49–006 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 109–643 

DEPARTMENT OF VETERANS AFFAIRS MEDICAL FACILITY 

AUTHORIZATION ACT OF 2006 

SEPTEMBER 8, 2006.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. BUYER, from the Committee on Veterans’ Affairs, 

submitted the following 

R E P O R T 

[To accompany H.R. 5815] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Veterans’ Affairs, to whom was referred the 

bill (H.R. 5815) to authorize major medical facility projects and 

major medical facility leases for the Department of Veterans Affairs for fiscal years 2006 and 2007, and for other purposes, having 

considered the same, report favorably thereon with amendments 

and recommend that the bill as amended do pass. 

The amendments (stated in terms of the page and line numbers 

of the introduced bill) are as follows: 

Page 3, lines 9 and 14, insert ‘‘or nearby’’ after ‘‘in’’. 

Page 19, after line 24, insert the following new section (and conform the table of contents accordingly): 

SEC. 13. REPORT ON OPTION FOR CONSTRUCTION OF A DEPARTMENT OF VETERANS AFFAIRS MEDICAL 

CENTER IN OKALOOSA COUNTY, FLORIDA. 

Not later than 180 days after the date of the enactment 

of this Act, the Secretary of Veterans Affairs shall submit 

to the Committees on Veterans’ Affairs of the Senate and 

House of Representatives a report identifying and outlining the various options available to the Department for 

the placement of a Department of Veterans Affairs Medical 

Center in Okaloosa County, Florida. The report shall include the following: 

(1) The feasibility of entering into a partnership 

with Eglin Air Force Base for the construction and operation of a new, joint Department of Veterans AffairsDepartment of Defense facility. 


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(2) The medical, legal, and financial implications of 

each of the options identified, including recommendations regarding any statutory changes necessary for 

the Department to carry out any of the options identified. 

(3) A detailed cost-benefit analysis of each of the options identified. 

(4) Estimates regarding the length of time and associated costs needed to complete such a facility under 

each of the options identified. 

INTRODUCTION

On Thursday, May 11, 2006, the full Committee held a hearing 

that preceded the introduction of H.R. 5815, to consider the Secretary of Veterans Affairs request for authorization for several 

major construction projects and leases which would improve, renovate and/or update patient care facilities at various locations. 

Witnesses who appeared before the Committee included Honorable Richard H. Baker, Member of Congress from the State of Louisiana; Honorable Charlie Melancon, Member of Congress from the 

State of Louisiana; Honorable Tom Feeney, Member of Congress 

from the State of Florida; Honorable Jonathan B. Perlin, M.D., 

Ph.D., M.S.H.A., F.A.C.P., Under Secretary for Health, Veterans 

Health Administration, accompanied by the following individuals 

from the Department of Veterans Affairs (VA): Honorable Tim S. 

McClain, General Counsel; Mr. Robert L. Neary, Jr., Acting Chief 

Facilities Management Officer, Veterans Health Administration; 

Cathleen C. Wiblemo, Deputy Director, Veterans Affairs and Rehabilitation Commission, The American Legion; Mr. Dennis Cullinan, 

Director National Legislative Service, Veterans of Foreign Wars. 

On July 17, 2006, Honorable Henry E. Brown, Jr. and Honorable 

Michael H. Michaud, introduced H.R. 5815. 

On July 20, 2006, the full Committee met and ordered H.R. 5815 

reported favorably to the House by unanimous voice vote. 

SUMMARY OF THE REPORTED BILL

H.R. 5815, as amended, would: 

1. Authorize the Secretary of Veterans Affairs to carry out a 

major medical facility construction project for restoration of the 

Department of Veterans Affairs Medical Center (VAMC), Biloxi, Mississippi and consolidation of services performed at the 

VAMC, Gulfport, Mississippi, in an amount not to exceed 

$310,000,000; 

2. Authorize advance planning and design and site preparation for a co-located, joint-use major medical facility project in 

or near New Orleans, Louisiana with the Louisiana State University, in an amount not to exceed $100,000,000; 

3. Authorize only advance planning and design for a co-located, joint-use major medical facility project in Charleston, 

South Carolina, with the Medical University of South Carolina, 

in an amount not to exceed $70,000,000; 

4. Authorize the Secretary to enter into an agreement to purchase a site for the replacement of the VAMC, Denver, Colorado, in an amount not to exceed $98,000,000; 


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5. Require VA to submit a report to the Committees on Veterans’ Affairs of the Senate and House of Representatives on 

the viability of entering into a public or suitable non-profit organization partnership for the construction and operation of a 

facility that would replace the current VAMC, Denver, Colorado, not later than 180 days after the date of enactment; 

6. Authorize the construction of an outpatient clinic and regional office, at the VAMC, Anchorage, Alaska, in an amount 

not to exceed $75,270,000; 

