United States Government Accountability Office

GAO Testimony

Before the Subcommittee on Federal Financial 

Management, Government Information, and 

International Security, Committee on Homeland 

Security and Governmental Affairs, U.S. Senate 

INFORMATION 

TECHNOLOGY 

For Release on Delivery 

Expected at 2:30 p.m. EDT

Thursday, June 22, 2006

VA and DOD Face 

Challenges in Completing 

Key Efforts 

Statement of Linda D. Koontz, Director 

Information Management Issues 

GAO-06-905T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 22, 2006

INFORMATION TECHNOLOGY 

VA and DOD Face Challenges in 

Highlights of GAO-06-905T, a testimony Completing Key Efforts 

before the Subcommittee on Federal 

Financial Management, Government 

Information, and International Security, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

The Department of Veterans Affairs 

(VA) is engaged in an ongoing

effort to share electronic medical

information with the Department of

Defense (DOD), which is important 

in helping to ensure high-quality

health care for active duty military 

personnel and veterans. Also 

important, in the face of current

military responses to national and 

foreign crises, is ensuring effective

and efficient delivery of veterans’

benefits, which is the focus of VA’s

development of the Veterans 

Service Network (VETSNET), a 

modernized system to support

benefits payment processes.

GAO is testifying on (1) VA’s efforts 

to exchange medical information 

with DOD, including both nearterm initiatives involving existing

systems and the longer term 

program to exchange data between 

the departments’ new health 

information systems, and (2) VA’s

ongoing project to develop

VETSNET. 

To develop this testimony, GAO

relied on its previous work and 

followed up on agency actions to 

respond to GAO recommendations. 

What GAO Recommends

GAO has previously made

numerous recommendations on 

these topics, including that VA and 

DOD develop an integrated project 

plan to guide their efforts to share 

patient health data, and that VA 

develop an integrated project plan

for VETSNET.

VA and DOD are implementing near-term demonstration projects that 

exchange limited electronic medical information between their existing 

systems, and they are making progress in their longer term effort to share 

information between the new health information systems that each is

developing. Two demonstration projects have been implemented at selected

sites: (1) a project to achieve the two-way exchange of health information on 

patients who receive care from both departments and (2) an application to 

electronically transfer laboratory work orders and results. According to VA 

and DOD, these projects have enabled lower costs and improved service to 

patients by saving time and avoiding errors. In their longer term effort, VA 

and DOD have made progress, in response to earlier GAO recommendations, 

by designating a lead entity with final decision-making authority and 

establishing a project management structure. However, VA and DOD have 

not yet developed a clearly defined project management plan that gives a

detailed description of the technical and managerial processes necessary to 

satisfy project requirements, as GAO previously recommended. Moreover, 

the departments have experienced delays in their efforts to begin 

exchanging patient health data; they have not yet fully populated the 

repositories that will store the data for their future health systems. As a 

result, much work remains to be done before the departments achieve their 

ultimate goal of sharing virtual medical records. 

VA has also been working to modernize the delivery of benefits through its 

development of VETSNET, but the pace of progress has been discouraging. 

Originally initiated in 1986, this program was prompted by the need to 

modernize VA’s Benefits Delivery Network—parts of which are now 40-yearold technology—on which the department relies to make benefits payments, 

including compensation and pension, education, and vocational 

rehabilitation and employment. In 1996, after experiencing numerous false 

starts and spending approximately $300 million, VBA revised its strategy and 

narrowed its focus to modernizing the compensation and pension system. In 

earlier reviews, GAO has made numerous recommendations to improve the 

program’s management, including the development of an integrated project 

plan. In response to GAO’s recommendations as well as those of an 

independent evaluator, VA is now developing an integrated master plan for 

the compensation and pension system, which it intends to complete in 

August. Until VA addresses the managerial and program weaknesses that 

have hampered the program, it is uncertain when VA will be able to end its 

reliance on its aging benefits technology. 

www.gao.gov/cgi-bin/getrpt?GAO-06-905T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Linda Koontz at

(202) 512-6240 or koontzl@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to participate in today’s hearing on health information 

technology. As you know, the Departments of Veterans Affairs (VA)

and Defense (DOD) are engaged in efforts to share electronic 

medical information, which is important in helping to ensure that 

active duty military personnel and veterans receive high-quality 

health care. Also important, in the face of current military responses 

to national and foreign crises, is ensuring effective and efficient 

delivery of veterans’ benefits, which is the focus of VA’s 

development of the Veterans Service Network (VETSNET), a 

modernized system to support benefits payment processes. 

For the past 8 years, VA and DOD have been working to develop the 

ability to exchange patient health information electronically. As part 

of their efforts, each department is developing its own modern 

health information system—VA’s HealtheVet VistA and DOD’s 

Armed Forces Health Longitudinal Technology Application 

(AHLTA),1

 and they are collaborating on a program to develop an 

interface to enable these future systems to share data and ultimately 

to have interoperable2

 electronic medical records with computable 

data. That is, the data would be in a format that a computer 

application can act on: for example, to provide alerts to clinicians 

(of such things as drug allergies) or to plot graphs of changes in vital 

signs such as blood pressure. According to the departments, the 

availability of computable medical data contributes significantly to 

patient safety and the usefulness of electronic medical records. 

In addition, responding to a congressional mandate,3

 VA and DOD 

initiated information technology demonstration projects in 2004 that 

 1

 In November 2005, DOD gave this name to its future health information system, 

previously known as Composite Health Care System (CHCS) II. 

2

 Interoperability is the ability of two or more systems or components to exchange 

information and to use the information that has been exchanged. 

3

 The Bob Stump National Defense Authorization Act for Fiscal Year 2003, Pub. L. No. 107-

314, §721 (a)(1), 116 Stat. 2589,2595 (2002). To further encourage on-going collaboration, 

section 721 directed the Secretary of Defense and the Secretary of Veterans Affairs to 

establish a joint program to identify and provide incentives to implement, fund, and 

evaluate creative health care coordination and sharing initiatives between DOD and VA. 

Page 1 GAO-06-905T
focus on near-term goals: the exchange of electronic medical 

information between the departments’ existing health information 

systems. These projects are to help in the evaluation of the 

feasibility, advantages, and disadvantages of measures to improve 

sharing and coordination of health care and health care resources. 

The two demonstration projects (Bidirectional Health Information 

Exchange and Laboratory Data Sharing Interface) are limited, 

interim initiatives that are separate from the departments’ ongoing 

long-term efforts in sharing data and developing health information 

systems. 

Another ongoing VA project is the development of VETSNET, which 

was prompted by the need to modernize VA’s Benefits Delivery 

Network, parts of which are now 40-year-old technology. This 

project, which was originally initiated in 1986, is essential to ensure 

the continued accurate processing of benefits payments.

