarded a contract to secure private-sector experts to 

support our market-assessment teams led by Veterans Integrated Service Networks. 

However, the contract award is now the subject of ongoing legal action which delays 

implementation of market assessments until at least December 1, 2017. 

The intended outcome of these assessments, once started, is a plan for a highperforming health care network in each market. These networks will be well-connected, comprehensive, coalitions led by experienced VA managers who will coordinate VA health care services, complimented where appropriate by DoD treatment 

facilities, academic affiliates, Federally Qualified Health Centers, and other suitable 

community providers. We will also continue to fulfill our research, health professional training, and emergency preparedness missions. 

Achieving high performing networks may require significant capital investments, 

clinical service-line adjustments, process improvements, some targeted divestments, 

robust care coordination, and smart use of strategic partnerships. The plans we pursue will undoubtedly require the continued support of Congress, Veteran Service Organizations (VSOs), and other stakeholders to ensure success. 

Expanded Strategic Partnerships 

In addition to VA’s current authorities to manage and reconfigure its vast real 

property portfolio, VA will continue to explore ways to leverage and establish additional capability and efficiencies with other Federal agencies, such as DoD and the 

General Services Administration, as well as capabilities and efficiencies with private-sector partners. Improved authorities to pursue joint facilities with DoD, as 

well as with private-sector, non-profit partners through construction and leasing actions, will provide greater opportunities for VA to deliver 21st Century care and 

services to Veterans in state-of-the-art facilities, nationwide. 

DoD is an extremely important partner for VA because, they already care for over 

2 million Veterans, including Veterans who are military retirees under the 

TRICARE program, in addition to all the brave men and women who will be tomorleonard.horne on VACREP0180 with DISTILLER

62 

row’s Veterans. We welcome legislative flexibilities to work with DoD and other 

partners in a manner consistent with the President’s interagency management and 

agency reform agenda, and encourage enhanced continuity of care, joint purchasing, 

and shared capital investments. 

Support from Congress 

In order to modernize the health care system, continued support from Congress 

is needed. As the Secretary stated at his recent FY 2018 budget hearings, VA’s 

budget submission includes proposed legislative requests that, if enacted, will increase the Department’s flexibility to meet Veteran’s needs. VA included proposals 

to: (1) increase the threshold for minor construction projects from $10 million to $20 

million; (2) modify Title 38 to eliminate impediments to joint facility projects with 

DoD and other Federal agencies; and (3) expand VA’s Enhanced Use Lease authority to afford VA improved capabilities to manage and leverage its real property portfolio. Enactment of these authorities will be critical to modernizing VA’s health care 

system in accordance with the demands of younger Veterans and changes needed 

in all health care systems across the country. We must remain perpetually agile, 

so we can continually adapt to the changing needs of the Veterans we are privileged 

to serve. 

Conclusion 

We welcome and need the support of Congress, VSOs, State and local departments of Veterans Affairs, other Federal agencies, and the media. Working together, 

and with the necessary flexibilities to modernize, we will be able to achieve the optimal mix of services and infrastructure needed to provide high-quality care, readily 

accessible services, and outstanding benefits for our Nation’s Veterans. The Department will keep the Committee informed as progress is made and as barriers are encountered. 

Mr. Chairman, Ranking Member, and Members of the Committee, this concludes 

my statement. Thank you for the opportunity to testify before the Committee today. 

Mr. Sullivan and I are here to learn all that we can, and we are happy to respond 

to any questions you may have. 

f 

STATEMENT FOR THE RECORD 

CONCERNED VETERANS FOR AMERICA (CVA) 

Draft Legislation - The Asset and Infrastructure Review Act of 2017 

A bill to establish an independent commission to review and re-align the Department 

of Veterans Affairs’s current infrastructure. 

The Department of Veterans Affairs (VA) devotes large amounts of resources to 

maintain aging and excess infrastructure across the country. This had led to funds 

that could have been spent directly in support of our veterans being wasted on the 

upkeep of buildings and land that should have been sold, downsized, or re-purposed 

for other uses long ago. Additionally, the VA’s current infrastructure footprint was 

designed to serve a veteran population that is much different from the current one 

and which will not serve the much smaller and more dispersed veteran population 

of the future. It is for these reasons that VA Secretaries under Presidents Bush, 

Obama, and Trump have all stated the need for a comprehensive asset review and 

re-alignment. Concerned Veterans for America has long advocated for this type of 

legislation and we feel it is essential to ensuring that the VA is best equipped to 

serve our veterans now and in the future. 

Concerned Veterans for America supports this legislation. 

HR 2773 - To authorize the Secretary of Veterans Affairs to sell Pershing 

Hall 

A bill to authorize the Secretary of Veterans Affairs to sell Pershing Hall for fair 

market value 

The VA should have the ability to sell Pershing Hall in Paris, France in order 

to direct resources to other more critical programs. 

Concerned Veterans for America supports this legislation. 

Æ 

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