7. Authorize the consolidation of clinical and administrative 

functions of the VAMC in Cleveland, Ohio, and the VAMC in 

Brecksville, Ohio, in an amount not to exceed $102,300,000; 

8. Authorize construction of an extended care building at the 

VAMC in Des Moines, Iowa, in an amount not to exceed 

$25,000,000; 

9. Authorize the renovation of patient wards at the VAMC 

in Durham, North Carolina, in an amount not to exceed 

$9,100,000; 

10. Authorize the correction of patient privacy deficiencies at 

the VAMC in Gainesville, Florida, in an amount not to exceed 

$85,200,000; 

11. Authorize the 7th and 8th floor wards modernization addition at the VAMC in Indianapolis, Indiana, in an amount not 

to exceed $27,400,000; 

12. Authorize the construction of a new medical center facility at the VAMC in Las Vegas, Nevada, in an amount not to 

exceed $406,000,000; 

13. Authorize the construction of an ambulatory surgery/outpatient diagnostic support center in the Gulf South Submarket 

of Veterans Integrated Service Network (VISN) 8 and completion of Phase 1 land purchase, Lee County, Florida, in an 

amount not to exceed $65,100,000; 

14. Authorize seismic corrections, buildings 7 and 126, at the 

VAMC in Long Beach, California, in an amount not to exceed 

$107,845,000; 

15. Authorize seismic corrections, buildings 500 and 501, at 

the VAMC in Los Angeles, California, in an amount not to exceed $79,900,000; 

16. Authorize the construction of a new medical center facility in the Orlando, Florida, area in an amount not to exceed 

$377,700,000 and require the facility be located at the site in 

Lake Nona known as site selection C; 

17. Authorize the consolidation of campuses at the University Drive and H. John Heinz III divisions at the VAMC in 

Pittsburgh, Pennsylvania, in an amount not to exceed 

$189,205,000; 

18. Authorize ward upgrades and expansion at the VAMC in 

San Antonio, Texas, in an amount not to exceed $19,100,000; 

19. Authorize the construction of a spinal cord injury center 

at the VAMC in Syracuse, New York, in an amount not to exceed $77,700,000; 

20. Authorize upgrades essential electrical distribution systems at the VAMC in Tampa, Florida, in an amount not to exceed $49,000,000; 


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21. Authorize the expansion of the spinal cord injury center 

addition at the VAMC in Tampa, Florida, in an amount not to 

exceed $7,100,000; 

22. Authorize blind rehabilitation and psychiatric bed renovations and a new construction project at the VAMC in Temple, Texas, in an amount not to exceed $56,000,000; 

23. Authorize a lease for an outpatient clinic in Baltimore, 

Maryland, in the amount of $10,908,000; 

24. Authorize a lease for an outpatient clinic in Evansville, 

Indiana, in the amount of $8,989,000; 

25. Authorize a lease for an outpatient clinic in Smith County, Texas, in the amount of $5,093,000; 

26. Authorize a lease for an outpatient and specialty care 

clinic in Austin, Texas, in the amount of $6,163,000; 

27. Authorize a lease for an outpatient clinic in Lowell, Massachusetts, in the amount of $2,520,000; 

28. Authorize a lease for an outpatient clinic in Grand Rapids, Michigan, in the amount of $4,409,000; 

29. Authorize up to four leases for outpatient clinics in Las 

Vegas, Nevada, in the amount of $8,518,000; 

30. Authorize a lease for an outpatient clinic in Parma, Ohio, 

in the amount of $5,032,000; 

31. Authorize appropriations of $578,000,000 for major medical facility projects in paragraphs 1 through 4 (above); 

32. Authorize appropriations of $1,758,920,000 for major 

medical facility projects in paragraphs 6 through 22 (above); 

33. Authorize appropriations of $24,990,000 for leases for FY 

2006 in paragraphs 23 through 25 (above); 

34. Authorize appropriations of $26,642,000 for leases for FY 

2007 in paragraphs 26 through 30 (above); 

35. Require the VA to submit a report to the Committees on 

Veterans’ Affairs of the Senate and House of Representatives 

on the viability of entering into a public or suitable non-profit 

organization partnership for the construction and operation of 

a facility that would replace the current VAMC in San Juan, 

Puerto Rico, not later than 180 days after the date of enactment; 

36. Allow the VA to transfer certain historic properties on 

the Fort Thomas, KY campus of the Cincinnati VAMC to the 

city of Fort Thomas for fair market value; 

37. Establish within the VA the position of Director, Construction and Facilities Management. Require this position to 

be a career appointment, the individual appointed to meet certain qualifications and have responsibility for Department-wide 

construction and facility management; 

38. Require the VA to submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives, not 

later than 180 days after the date of enactment, a business 

plan for enhanced access to outpatient care for primary, mental health and specialty care through new sites of care, expansions at existing sites, use of existing authority and policies to 

contract for care where necessary, and increased use of telemedicine in each of the following areas: (1) the Lewiston-Auburn area of Maine; (2) the area of Houlton, Maine; (3) the 


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area of Dover-Foxcroft, Maine; and (4) area of Whiteside County, Illinois; 

39. Require the VA to submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives, not 

later than 180 days after the date of enactment, a report on 

the options for the construction of a new medical facility in 

Okaloosa County, Florida. 