At your request, my testimony today will summarize our previous 

work and describe agency actions to respond to our 

recommendations in two areas. 

● First, I will discuss VA’s continued efforts to exchange medical 

information with DOD, including (1) near-term initiatives to 

exchange data between the agencies’ existing systems and 

(2) progress in achieving the longer term goal of exchanging data 

between the departments’ new systems, to be built around 

electronic patient health records. 

● Second, I will discuss VA’s ongoing project to modernize its Benefits 

Delivery Network and develop VETSNET. 

To describe the current status of VA and DOD efforts to exchange 

medical information, we reviewed our previous work in this area, 

analyzed VA and DOD documentation to determine the 

implementation status of our open recommendations, and consulted 

with VA and DOD officials responsible for key decisions and actions 

on the health data-sharing initiatives. To describe VA’s efforts on the 

VETSNET initiative, we reviewed our previous work in this area, 

analyzed documentation to determine the implementation status of 

our open recommendations—most specifically, the Carnegie Mellon 

Software Engineering Institute’s Technical Assessment of the 

Page 2 GAO-06-905T
VETSNET project—and consulted with the Veterans Benefits 

Administration officials responsible for key decisions and actions on 

the project. The costs that has been incurred for the various projects 

were provided by cognizant VA and DOD officials. We did not audit 

the reported costs and thus cannot attest to their accuracy or 

completeness. All work on which this testimony is based was 

conducted in accordance with generally accepted government 

auditing standards. 

Results in Brief 

VA and DOD are implementing limited, near-term demonstration 

projects, and they are making progress toward their long-term effort

to share electronic patient health data. The two demonstration 

projects, which have been implemented at selected sites, have 

provided significant benefits, according to the two departments, 

because they enable lower costs and improved service to patients by

saving time and avoiding errors: 

● Bidirectional Health Information Exchange, implemented at 16 sites, 

allows the two-way exchange of health information on shared 

patients4

 in text format (including outpatient pharmacy data, drug 

and food allergy information, patient demographics, radiology 

results, and laboratory results5

). 

● The Laboratory Data Sharing Interface application, implemented at 

6 sites, is used to facilitate the electronic transfer/sharing of orders 

for laboratory work and the results of the work. 

In their longer term efforts to achieve a virtual medical record, VA 

and DOD have more to do to achieve the two-way electronic data 

exchange capability originally envisioned. They have made progress 

in, for example, preparing data for exchange, and they have 

 4

 Shared patients receive care from both VA and DOD clinicians. For example, veterans

may receive outpatient care from VA clinicians and be hospitalized at a military treatment

facility. 

5

 These data are text files providing surgical, pathology, cytology, microbiology, chemistry, 

and hematology test results and descriptions of radiology results.

Page 3 GAO-06-905T
implemented three of our four earlier recommendations (for

example, they have developed an architecture for the electron

interface between DOD’s Clinical Data Repository and VA’s Healt

Data Repository).

ic

h

f

ta,

gAs our and others’ assessments of the VETSNET project over the 

is

ork,

tem. In

to the

 

6

 However, they have not yet developed a clearly 

defined project management plan that gives a detailed description o

the technical and managerial processes necessary to satisfy project 

requirements, as we recommended. Moreover, the departments have

experienced delays in their efforts to begin exchanging computable 

patient health data. The departments now expect that by the end of 

this month their joint facility in El Paso will begin to share 

computable outpatient pharmacy and medication allergy da

which will be able to support drug interaction checking and dru

allergy alerts. 

years have determined, the development and implementation of th

project have been hampered by inadequate project management and 

immature software development capabilities. VETSNET was 

originally intended to replace the aging Benefits Delivery Netw

which makes about 3.5 million payments to veterans each month, 

including compensation and pension benefits, education benefits, 

and vocational rehabilitation and employment benefits. In 1996 the

Veterans Benefits Administration (VBA) changed its focus to 

modernizing only the compensation and pension payment sys

our past reviews of the modernization project, we made a number of 

recommendations aimed at improving VBA’s software development 

capabilities and program management, including that the agency 

establish an integrated project plan to guide its transition from the

old to the new system. Although VBA took steps to respond to our 

recommendations, it did not establish an integrated project plan. In

2005, after postponing the target date for completion numerous 

times, VBA contracted for an independent assessment of its 

VETSNET program. This assessment concluded that the risks

program arose not from technical issues, but from management and 

6

 The other two implemented recommendations were that they select a lead entity with final 

decision-making authority for the initiative and that they establish a project management 

structure to provide day-to-day guidance of and accountability for their investments in and 

implementation of the interface capability. 

Page 4 GAO-06-905T
organizational issues like those that we had previously described. 

VBA reports that it is now developing a new integrated project plan

for the compensation and pension payment system that is to include

realistic milestones. According to VBA, only after this plan is 

completed will it begin developing plans for modernizing the 

systems for education benefits and for vocational rehabilitatio

employment benefits. Similarly, VBA has not yet developed plans for

making the transition to VETSNET and ending dependence on the 

Benefits Delivery Network. Without plans to move from the current

to the replacement system, VBA will lack assurance that it can 

continue to pay beneficiaries accurately and on time through th

transition period. 

n and

e

Background 

VA’s mission is to promote the health, welfare, and dignity of all 

that

ages

ion, loan

VA and DOD Have Been Working on Electronic Medical Records Since 1998 

veterans in recognition of their service to the nation by ensuring

they receive medical care, benefits, social support, and lasting 

memorials. The information technology programs that I will be

discussing today are primary concerns of two of VA’s major 

components:7

 the Veterans Health Administration, which man

one of the largest health care systems in the United States, with 157

hospitals nationwide, and the Veterans Benefits Administration, 

which provides benefits and services to veterans and their 

dependents that include compensation and pension, educat

guaranty, and insurance. 

In 1998, following a presidential call for VA and DOD to start 

h

 

developing a “comprehensive, life-long medical record for eac

service member,” the two departments began a joint course of 

action aimed at achieving the capability to share patient health

7

 VA’s third major component is the National Cemetery Administration, which is

responsible for providing burial benefits to veterans and eligible dependents. 

Page 5 GAO-06-905T
information for active duty military personnel and veterans.8

 Their 

first initiative, undertaken in that year, was known as the 

Government Computer-Based Patient Record (GCPR) project; the 

goal of this project was an electronic interface that would allow 

physicians and other authorized users at VA and DOD health 

facilities to access data from any of the other agency’s health 

information systems. The interface was expected to compile 

requested patient information in a virtual record that could be 

displayed on a user’s computer screen. 

In our reviews of the GCPR project, we determined that the lack of a 

lead entity, clear mission, and detailed planning to achieve that 

mission made it difficult to monitor progress, identify project risks, 

and develop appropriate contingency plans. In April 2001 and in 

June 2002,9

 we made recommendations to help strengthen the 

management and oversight of the project. In 2001, we recommended 

that the participating agencies (1) designate a lead entity with final 

decision-making authority and establish a clear line of authority for 

the GCPR project and (2) create comprehensive and coordinated 

plans that included an agreed-upon mission and clear goals, 

objectives, and performance measures, to ensure that the agencies 

could share comprehensive, meaningful, accurate, and secure 

patient health care data. In 2002, we recommended that the 

participating agencies revise the original goals and objectives of the 

project to align with their current strategy, commit the executive 

support necessary to adequately manage the project, and ensure 

that it followed sound project management principles. 

VA and DOD took specific measures in response to our 

recommendations for enhancing overall management and 

accountability of the project. By July 2002, VA and DOD had revised 

 8

 Initially, the Indian Health Service (IHS) also was a party to this effort, having been

included because of its population-based research expertise and its long-standing 

relationship with VA. However, IHS was not included in a later revised strategy for 

electronically sharing patient health information. 

9

 GAO, Veterans Affairs: Sustained Management Attention Is Key to Achieving 

Information Technology Results, GAO-02-703 ( Washington, D.C.: June 12, 2002) and 

Computer-Based Patient Records: Better Planning and Oversight by VA, DOD, and IHS 

Would Enhance Health Data Sharing, GAO-01-459 (Washington, D.C.: Apr. 30, 2001). 

Page 6 GAO-06-905T
their strategy and had made progress toward being able to 

electronically share patient health data. The two departments had 

refocused the project and named it the Federal Health Information 

Exchange (FHIE) program and, consistent with our prior 

recommendation, had finalized a memorandum of agreement 

designating VA as the lead entity for implementing the program. This 

agreement also established FHIE as a joint activity that would allow 

the transfer from DOD to VA of health care information in two 

phases: 

● The first phase, completed in mid-July 2002, enabled the one-way 

transfer of data from DOD’s existing health information system (the 

Composite Health Care System or CHCS) to a separate database 

that VA clinicians could access. 

● A second phase, finalized in March 2004, completed VA’s and DOD’s 

efforts to add to the base of patient health information available to 

VA clinicians via this one-way sharing capability. 

According to the December 2004 VA/DOD Joint Executive Council10

Annual Report, FHIE was fully operational, and providers at all VA 

medical centers and clinics nationwide had access to data on 

separated service members. According to the report, the FHIE data 

repository at that time contained historical clinical health data on 

2.3 million unique patients from 1989 on, and the repository made a 

significant contribution to the delivery and continuity of care and 

adjudication of disability claims of separated service members as 

they transitioned to veteran status. The departments reported total 

GCPR/FHIE costs of about $85 million through fiscal year 2003. 

In addition, officials stated that in December 2004, the departments 

began to plan for using the FHIE framework to transfer pre- and 

postdeployment health assessment data from DOD to VA. According 

to these officials, transferring of this information began in July 2005, 

and VA has now received about 1.3 million of these records on more 

than 560,000 separated service members. 

 10 The Joint Executive Council is composed of the Deputy Secretary of Veterans Affairs, the

Undersecretary of Defense for Personnel and Readiness, and the co-chairs of joint councils

on health, benefits, and capital planning. The council meets on a quarterly basis to 

recommend strategic direction of joint coordination and sharing efforts. 

Page 7 GAO-06-905T
However, not all DOD medical information is captured in CHCS. For 

example, according to DOD officials, as of September 2005, 1.7

million patient stay records were stored in the Clinical Information 

ical

ation between DOD and 

VA, which may also address systems outside of CHCS. Known as 

System (a commercial product customized for DOD). In addition, 

many Air Force facilities use a system called the Integrated Clin

Database for their medical information. 

The revised DOD/VA strategy also envisioned achieving a longer 

term, two-way exchange of health inform

HealthePeople (Federal), this initiative is premised on the 

departments’ development of a common health information 

architecture comprising standardized data, communications, 

security, and high-performance health information systems

joint effort is expected to result in the secured sharing of hea

between the new systems that each department is currently 

developing and beginning to implement—DOD’s AHLTA and VA’s

Health

. The

lth data

eVet VistA.

● DOD began developing AHLTA in 1997.

planned electronic interface—its Clinical Data 

Repository, and it expects to complete deployment of all of its major 

●

11 DOD has completed a key

component for the

system capabilities by 2011.12 (When we reported in June 2004, this 

deployment was expected in September 2008.) DOD expects to 

spend about $783 million for the system through fiscal year 2006.13

VA began work on HealtheVet VistA and its associated Health Data 

Repository in 2001 and expected to complete all six initiatives 

comprising this system in 2012. VA reported spending about $514

 11 At that time it was known as CHCS II. In November 2005, DOD renamed CHCS II the 

Armed Forces Health Longitudinal Technology Application (AHLTA).

12 DOD’s AHLTA capabilities are being deployed incrementally. The first increment 

provides a graphical user interface for clinical outpatient processes, thus providing an

electronic medical record capability. According to DOD, the first increment has been 

deployed to 115 of the 138 DOD health facilities. 

13 These expenditures represent total implementation and start-up costs and include, 

among other things, procurement, acquisition operations, and maintenance used for the

development, integration, and deployment of the system. 

Page 8 GAO-06-905T
million on initiatives that comprise HealtheVet VistA through fiscal 

year 2005.14 

Under the HealthePeople (Federal) initiative, VA and DOD envision

that, on entering military service, a health record for the service

member would be created and stored in DOD’s Clinical Data 

ould

d,

the

d

e

exchange

ation between the data repositories for 

their future health systems: that is, VA’s Health Data Repository (a 

Repository. The record would be updated as the service member 

receives medical care. When the individual separated from active

duty and, if eligible, sought medical care at a VA facility, VA w

then create a medical record for the individual, which would be 

stored in its Health Data Repository. On viewing the medical recor

the VA clinician would be alerted and provided with access to the 

individual’s clinical information residing in DOD’s repository. In

same manner, when a veteran sought medical care at a military 

treatment facility, the attending DOD clinician would be alerted an

provided with access to the health information in VA’s repository. 

According to the departments, this planned approach would mak

virtual medical records displaying all available patient health 

information from the two repositories accessible to both 

departments’ clinicians. 

To achieve this goal requires the departments to be able to

computable health inform

component of HealtheVet VistA) and DOD’s Clinical Data Repository 

(a component of AHLTA). In March 2004, the departments began a

effort to develop an interface linking these two repositories, known

as CHDR (a name derived from the abbreviations for DOD’s Clinical 

Data Repository—CDR—and VA’s Health Data Repository—HDR). 

According to the departments,

n

15 they planned to be able to exchange

selected health information through CHDR by October 2005. 

However, by September 2005, this deadline had slipped to February

2006 (and now to the end of June). 