BACKGROUND AND DISCUSSION

Section 8104(a)(2) of title 38, United States Code, requires Congressional authorization of any Department of Veterans Affairs 

(VA) major medical facility construction project, defined as a 

‘‘project for the construction, alteration, or acquisition of a medical 

facility involving a total expenditure of more than $7,000,000’’ and 

any medical facility lease with an annual lease payment of more 

than $600,000. 

In accordance with the law, on April 5, 2006, the Secretary transmitted to the Speaker of the House of Representatives a request for 

authorization of $1,606,000,000 for major facility construction 

projects and $24,990,000 for major facility leases for FY (FY) 2006 

and $351,966,000 for major facility construction projects and 

$26,642,000 for major facility leases for FY 2007. In addition, the 

Department sought a three-year extension of the authority granted 

it under section 221 of Public Law 108–170 that authorized major 

construction projects in connection with the Capital Asset Realignment for Enhanced Services (CARES) initiative. This authority is 

set to expire on September 30, 2006. 

H.R. 5815 takes exception with certain of the Administration’s 

individual requests. A significant exception is that the Committee, 

at this time, has chosen not to authorize six requested FY 2007 

major medical facility construction projects requested by the Department. The Committee is concerned that a lack of long-term 

strategic planning related to infrastructure inside the VA has 

placed the Department in a difficult position by allowing a great 

number of major projects to accumulate over time. The Committee 

encourages the Department to focus on those projects that: (1) have 

been previously authorized and begun; (2) have been authorized 

under CARES but not begun; and (3) have already received appropriated dollars. As we have seen with the need for significant and 

expensive Hurricane Katrina-related construction, the VA capital 

plan requires constant monitoring, frequent review and, at times, 

significant modification. It is not the intent of the Committee to 

micromanage the VA construction budget or to delay the Department’s capital plan. The Committee’s actions should not be construed as a reflection concerning the merits of the Department’s FY 

2007 major medical facility requests, but rather the Committee 

wishes to ensure that proper prioritization is applied to the Department’s short and long-term construction projects. Likewise, the 

Committee has decided not to extend the Department’s authority 

under Public Law 108–170. The Committee believes that any authority granted to the Department to undertake major medical facility projects must be granted explicitly by the Committee and be 

consistent with the Committee’s oversight and authorization authority. 


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MAJOR MEDICAL FACILITY PROJECTS

The Committee believes that VA collaboration with the Department of Defense, its extensive State medical university affiliations, 

and other public or suitable non-profit partnerships, in order to 

maximize local health care economies can, in many cases, be mutually advantageous for all organizations and patient populations and 

be an important tool in ensuring that veterans receive the best possible medical care. The resulting reduction in capital and operational expenditures and the elimination of duplicative clinical facilities can result in greater resources being devoted to direct patient care. 

Biloxi, Mississippi: Section 2 of the bill, as amended, would authorize the requested amount of $310,000,000 for the restoration of 

the VA Medical Center in Biloxi, Mississippi and to consolidate the 

services performed in Gulfport, Mississippi. The Committee has 

also predicated this authorization on the requirement that VA undertake this consolidation at Biloxi by constructing a joint-use facility with Keesler Air Force Base. 

New Orleans, Louisiana: The Secretary requested $675,000,000 

for the restoration, new construction or replacement of the medical 

center facility in New Orleans, Louisiana, that was damaged due 

to Hurricane Katrina. Section 3 of the bill, as amended, would only 

authorize advance planning and design and site preparation for a 

co-located, joint-use medical facility in an amount not to exceed 

$100,000,000. In addition to the $75,000,000 provided for advance 

planning and design in Public Law 109–148, the Administration requested $600,000,000. Public Law 109–234 provided $550,000,000, 

subject to authorization, of the requested $600,000,000. VA and 

Louisiana State University (LSU) Health Care Services Division 

signed a Memorandum of Understanding on February 23, 2006, to 

establish a mutually beneficial relationship and to foster discussions addressing the basic framework for a future VA and LSU 

medical care delivery collaboration project. A joint Collaborative 

Opportunities Study Group (COSG) was formed in order to carry 

out that task. The COSG, comprised of experts from both organizations, was directed to develop options for shared facilities and/or 

services that take into account quality, access, practicality and efficiency; to review related information management systems and logistics; and to coordinate related communication. The four-month 

study culminated with the New Orleans COSG Report issued on 

June 12, 2006 with the recommendation for the construction of essentially two hospitals, a tower built and operated by VA, and another tower built and operated by LSU. The two towers would be 

joined by a corridor that would contain space for shared clinical 

services, capital equipment and lab services. The June report projected cost avoidances of nearly $400 million over the next 30 

years. Plans for the VA facility are still being developed and the 

level of collaboration between VA and LSU is yet to be determined. 