 14 The six initiatives that make up HealtheVet VistA are the Health Data Repository, billing 

replacement, laboratory, pharmacy, imaging, and appointment scheduling replacement. 

This amount includes investments in these six initiatives by VA as reported in its

submission to the Office of Management and Budget for fiscal year 2005. 

15 December 2004 VA and DOD Joint Strategic Plan. 

Page 9 GAO-06-905T
Developing the two repositories, populating them with data, a

linking them through the CHDR interface would be important steps 

toward the two departments’ long-te

nd

rm goals as envisioned in 

HealthePeople (Federal). Achieving these goals would then depend 

on completing the development and deployment of the associated

health information systems—HealtheVet VistA and AHLTA. 

In a review of the CHDR program in June 2004,16 we reported that 

the efforts of DOD and VA in this area demonstrated a number of 

management weaknesses. Among these were the lack of a welldefined architecture for describing the interface for a common 

nd 

●

● select a lead entity with final decision-making authority for the 

● -day

estments in and

● implement a comprehensive and coordinated project 

ect

responsibility of

f

ting

 

health information exchange; an established project management 

lead entity and structure to guide the investment in the interface a

its implementation; and a project management plan defining the

technical and managerial processes necessary to satisfy project

requirements. With these critical components missing, VA and DOD

increased the risk that they would not achieve their goals. 

Accordingly, we recommended that the departments 

develop an architecture for the electronic interface between their 

health systems that includes system requirements, design 

specifications, and software descriptions; 

initiative; 

establish a project management structure to provide day-to

guidance of and accountability for their inv

implementation of the interface capability; and 

create and

management plan for the electronic interface that defines the 

technical and managerial processes necessary to satisfy proj

requirements and includes (1) the authority and

each organizational unit; (2) a work breakdown structure for all o

the tasks to be performed in developing, testing, and implemen

the software, along with schedules associated with the tasks; and

(3) a security policy. 

16 GAO, Computer-Based Patient Records: VA and DOD Efforts to Exchange Health Data 

Could Benefit from Improved Planning and Project Management, GAO-04-687 

(Washington, D.C.: June 7, 2004). 

Page 10 GAO-06-905T
In September 2005, we testified that VA and DOD had made 

progress in the electronic sharing of patient health data in their 

near-term demonstration projects. We noted that with regard to 

their long-term goals, the departments had improved the

management of the CHDR program, but that this program continued 

ject

for 

to face significant challenges—in particular, developing a pro

management plan of sufficient specificity to be an effective guide

the program.17 

Besides pursuing their long-term goals for future systems through 

the HealthePeople (Federal) strategy, the departments are working 

on two demonstration projects that focus on exchanging 

information between existing systems: (1) Bidirectional Health 

Information Exchange, a project to exchange health information on

o

t of

lity,

esigned

 

shared patients, and (2) Laboratory Data Sharing Interface, an 

application used to transfer laboratory work orders and results. 

These demonstration projects were planned in response t

provisions of the Bob Stump National Defense Authorization Ac

2003, which mandated that VA and DOD conduct demonstration 

projects that included medical information and information 

technology systems to be used as a test for evaluating the feasibi

advantages, and disadvantages of measures and programs d

to improve the sharing and coordination of health care and health 

care resources between the departments. 

Figure 1 is a time line showing initiation points for the VA and DOD 

efforts discussed here, including strategies, major programs, and the

recent demonstration projects. 

17 GAO, Computer-Based Patient Records: VA and DOD Made Progress, but Much Work

Remains to Fully Share Medical Information, GAO-05-1051T (Washington, D.C.: Sept. 28,

2005). 

Page 11 GAO-06-905T
Figure 1: History of Selected VA/DOD Electronic Medical Records and Data Sharing Efforts 

Work on VETSNET Dates to 1986 

The VETSNET effort grew out of an initiative begun by the Veterans 

Benefits Administration (VBA) in 1986 to replace its outdated 

Benefits Delivery Network. The Benefits Delivery Network, parts of 

which were developed in the 1960s, contains over 3 million veterans 

benefits records, including compensation and pension, education, 

and vocational rehabilitation and employment. Originally, the plan 

was to modernize all of these systems and in so doing provide a rich 

source for answering questions about veterans’ benefits and enable 

faster processing of benefits. As envisioned in the 1980s, the 

modernization would produce a faster, more flexible, higher 

capacity system that would be both an information system and a 

payment system. In 1996, after experiencing numerous false starts 

and spending approximately $300 million on the overall 

modernization of BDN, VBA revised its strategy and narrowed its 

focus to modernizing the compensation and pension payment 

system. 

Page 12 GAO-06-905T
At that time, we undertook an assessment of the department’s 

software development capability18 and determined that it was 

immature. In our assessment, we specifically examined the 

VETSNET effort and concluded that VBA could not reliably develop 

and maintain high-quality software on any major project within 

existing cost and schedule constraints. VBA showed significant 

weaknesses in requirements management, software project 

planning, and software subcontract management, with no 

identifiable strengths. We also testified that (1) VBA did not follow 

sound systems development practices on VETSNET, such as 

validation and verification of systems requirements; (2) it employed 

for the project a new systems development methodology and 

software development language not previously used; and (3) it did 

not develop the cost-benefit information necessary to track progress 

or assess return on investment (for example, total software to be 

developed and cost estimates).19 As a result, we concluded that 

VBA’s modernization efforts had inherent risks. 

Between 1996 and 2002 we reported several more times on

VETSNET, highlighting concerns in several areas. (See attachment 1 

for a description of the conclusions and findings of our products on 

this topic.) In these products, we made several recommendations 

aimed at improving VA’s software development capabilities, 

including that the department take steps to achieve greater maturity 

in its software development processes20 and that it delay any major 

investment in software development (beyond that needed to sustain

critical day-to-day operations) until it had done so. In addition, we 

made recommendations aimed specifically at VETSNET 

development, including that VBA assess and validate users’ 

 18 GAO, Software Capability Evaluation: VA’s Software Development Process Is 

Immature, GAO/AIMD-96-90 (Washington, D.C.: June 19, 1996). 

19 GAO, Veterans Benefits Modernization: Management and Technical Weaknesses Must 

Be Overcome If Modernization Is to Succeed, GAO/T-AIMD-96-103 (Washington, D.C.: June

19, 1996). 

20 Specifically, at the repeatable level of process maturity, basic project management 

processes are established to track cost, schedule, and functionality, and the necessary 

process discipline is in place to repeat earlier successes on projects with similar 

applications. 

Page 13 GAO-06-905T
requirements for the new system; complete testing of the system’s 

functional business capability, as well as end-to-end testing to 

ensure that payments are made accurately; and establish an 

integrated project plan to guide its transition from the old to the 

new system. 

Although VBA took various actions in response to these 

recommendations, we continued to identify the department’s weak 

software development capability as a significant factor contributing

to VBA’s persistent problems in developing and implementing the 

system—the same condition that we identified in 1996. We also 

reported that VBA continued to work on VETSNET without an 

integrated project plan. As a result, the development of VETSNET 

continued to suffer from problems in several areas, including 

project management, requirements development, and testing. 

VA and DOD Are Working to Share Medical Information 

VA and DOD have made progress in sharing patient health data by 

implementing applications developed under two demonstration 

projects that focus on the exchange of electronic medical 

information. The first—the Bidirectional Health Information 

Exchange—has been implemented at 16 VA/DOD locations, and the 

second—Laboratory Data Sharing Interface—has been implemented 

at 6 VA/DOD locations. 

Bidirectional Health Information Exchange. According to a 

VA/DOD annual report and program officials, Bidirectional Health 

Information Exchange (BHIE) is an interim step in the departments’ 

overall strategy to create a two-way exchange of electronic medical 

records. BHIE builds on the architecture and framework of FHIE, 

the application used to transfer health data on separated service 

members from DOD to VA. As discussed earlier, FHIE provides an 

interface between VA’s and DOD’s existing health information 

systems that allows one-way transfers only, which do not occur in 

real time: VA clinicians do not have access to transferred

information until about 6 weeks after separation. In contrast, BHIE 

Page 14 GAO-06-905T
focuses on the two-way, near-real-time21 exchange of information 

(text only) on shared patients (such as those at sites jointly 

occupied by VA and DOD facilities). This application exchanges 

data between VA’s VistA system and DOD’s CHCS system (and 

AHLTA where implemented). As of September 2005, the 

departments reported having spent $2.6 million on BHIE.22 

The primary benefit of BHIE is near-real-time access to patient 

medical information for both VA and DOD, which is not available 

through FHIE. During a site visit to a VA and DOD location in Puget 

Sound in 2005, we viewed a demonstration of this capability and 

were told by a VA clinician that the near-real-time access to medical 

information was very beneficial in treating shared patients. 

As of June 2006, BHIE was deployed at VA and DOD facilities at 16 

sites, where the exchange of demographic, outpatient pharmacy, 

radiology, laboratory, and allergy data (text only) has been 

achieved. In addition, according to officials, over 120 outpatient 

military clinics associated with these sites also have access to this 

information through BHIE. According to VA and DOD, BHIE will be

implemented at two more sites in July 2006.23 Table 1 presents a 

schedule for implementation of BHIE; the sites listed are all DOD 

sites with nearby VA facilities. 

Table 1: Implementation of BHIE at Selected DOD Facilities 

Facility Implementation date

Madigan Army Medical Center, Fort Lewis, Puget Sound, Wash. October 2004 

William Beaumont Army Medical Center, El Paso, Tex. October 2004 

Eisenhower Army Medical Center, Fort Gordon, Ga. September 2005 

Naval Hospital Great Lakes, Great Lakes, Ill. September 2005 

 21 Officials reported that on average, response time is less than 30 seconds. 

22 VA reported spending $2.4 million on BHIE through fiscal year 2006. DOD reported

spending $63.2 million through fiscal year 2006 for BHIE, FHIE, LDSI, and CHDR; it did not 

provide a breakdown for individual programs. 

23 According to the program manager, implementation of BHIE requires training of staff 

from both departments. In addition, implementation at DOD facilities requires installation 

of a server; implementation at VA facilities requires installation of a software patch 

(downloaded from a VA computer center), but no additional equipment. 

Page 15 GAO-06-905T
Facility Implementation date

Naval Medical Center, San Diego, Calif. September 2005 

National Naval Medical Center, Bethesda, Md. November 2005

Walter Reed Army Medical Center, Washington, D.C. November 2005

Malcolm Grow Medical Center, Andrews Air Force Base, Md. November 2005

Mike O’Callaghan Federal Hospital, Nellis Air Force Base, Nev. November 2005

Landstuhl Regional Medical Center, Landstuhl, Germany March 2006 

Tripler Army Medical Center, Honolulu, Hawaii April 2006 

Womack Army Medical Center, Fort Bragg, N.C. April 2006 

David Grant Medical Center, Travis Air Force Base, Calif. April 2006 

Brooke Army Medical Center, San Antonio, Tex. May 2006 

Wilford Hall Medical Center, San Antonio, Tex. May 2006 

Bassett Army Community Hospital, Fort Wainwright, Alaska May 2006 

Naval Hospital, Jacksonville, Fla. Planned for July 2006 

Naval Hospital, Charleston, S.C. Planned for July 2006 

Sources: VA and DOD. 

Note: VA facilities are sited near all the DOD facilities shown. 

Additionally, because DOD stores electronic medical information in

systems other than CHCS (such as the Clinical Information System

and the Integrated Clinical Database), work is currently under way 

to allow BHIE to have the ability to exchange information with 

those systems. Currently, one site is testing the use of BHIE as an 

interface allowing both departments’ staff to view discharge 

summaries stored in the Clinical Information System.24 DOD and VA

plan to perform a side-by-side comparison to ensure that this 

capability maintains data quality. When they are satisfied, the 

capability will be provided to those DOD locations that currently 

use the Clinical Information System and have BHIE implemented. 

Doing so will permit all VA sites access to the information in the 

Clinical Information System on shared patients at DOD sites running 

BHIE. 

In addition, at the VA/DOD site in El Paso, a prototype is being 

designed for exchanging radiological images using the BHIE/FHIE 

infrastructure. If the prototype is successful, this capability will be 

extended to the rest of the sites. 

 24 VA and DOD are planning to initiate the pilot at a second site in August 2006. 

Page 16 GAO-06-905T
Laboratory Data Sharing Interface. The Laboratory Data Sharing 

Interface (LDSI) initiative enables the two departments to share 

laboratory resources. Through LDSI, a VA provider can use VA’s 

health information system to write an order for laboratory tests, and

that order is electronically transferred to DOD, which performs the 

test. The results of the laboratory tests are electronically transferred 

back to VA and included in the patient’s medical record. Similarly, a 

DOD provider can choose to use a VA lab for testing and receive the 

results electronically. Once LDSI is fully implemented at a facility, 

the only nonautomated action in performing laboratory tests is the 

transport of the specimens. 

Among the benefits of LDSI are increased speed in receiving 

laboratory results and decreased errors from manual entry of 

orders. However, according to the LDSI project manager in San 

Antonio, a primary benefit of the project will be the time saved by 

eliminating the need to rekey orders at processing labs to input the 

information into the laboratories’ systems. Additionally, the San 

Antonio VA facility will no longer have to contract out some of its 

laboratory work to private companies, but instead use the DOD 

laboratory. As of September 2005, the departments reported having 

spent about $3.3 million on LDSI.25 

An early version of what is now LDSI was originally tested and 

implemented at a joint VA and DOD medical facility in Hawaii in 

May 2003. The demonstration project built on this application and 

enhanced it; the resulting application was tested in San Antonio and 

El Paso. It has now been deployed to six sites. According to the 

departments, a plan to export LDSI to two additional locations has 

been approved. Table 2 shows the locations at which it has been or 

is to be implemented. 