Therefore, the Committee has limited the authorization to advance 

planning and design and site preparation for a co-located, joint-use 

medical facility in or near New Orleans, assuming that the Department and LSU can adequately resolve outstanding operational 

issues. As a result of the Committee’s limitation, the Department 

will be required to seek additional, specific authorization for the 


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construction of a facility in or around New Orleans, consistent with 

38 U.S.C. § 8104(a)(2). 

The Committee supports the furtherance of the collaborative investigation in New Orleans and the restoration of a strong VA 

presence in and around New Orleans. The Committee is reluctant 

to force the VA into a position of collaboration if the potential relationship with LSU: (1) becomes too costly for the Department (requiring additional VA resources above levels identified under the 

various models contained in the COSG report); (2) limits the economies of scale that can be realized to a degree that collaboration no 

longer makes financial sense; or (3) threatens to degrade the quality of care provided to veterans in the region. 

Charleston, South Carolina: In Charleston, South Carolina, the 

Ralph H. Johnson VA Medical Center (VAMC) and the Medical 

University of South Carolina (MUSC) Hospital reside in very close 

physical proximity and currently have a strong collaborative relationship with the sharing of medical staff and research activities. 

Some 243 physicians who hold faculty appointments at MUSC now 

treat veteran patients at the Charleston VAMC, representing over 

95 percent of the VAMC’s physician staff. The annual amount of 

clinical sharing between VA and MUSC amounted to approximately $14,000,000 in 2005. Both facilities also share some similar 

infrastructure challenges including aging facilities, limited ingress 

and egress and shortages of parking. MUSC is currently undertaking a five-phase hospital replacement project that will increase 

inpatient capacity from the current 600 beds to 800 beds. In the 

fall of 2004, MUSC secured $401 million in mortgage bonds insured 

by the Department of Housing and Urban Development (HUD) 

Federal Housing Administration. These HUD backed bonds provide 

the resources needed by MUSC for the project. On April 8, 2005, 

MUSC formally broke ground on Phase 1, the construction of a new 

$276 million hospital. The new 156-bed hospital is expected to open 

in early 2008. 

On August 18, 2005, VA and MUSC signed a Memorandum of 

Record, creating an ad hoc Collaborative Opportunities Steering 

Group (COSG), to develop options for new shared facilities and resources. Based on the final report, two options stand out as the 

most viable, model A and model A–1. Model A would replace all 

clinical services in the existing VA facility with construction of a 

new VAMC as part of the next phase of MUSC local construction. 

Additional inpatient capacity would be built in order to accommodate additional beds needed by MUSC. Bed space would be leased 

by MUSC and the VA would use the revenue to enhance patient 

care at the new facility, while maintaining the right of first refusal 

for veterans in the event of a surge in demand or national emergency. 

Model A–1 is a sub-option of Model A that would necessitate 

MUSC funding its own adjacent bed tower, while still sharing clinical services and the expense of high-cost capital medical equipment. Lease revenue would be limited under this model because 

MUSC would build its own bed capacity, but the initial federal outlay would also be diminished. The COSG process established in 

Charleston, SC provided a sound blueprint for collaboration with 

MUSC. However, there are still outstanding issues that need to be 

resolved. 


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On July 13, 2006, a second Memorandum was issued establishing 

an ad hoc Collaborative Opportunities Planning Group (COPG) to 

fully develop a viable venture that will create synergy in the delivery of health care for veterans in this region. Section 4 of the bill, 

as amended, would limit the authorization to $70,000,000 for the 

advance planning and design for a co-located, joint-use medical facility incorporating the findings of the COPG. As a result of the 

Committee’s limitation, the Department will be required to seek 

additional, specific authorization for the construction of a facility in 

Charleston, consistent with 38 U.S.C. § 8104(a)(2). 

Denver, Colorado: The Department requested $621,000,000 for 

the replacement of the VAMC in Denver, Colorado. On May 20, 

2004, the Capital Asset Realignment for Enhanced Services 

(CARES) decision document provided notice to Congress of the Secretary’s decision to build a replacement VAMC through a sharing 

agreement with the Department of Defense (DOD). The facility was 

to be located on the Fitzsimons campus of the University of Colorado and include some shared facilities with the University of Colorado Hospital. However, to the Committee’s disappointment, the 

joint nature of this project has since been lost. The VA now intends 

to erect a freestanding medical center on the Fitzsimmons campus. 