 25 VA reported spending $1 million on LDSI through fiscal year 2006. DOD reported 

spending $63.2 million through fiscal year 2006 for BHIE, FHIE, LDSI, and CHDR; it did not 

provide a breakdown for individual programs. 

Page 17 GAO-06-905T
Table 2: Implementation of LDSI at VA/DOD Facilities 

Facility Implementation date 

Tripler Army Medical Center and 

VA Spark M. Matsunaga Medical Center, Hawaii 

May 2003 

Kirtland Air Force Base and 

Albuquerque VA Medical Center, N.Mex.a

May 2003 

Naval Medical Center and 

San Diego VA Health Care System, Calif. 

July 2004 

Great Lakes Naval Hospital and 

VA Medical Center, Ill. 

October 2004 

William Beaumont Army Medical Center, El Paso, Tex. October 2004 

Brooke Army Medical Center, San Antonio, Tex. August 2005 

Bassett Army Community Hospital, Alaska Planned for June 

2006 

Nellis Air Force Base, Nev. Planned for 

September 2006 

Sources: VA and DOD.

a According to officials, although LDSI was implemented at this site, it is no longer being actively used.

VA and DOD Are Taking Action to Achieve a Virtual Medical Record, but Much Work 

Remains 

Besides the near-term initiatives just discussed, VA and DOD 

continue their efforts on the longer term goal: to achieve a virtual 

medical record based on the two-way exchange of computable data 

between the health information systems that each is currently 

developing. The cornerstone for this exchange is CHDR, the planned 

electronic interface between the data repositories for the new 

systems. 

The departments have taken important actions on the CHDR 

initiative. As we testified in September 2005,26 they successfully 

completed Phase I of CHDR in September 2004 by demonstrating 

the two-way exchange of pharmacy information with a prototype in 

a controlled laboratory environment.27 According to department 

 26 GAO, Computer-Based Patient Records: VA and DOD Made Progress, but Much Work

Remains to Fully Share Medical Information, GAO-05-1051T (Washington, D.C.: Sept. 28,

2005). 

27 The completion of the pharmacy prototype project satisfied a mandate of the 2003 Bob

Stump National Defense Authorization Act, Pub. L. 107-314, sec. 724 (2002). 

Page 18 GAO-06-905T
officials, the pharmacy prototype provided invaluable insight into 

each other’s data repository systems, architecture, and the work 

that is necessary to support the exchange of computable 

information. These officials stated that lessons learned from the 

development of the prototype were documented and being applied 

to Phase II of CHDR, the production phase, which is to implement 

the two-way exchange of patient health records between the 

departments’ data repositories. Further, the same DOD and VA 

teams that developed the prototype were developing the production 

version. 

In addition, the departments developed an architecture for the 

CHDR electronic interface, as we recommended in June 2004. The 

architecture for CHDR includes major elements required in a 

complete architecture. For example, it defines system requirements 

and allows these to be traced to the functional requirements, it 

includes the design and control specifications for the interface 

design, and it includes design descriptions for the software. 

Also in response to our recommendations, the departments 

established project accountability and implemented a joint project 

management structure. Specifically, the Health Executive Council 

was established as the lead entity for the project. The joint project 

management structure consists of a Program Manager from VA and 

a Deputy Program Manager from DOD to provide day-to-day 

guidance for this initiative. Additionally, the Health Executive 

Council established the DOD/VA Information 

Management/Information Technology Working Group and the 

DOD/VA Health Architecture Interagency Group, to provide 

programmatic oversight and to facilitate interagency collaboration 

on sharing initiatives between DOD and VA. 

To build on these actions and successfully carry out the CHDR 

initiative, however, the departments still have a number of 

challenges to overcome. The success of CHDR will depend on the 

departments’ instituting a highly disciplined approach to the 

project’s management. Industry best practices and information 

technology project management principles stress the importance of 

accountability and sound planning for any project, particularly an 

interagency effort of the magnitude and complexity of this one. 

Page 19 GAO-06-905T
Accordingly, in 2004 we recommended that the departments develop 

a clearly defined project management plan that describes the 

technical and managerial processes necessary to satisfy project 

requirements and includes (1) the authority and responsibility of

each organizational unit; (2) a work breakdown structure for all of 

the tasks to be performed in developing, testing, and implementing 

the software, along with schedules associated with the tasks; and 

(3) a security policy. As of September 2005, the departments had an 

interagency project management plan that provided the program 

management principles and procedures to be followed by the 

project. However, this plan did not specify the authority and 

responsibility of organizational units for particular tasks; the work 

breakdown structure was at a high level and lacked detail on 

specific tasks and time frames; and security policy was still being 

drafted. No more recent plan has yet been provided. Without a plan 

of sufficient detail, VA and DOD increase the risk that the CHDR 

project will not deliver the planned capabilities in the time and at 

the cost expected. 

In addition, officials did not meet a previously established 

milestone: by October 2005, the departments had planned to be able 

to exchange outpatient pharmacy data, laboratory results, allergy 

information, and patient demographic information on a limited 

basis. However, according to officials, the work required to 

implement standards for pharmacy and medication allergy data was 

more complex than originally anticipated and would result in a 

delay. The new target date for the limited exchange of medication 

allergy, outpatient pharmacy, and patient demographic data has 

been postponed from February to June 2006.

Currently, the departments report that they are close to finishing the 

development of a pilot to perform this data exchange at their joint 

facility in El Paso. They expect to be able to begin the pilot by the 

end of this month, which will allow them to share outpatient 

pharmacy and medication allergy information that can support drugdrug interaction checking and drug-allergy alerts. If the pilot is 

successful, it will enable for the first time the exchange of 

computable information between the departments’ two data 

repositories. 

Page 20 GAO-06-905T
Finally, the health information currently in the data repositories has 

various limitations. 

● Although DOD’s Clinical Data Repository includes data in the 

categories that were to be exchanged at the missed milestone 

described above (outpatient pharmacy data, laboratory results, 

allergy information, and patient demographic information), these 

data are not yet complete. First, the information in the Clinical Data

Repository is limited to those locations that have implemented the 

first increment of AHLTA, DOD’s new health information system. As

of June 15, 2006, according to DOD officials, 115 of 138 medical 

treatment facilities worldwide have implemented this increment, 

and officials expect that the remaining facilities will receive the 

increment by the end of this year. Second, at present, health 

information in systems other than CHCS (such as the Clinical 

Information System and the Integrated Clinical Database) is not yet 

being captured in the Clinical Data Repository. However, work is 

currently under way to allow BHIE to have the ability to exchange 

information with those systems. 