Section 5 of the bill, as amended, would limit the authorization 

in the amount of $98,000,000 for VA to purchase a site for the replacement of the Denver VAMC and require VA to report to the 

Committee identifying and outlining the various options available 

to the Department for the replacement of the facility. The Committee encourages VA to consider financing relationships that may 

be seen as unique to the Department, but that may also require 

significantly diminished up-front capital outlay by the Department. 

Furthermore, the Committee would encourage working with other 

federal, state, local or not-for-profit entities to develop a suitable financing model that could be exported to other facilities requiring 

replacement throughout the Department. The Committee expects 

that any financing options be consistent with the goal of improving 

veteran access to the highest quality medical care. 

Extension of Authorizations: The Secretary requested the extension of authorization for 18 major medical facility construction 

projects previously authorized in previously authorized under Public Law 108–170, but for which it is unlikely that contract awards 

will be accomplished by September 30, 2006, as required by that 

law. Section 6 of the bill, as amended, authorizes 17 of these major 

medical facility construction projects that were identified and 

prioritized under the CARES process. Two of the projects are for 

the construction of new medical centers in Las Vegas, Nevada and 

Orlando, Florida. In January, 2006, VA released a list of potential 

sites for the Orlando facility. One of the sites, site selection C, at 

Lake Nona is of particular interest to the Committee because this 

site would be part of a developing medical park. As currently envisioned, the development would consist of a 200 acre mixed-use, academic, and medical and research campus containing the University 

of Central Florida (UCF) Science and Research Park, Healthcare 

Campus and newly proposed medical college. The bill would require 

VA to select the Lake Nona site for construction of the facility. The 

Lake Nona site has the distinct advantage of providing VA the 

means to partner with the new medical school at UCF to share faVerDate Aug 31 2005 02:56 Sep 12, 2006 Jkt 049006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 E:\HR\OC\HR643.XXX HR643

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cilities and personnel. The Committee believes that collaboration 

between VA and its medical affiliations benefits veterans and the 

country by providing additional resources for innovative and cutting edge technologies and enhanced access and quality of care. 

Major Medical Facility Leases: Section 7 of the bill, as amended, 

would authorize the three major medical facility leases requested 

for outpatient clinics for FY 2006 in Baltimore, Maryland; Evansville, Indiana, and Smith County, Texas and appropriations of 

$24,990,000 to support them. Section 8 of the bill, as amended, 

would authorize the requested major medical facility leases for FY 

2007 in Austin, Texas; Lowell, Massachusetts; Grand Rapids, 

Michigan; Las Vegas, Nevada (up to four Outpatient Clinics); and 

Parma, Ohio and would appropriate $26,642,000 to support them. 

San Juan, Puerto Rico: The San Juan VAMC is a 319 acute care 

bed facility with documented condition deficiencies. Deficiencies in 

the aging structure include: (1) insufficient space; (2) lack of patient privacy (especially for female veterans); (3) issues relating to 

access for those with disabilities; (4) significant parking problems; 

(5) seismic vulnerabilities; (5) asbestos abatement requirements 

that are time consuming, expensive, and challenging; (6) aging air 

conditioning and ventilation systems; and (7) inadequate water 

storage capabilities. In October 2002, a decision was made to develop a 2-phased strategy: Phase 1—a new bed tower with 314 beds 

in 6 floors; Phase 2—seismically correct main building with renovations that would include asbestos abatement, sprinklers, and utility 

improvements. On April 14, 2006, an $84,050,000 construction contract was awarded to Heery International/PMC for Phase 1 (the 

South Bed Tower). The building is expected to be completed in May 

2009. The existing facility space is approximately 630,845 departmental gross square feet (DGSF). The proposed new bed tower 

would provide an additional 250,000 DGSF. However, the CARES 

process determined that San Juan, based on current and projected 

workload requires 1,283,547 DGSF. The current two-phase plan 

still falls short of the requirements identified under CARES by 

nearly 402,702 DGSF. Given the documented substantial facility 

deficiencies, the Committee is concerned about funding expensive 

renovations in San Juan that will ultimately fail to meet capacity 

needed to handle the projected workload. 

Section 9 of the bill, as amended, expresses the sense of Congress 

that VA should take steps to explore all options for addressing that 

concerns regarding future capacity and would require the VA to report to the Committees of Veterans’ Affairs outlining the various 

financing options available, including engaging federal, state, local 

or not-for-profit entities to develop suitable financing models that 

would minimize the up-front capital outlay required by the Department. 