● The information in VA’s Health Data Repository is also limited: 

although all VA medical records are currently electronic, VA has to 

convert these into the interoperable format appropriate for the 

Health Data Repository. So far, the data in the Health Data 

Repository consist of patient demographics, vital signs records, 

allergy data, and outpatient pharmacy data for the 6 million veterans 

who have electronic medical records in VA’s current system, VistA 

(this system contains all the department’s medical records in 

electronic form). VA officials told us that they are currently 

converting lab results data. 

VA Has Been Severely Challenged by VETSNET Project 

Since its inception, the VETSNET program has been plagued by 

problems. In 2002, we offered a number of recommendations 

regarding the ongoing compensation and pension (C&P) 

replacement program. We testified that VBA should assess and 

validate users’ requirements for the new system and complete 

Page 21 GAO-06-905T
testing of the system’s functional business capability, including endto-end testing.28 We also recommended that VA appoint a project 

manager, thoroughly analyze its current initiative, and develop a 

number of plans, including a revised C&P replacement strategy and 

an integrated project plan. We also noted that VBA had much work 

to do before it could fully implement the VETSNET C&P system by 

its target date (at that time) of 2005, and thus it would have to 

ensure that the aging Benefits Delivery Network (BDN) would be 

available to continue accurately processing benefits payments until 

a new system could be deployed. Accordingly, we recommended 

that VBA develop action plans to move from the current to the 

replacement system and to ensure the availability of BDN to provide 

the more than 3.5 million payments made to veterans each month.29 

VA concurred with our recommendations and took several actions 

to address them. For example, it appointed a full-time project 

manager. Also, the project team reported that to ensure that 

business needs were met, certification had been completed of users’ 

requirements for the system’s applications. 

In addition, VA reported that a revised strategy for the replacement 

system was completed. This revised strategy included the business 

case, described the methodology used to identify system 

development alternatives, displayed the cost/benefit analysis results 

of the viable alternatives that could be used to develop the system, 

and provided a description of the recommended development plan. 

Based on this strategy, the Secretary of Veterans Affairs, Assistant 

Secretary for Information and Technology, the Under Secretary for 

Benefits, and the Deputy Chief Information Officer for Benefits 

approved continuation of the VETSNET development in September 

2002. 

Further, to ensure that the benefits delivery network would be able 

to continue accurately processing benefits payment until the new 

 28 GAO, VA Information Technology: Progress Made, but Continued Management 

Attention Is Key to Achieving Results, GAO-02-369T (Washington, D.C.: Mar. 13, 2002). 

29 GAO, Veterans Affairs: Sustained Management Attention Is Key to Achieving 

Information Technology Results, GAO-02-703 (Washington, D.C.: June 12, 2002). 

Page 22 GAO-06-905T
system was deployed, VBA purchased additional BDN hardware, 

hired 11 new staff members to support BDN operations, 

successfully tested a contingency plan in the event of disruption of 

the system, and provided retention bonuses to staff familiar with 

BDN operations. 

However, VBA did not develop an integrated project plan for 

VETSNET, which is a basic requirement of sound project 

management. In addition, it did not develop an action plan for 

transitioning from the current to the replacement system. Thus, 

although the actions taken addressed some of our specific concerns, 

they were not sufficient to establish the program on a sound footing. 

In 2005, the VA CIO became concerned by continuing problems with 

VETSNET: the project continued to postpone target dates, and costs 

continued to increase (VA indicated that by 2005 these costs 

exceeded $69 million). Accordingly, he arranged to contract for an 

independent assessment of the department’s options for the 

VETSNET project, including an evaluation of whether the program 

should be terminated. This assessment, conducted by the Carnegie 

Mellon Software Engineering Institute (SEI), concluded that the 

program faced many risks arising from management, organizational, 

and program issues, but no technical barriers that could not be 

overcome.30 According to SEI, terminating the program would not 

solve the underlying management and organizational problems, 

which would continue to hamper any new or revised effort. 

SEI recommended that the department not terminate the program 

but take an aggressive approach to dealing with the issues SEI 

described while continuing to work on the program at a reduced 

pace. According to SEI, this approach would allow VA to make 

necessary improvements to its system and software engineering and 

program management capabilities while making gradual progress on 

the system. SEI also discussed specific concerns about the system’s

management and the organization’s capabilities, presenting areas 

 30 Kathryn Ambrose, William Novak, Steve Palmquist, Ray Williams, and Carol Woody, 

Report of the Independent Technical Assessment on the Department of Veterans Affairs 

VETSNET Program (Carnegie Mellon Software Engineering Institute, September 2005). 

Page 23 GAO-06-905T
that required focus regardless of the particular course that VA chose 

for the system. For example: 

● Setting realistic deadlines. SEI commented that there was no 

credible evidence that VETSNET would be complete by the target 

date, which at the time of the SEI review was December 2006. 

Because this deadline was unrealistic, VBA needed to plan and 

budget for supporting BDN so that its ability to pay veterans 

benefits would not be disrupted. 

● Establishing an effective requirements process. 

● Implementing effective program measurements in order to assess 

progress. 

● Establishing sound program management. According to SEI, 

different organizational components had independent schedules and 

priorities, which caused confusion and deprived the department of a 

program perspective. 

These observations are consistent with our long-standing concerns 

regarding fundamental deficiencies in VBA’s management of the 

project. 

In the wake of the SEI assessment and recommendations, VA is in 

the process of creating, with contract help, an integrated master 

plan that is to cover the C&P replacement project. Because this plan 

is in process, no cost or schedule milestones have yet been finalized. 

According to VA, the integrated master plan is to be completed by 

the end of August 2006. 

VA officials told us that they intend to complete this plan before 

beginning to plan for modernizing the systems for paying education 

benefits or for paying vocational rehabilitation and employment 

benefits. Plans for making the transition to VETSNET and ending 

VBA’s dependence on BDN are also on hold.