Director, Construction and Facilities Management: The Committee is concerned that the VA has not built a major medical facility in over a decade and the Department lacks the consolidated authority and institutional expertise to oversee the management of 

major construction and leasing programs and administration activities for the Department. Consistent with the recommendations contained in the Secretary’s Construction Advisory Board Committee 

Report, Section 11 of the bill, as amended, establishes a new career 

position with responsibility for construction and facilities manageVerDate Aug 31 2005 02:56 Sep 12, 2006 Jkt 049006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR643.XXX HR643

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ment across all segments of the Department. The position will provide direct support to the Secretary and will report to the Deputy 

Secretary of the Department. The individual’s responsibilities shall 

include installation planning, engineering and architecture, facility 

design and construction, lease administration and management, 

space planning and management, maintenance, repair and alterations, custodial, building management and administration, maintenance of roads and grounds, acquisition, property management, 

furnishings, and supplies and equipment. The individual selected 

for this position shall develop and update short and long range 

strategic capital investments strategies. 

The Committee is committed to reinstituting a sense of centralized, consolidated institutional knowledge within the Department 

in the areas of construction and project management for all major 

medical facilities and minor, local projects. By adding this position, 

the Committee is also attempting to ensure that significant 

prioritization of major medical projects is undertaken, that the future Departmental workload is understood and the infrastructure 

accurately supports the out-year health care demands of the veteran population. 

BUSINESS PLANS

Section 12 of the bill, as amended, requires the VA to submit a 

business plan for enhanced access to outpatient care for primary 

care, mental health care, and specialty care to the Committees on 

Veterans’ Affairs no later than 180 days after enactment. The business plan is to cover the Lewiston-Auburn area of Maine; the area 

of Houlton, Maine; the area of Dover-Foxcroft, Maine; and 

Whiteside County, Illinois. In exploring enhanced access, the VA is 

to include one or more of the following: new sites of care; expansions at existing sites of care; use of existing authority and policies 

to contract for care when necessary; and increased use of telemedicine. The committee urges the Department to consider naming any 

new or expanded facility in Whiteside County, Illinois after the 

ranking Member of the Committee, Honorable Lane Evans. 

SECTION-BY-SECTION ANALYSIS

Section 1(a) of the bill would name the Act the ‘‘Department of 

Veterans Affairs Medical Facility Authorization Act of 2006’’. 

Section 1(b) of the bill would provide the Table of Contents. 

Section 2(a) of the bill would authorize the Secretary of Veterans 

Affairs to carry out a major medical facility project for restoration 

of the Department of Veterans Affairs Medical Center (VAMC), Biloxi, Mississippi, and consolidation of services performed at the 

VAMC, Gulfport, Mississippi. 

Section 2(b) of the bill would prohibit appropriated funds for 

major medical facility projects listed in subsection (a) from exceeding $310,000,000. 

Section 2(c) of the bill would require the project authorized by 

subsection (a) to be carried out as part of a joint-use facility shared 

by VA with Keesler Air Force Base in Biloxi, Mississippi. 

Section 3(a) of the bill would authorize the Secretary to enter 

into an agreement with Louisiana State University to design, construct, and operate a co-located, joint-use medical facility to replace 


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the VAMC, New Orleans, Louisiana damaged by Hurricane 

Katrina in August 2005. Authority under this section would be restricted to advance planning and design and site preparation. 

Section 3(b) of the bill would restrict costs for the advance planning and design and site preparation for a co-located, joint use 

medical facility authorized under subsection (a) to an amount not 

to exceed $100,000,000. 

Section 4(a) of the bill would authorize the Secretary to enter 

into an agreement with the Medical University of South Carolina 

to design, construct, and operate a co-located joint-use medical facility in Charleston, South Carolina, to replace the Ralph H. Johnson VAMC, Charleston, South Carolina. Authority under this section is limited to advanced planning and design of the facility. 

Section 4(b) of the bill would limit costs for the advance planning 

and design for a co-located, joint use medical facility authorized 

under subsection (a) to an amount not to exceed $70,000,000. 

Section 5(a) of the bill would authorize the Secretary to enter 

into an agreement to purchase a site to replace the VAMC, Denver, 

Colorado, in an amount not to exceed $98,000,000. 

Section 5(b) of the bill would require the Secretary to submit a 

report no later than 180 days after date of enactment to the Committees on Veterans’ Affairs of the Senate and House of Representatives to identify and outline the various options available to VA 

for replacement of the current VAMC, Denver, Colorado. The report 

should include: (1) the feasibility of entering into a partnership 

with a Federal, State, or local governmental agency, or a suitable 

non-profit agency, for the construction and operation of a new medical facility; (2) the medical, legal, and financial implications of the 

identified options, including recommendations regarding any necessary statutory changes for the Department to carry out any of 

the identified options; (3) a detailed cost-benefit analysis of each 

identified option; and (4) estimates on the time frame and associated costs needed to complete a new facility under each of the identified options. 