Thus, VA still lacks an integrated project plan or a plan to move 

from the current to the replacement system. Until it has an 

integrated project plan and schedule incorporating all the critical 

areas of the system development effort, VBA will lack the means of 

determining what needs to be done and when, and of measuring 

progress. Without plans to move from the current to the 

Page 24 GAO-06-905T
replacement system, VBA will lack assurance that it can c

pay beneficiaries accurately and on time through the transition 

period. 

ontinue to

In summary, developing an electronic interface that will enable VA 

its—

n

face

de

ficity 

y

VA has also been working to modernize the delivery of benefits 

as

that

ding

Mr. Chairman, this concludes my statement. I would be pleased to 

and DOD to exchange computable patient medical records is a 

highly complex undertaking that could lead to substantial benef

improving the quality of health care and disability claims processing 

for the nation’s service members and veterans. VA and DOD have 

made progress in the electronic sharing of patient health data in 

their limited, near-term demonstration projects, and have taken a

important step toward their long-term goals by improving the 

management of the CHDR program. However, the departments

considerable work and significant challenges before they can 

achieve these long-term goals. While the departments have ma

progress in developing a project management plan, it is not yet 

complete. Having a project management plan of sufficient speci

to guide the program—including establishing accountability and 

addressing security—would help the departments avoid further 

delays in their schedule and ensure that they produce a capabilit

that meets their expectations. 

through its development of VETSNET, but the pace of progress h

been discouraging. Much work remains in accomplishing the 

original comprehensive goal of modernizing the aging system

VBA currently depends on to pay veterans benefits. Until VBA 

develops an integrated project plan that addresses the long-stan

management weaknesses that we and others have identified, it will 

be uncertain when and at what cost VETSNET will be delivered. 

respond to any questions that you or other members of the 

Subcommittee may have at this time. 

Page 25 GAO-06-905T
Contacts and Acknowledgments 

For information about this testimony, please contact Linda D. 

Koontz, Director, Information Management Issues, at (202) 512-6240 

or at koontzl@gao.gov. Other individuals making key contributions 

to this testimony include Barbara S. Collier, Martin Katz, Barbara S. 

Oliver, Eric L. Trout, Robert Williams Jr., and Charles Youman.

Page 26 GAO-06-905T
Attachment 1. Past GAO Products Highlighting VETSNET Concerns 

We previously performed several reviews addressing VETSNET and 

made numerous recommendations aimed at strengthening the 

program and VA’s software development and management 

capabilities. The table summarizes the results of these reviews. 

GAO Products Highlighting Concerns with VETSNET Project to Replace Compensation and Pension (C&P) Payment System

Issuance date 

Report/testimony Results of review

June 19, 1996 

GAO/T-AIMD-96-103

VETSNET had inherent risks in that (1) it did not follow sound systems development practices, such as 

validation and verification of systems requirements; (2) it employed a new systems development 

methodology and software development language not previously used; and (3) VBA did not develop the 

cost-benefit information necessary to track progress or assess return on investment (for example, total 

software to be developed and cost estimates). 

June 19, 1996 

GAO/AIMD-96-90

VBA’s software development capability was immature and it could not reliably develop and maintain highquality software on any major project within existing cost and schedule constraints, placing its software 

development projects at significant risk. VBA showed significant weaknesses in requirements management, 

software project planning, and software subcontract management, with no identifiable strengths. 

May 30, 1997 

GAO/AIMD-97-79 

VETSNET experienced schedule delays and missed deadlines because (1) it employed a new software 

development language not previously used by the development team, one that was inconsistent with the 

agency’s other systems development efforts; (2) the department’s software development capability was 

immature and it had lost critical systems control and quality assurance personnel, and (3) VBA lacked a 

complete systems architecture; for example, neither a security architecture nor performance characteristics 

had been defined for the project. 

September 15, 1997 

GAO/AIMD-97-154

VBA’s software development capability remained ad hoc and chaotic, subjecting the agency to continuing 

risk of cost overruns, poor quality software, and schedule delays in software development. 

May 11, 2000 

GAO/T-AIMD-00-74

$11 million had reportedly been spent on VETSNET C&P; neither the May 1998 completion date nor the 

revised completion date of December 1998 were met. Contributing factors included lack of an integrated

architecture defining the business processes, information flows and relationships, business requirements,

and data descriptions, and VBA’s immature software development capability. 

September 21, 2000 

GAO/T-AIMD-00-321

VBA’s software development capability remained ad hoc and chaotic. The VETSNET implementation 

approach lacked key elements, including a strategy for data conversion and an integrated project plan and

schedule incorporating all critical systems development areas. Further, data exchange issues had not been 

fully addressed. 

April 4, 2001 

GAO-01-550T

The project’s viability was still a concern. It continued to lack an integrated project plan and schedule 

addressing all critical systems development areas, to be used as a means of determining what needs to be 

done and when. A pilot test of 10 original claims that did not require significant development work may not 

have been sufficient to demonstrate that the product was capable of working as intended in an 

organizationwide operational setting. 

March 13, 2002

GAO-02-369T

VBA still had fundamental tasks to accomplish before it could successfully complete development and 

implementation. It still had to assess and validate users’ requirements for the new system to ensure that 

business needs were met. It needed to complete testing of the system’s functional business capability, as

well as end-to-end testing to ensure that payments would be made accurately. Finally, it needed to establish 

an integrated project plan to guide its transition from the old to the new system. 

Page 27 GAO-06-905T
Issuance date 

Report/testimony Results of review

June 12, 2002

GAO-02-703

VA still needed to address long-standing concerns regarding development and implementation. VA needed 

to appoint a project manager, undertake a complete analysis of the initiative, and develop plans, including a 

revised C&P replacement system strategy and an integrated project plan. It also needed to develop and 

implement action plans to move VBA from the current to the replacement system and to ensure that the 

Benefits Delivery Network would be able to continue accurately processing benefits payments until the new 

system was deployed. 

September 26, 2002 

GAO-02-1054T

Much work remained before VBA could fully implement the VETSNET C&P system, and complete 

implementation was not expected until 2005. This meant that VBA had to continue relying on its aging 

Benefits Delivery Network to provide the more than 3.5 million payments that VA had to make to veterans 

each month. 

In late March, a VETSNET executive board and a project control board were established to provide decision 

support and oversee implementation, and VBA expected to hire a full-time project manager by the end of

September. VBA also began revalidating functional business requirements for the new system, with 

completion planned by January 2003, and it identified actions needed to transition VBA from the current to 

the replacement system. VBA also hired a contractor and tasked the contractor with conducting functional, 

integration, and linkage testing, as well as software quality assurance for each release of the system 

applications. 

Despite these actions, completing implementation of the new system could take several years. All but one of 

the software applications for the new system still needed to be fully deployed or developed. Specifically, a 

rating board automation tool (RBA 2000) was deployed, although VBA did not plan to require all its regional 

offices to use it until July 2003. In addition, two others had not been completely deployed: one of these 

(Share, used to establish a new claim) was in use by only 6 of the 57 regional offices. The other (Modern

Award Processing–Development, used to develop information on claims) was in pilot testing at two regional 

offices—Salt Lake and Little Rock—but was not expected to be implemented at the other 55 regional offices 

until October 2003. The remaining three software applications (Award Processing, Finance and Accounting 

System, and Correspondence) were still in development. 

Source: GAO.

(310772) Page 28 GAO-06-905T
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
GAO’s Mission The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To

have GAO e-mail you a list of newly posted products every afternoon, go 

to www.gao.gov and select “Subscribe to Updates.” 

The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Mail or Phone 

To Report Fraud,

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

PRINTED ON RECYCLED PAPER