Section 6 of the bill would extend authorization for the following 

major medical facility projects, requiring each project to be carried 

out in the amount specified for that project: (1) construction of an 

outpatient clinic and regional office at the VAMC, Anchorage, Alaska, in an amount not to exceed $75,270,000; (2) consolidation of 

clinical and administrative functions of the VAMC, Cleveland, 

Ohio, and the VAMC, Brecksville, Ohio, in an amount not to exceed 

$102,300,000; (3) construction of an extended care building at the 

VAMC, Des Moines, Iowa, in an amount not to exceed $25,000,000; 

(4) renovation of patient wards at the VAMC, Durham, North Carolina, in an amount not to exceed $9,100,000; (5) correction of patient privacy deficiencies at the VAMC, Gainesville, Florida, in an 

amount not to exceed $85,200,000; (6) modernization addition of 

the seventh and eighth floor wards at the VAMC, Indianapolis, Indiana, in an amount not to exceed $27,400,000; (7) construction of 

a new medical center facility at the VAMC, Las Vegas, Nevada, in 

an amount not to exceed $406,000,000; (8) construction of an ambulatory surgery/outpatient diagnostic support center in the Gulf 

South Submarket of VISN 8 and completion of Phase I land purchase, Lee County, Florida, in an amount not to exceed 

$65,100,000; (9) seismic corrections to buildings 7 and 126 at the 


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VAMC, Long Beach, California, in an amount not to exceed 

$107,845,000; (10) seismic corrections to buildings 500 and 501 at 

the VAMC, Los Angeles, California, in an amount not to exceed 

$79,000,000; (11) construction of a new medical center facility, Orlando, Florida, to be located in Lake Nona known as site selection 

C, directly south of the interchange between SR–417 and Lake 

Nona Boulevard, in an amount not to exceed $377,700,000; (12) 

consolidation of campuses at the University Drive and H. John 

Heinz III divisions, Pittsburgh, Pennsylvania, in an amount not to 

exceed $189,205,000; (13) upgrades and expansion to wards at the 

VAMC, San Antonio, Texas, in an amount not to exceed 

$19,100,000; (14) construction of a spinal cord injury center at the 

VAMC, Syracuse, New York, in an amount not to exceed 

$77,700,000; (15) upgrade of essential electrical distribution systems, at the VAMC, Tampa, Florida, in an amount not to exceed 

$49,000,000; (16) expansion of the spinal cord injury center addition at the VAMC, Tampa, Florida, in an amount not to exceed 

$7,100,000; and (17) blind rehabilitation and psychiatric bed renovation and new construction project at the VAMC, Temple, Texas, 

in an amount not to exceed $56,000,000. 

Section 7(a) of the bill would authorize the Secretary to carry out 

the following major medical facility leases in FY 2006 at the following locations, in an amount not to exceed the amount specified 

for that location: (1) outpatient clinic in Baltimore, Maryland, 

$10,908,000; (2) outpatient clinic in Evansville, Illinois, $8,989,000; 

and (3) outpatient clinic in Smith County, Texas, $5,093,000. 

Section 7(b) of the bill would authorize the Secretary to carry out 

the following major medical facility leases in FY 2007 at the following locations, in an amount not to exceed the amount specified 

for that location: (1) outpatient and specialty care clinic in Austin, 

Texas, $6,163,000; (2) outpatient clinic in Lowell, Massachusetts, 

$2,520,000; (3) outpatient clinic in Grand Rapids, Michigan, 

$4,409,000; (4) up to four outpatient clinics in Las Vegas, Nevada, 

$8,518,000; and (5) outpatient clinic in Parma, Ohio, $5,032,000. 

Section 8(a) of the bill would authorize appropriations to the Secretary for FY 2006 in the total amount of $578,000,000 for the Construction, Major Projects, account, of which: (1) $310,000,000 is for 

the Biloxi and Gulfport, Mississippi, projects authorized in section 

2; (2) $100,000,000 is for the advanced planning and design in New 

Orleans, Louisiana, authorized in section 3; (3) $70,000,000 is for 

the purchase of a site in Charleston, South Carolina, authorized in 

section 4; and (4) $98,000,000 is for the purchase of a site in. Denver, Colorado, authorized in section 5. 

Section 8(b) of the bill would authorize appropriations for major 

medical facility projects under the capital asset realignment initiative: (1) authorization of appropriations for FY 2007 for the Construction, Major Projects, account, $1,758,920,000 for the projects 

specified in section 5; and (2) amounts appropriated in accordance 

with the authorization in paragraph (1) would remain available 

until September 30, 2009. 

Section 8(c) of the bill would authorize appropriations for major 

medical facility leases: (1) authorization for appropriations for FY 

2006 for the Medical Care account, $24,990,000 for the leases authorized in section 6(a), Baltimore, Maryland; Evansville, Illinois; 

and Smith County, Texas; and (2) authorization for appropriations 


bajohnson on PROD1PC77 with REPORTS
13 

for FY 2007 for the Medical Care account, $26,642,000 for the 

leases authorized in section 6(b), Austin, Texas; Lowell, Massachusetts; Grand Rapids, Michigan; Las Vegas, Nevada; and Parma, 

Ohio. 

Section 8(d) of the bill would require the projects authorized in 

sections 2, 3, 4, and 5 to be only carried out using only: (1) funds 

appropriated for FY 2006 or 2007 pursuant to the authorization of 

appropriations in subsections (a), (b), and (c) of section 7; (2) funds 

available for Construction, Major Projects, for a fiscal year before 

FY 2006 that remain available for obligation; (3) funds available 

for Construction, Major Projects, for a fiscal year after FY 2006 or 

2007 that are available for obligation; and (4) funds appropriated 

for Construction, Major Projects, for FY 2006 or 2007 for a category 

of activity not specific to a particular project. 

Section 9(a) of the bill would recognize the need for medical facility improvements that are not currently being adequately addressed in San Juan, Puerto Rico and the sense of Congress that 

the Secretary should take steps to explore all options to address 

the concern, including a possible public or suitable non-profit partnership to build and operate a facility to replace the current VA 

medical center in San Juan, Puerto Rico. 

Section 9(b) of the bill would require the Secretary to submit a 

report, no later than 180 days after date of enactment, to the Committees on Veterans’ Affairs of the Senate and House of Representatives on the feasibility of entering into a public or suitable nonprofit partnership for the construction and operation of a replacement facility for the current VA medical center in San Juan, Puerto Rico. The report should include the following: (1) the feasibility 

of entering into a partnership with a Federal, State, or local governmental agency, or a suitable non-profit agency, for the construction and operation of a new medical facility; (2) the medical, legal, 

and financial implications of the identified options, including recommendations regarding any necessary statutory changes for the 

Department to carry out any of the identified options; (3) a detailed 

cost-benefit analysis of each identified option; and (4) estimates on 

the time frame and associated costs needed to complete a new facility under each of the identified options. 

Section 10(a) of the bill would authorize the Secretary to transfer 

to the city of Fort Thomas, Kentucky, all right, title, and interest 

of the United States in and to a piece of real property, including 

the 15 structures located on the property, consisting of approximately 11.75 acres that is managed by the Department and located 

in northeast Tower Park in Fort Thomas. The transfer would be 

subject to existing rights, easements, and rights-of-way. 

Section 10(b) of the bill would require the city of Fort Thomas, 

Kentucky, to pay an amount equal to the fair market value of the 

transferred real property to the United States, to be determined by 

the Secretary, as consideration for the land transfer under subsection (a). 

Section 10(c) of the bill would authorize the Secretary, at his discretion, to deposit the payment received under subsection (b) in the 

‘‘Medical facilities’’ account or the ‘‘Construction, minor projects account’’ to be available, without limitation: (1) to cover costs incurred by the Secretary due to environmental remediation of the 

property before transfer under subsection (a); and (2) to cover, with 


bajohnson on PROD1PC77 with REPORTS
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any remaining funds, costs required under paragraph (1), for acquisition of a site for use as a parking facility, or contract (by lease 

or otherwise) for a parking facility operation to be used at the 

VAMC in Cincinnati, Ohio. 

Section 10(d) of the bill would release the United States from 

being liable for damages due to negligence by the U.S. or any employee or agent of the U.S. before the date of conveyance, consistent with chapter 171 of Title 28, United States Code. 

Section 10(e) of the bill would that (1) the city of Fort Thomas, 

Kentucky, cover any costs incurred by the Secretary, or to reimburse the Secretary for such costs, to carry out the conveyance 

under subsection (a), including costs related to surveys, environmental documentation, and other related administrative costs. The 

Secretary would be required to refund any excess amount if the 

amounts are collected from the city of Fort Thomas, Kentucky, before the Secretary incurred any actual costs and the collected 

amount exceeds the actual cost incurred by the Secretary to carry 

out the conveyance; and (2) amounts received as reimbursement 

under paragraph (1) would be credited to the fund or account used 

for the costs incurred. Credited amounts would be merged with 

other amounts in the fund or account and would be available for 

the same purposes, and subject to the same conditions and limitations. 

Section 10(f) of the bill would require the exact acreage and legal 

description of the conveyed real property under subsection (a) be 

determined by a survey satisfactory to the Secretary. 

Section 10(g) of the bill would authorize the Secretary to require 

any additional terms and related conditions with the conveyance 

under subsection (a) as the Secretary believes necessary to protect 

the interests of the U.S. 

Section 11(a) of the bill would amend Chapter 3 of title 38, 

United States Code, to add a new section 312A after section 312. 

New Section 312A(a) would create a new career position, Director, Construction and Facilities Management, with responsibility 

for managing construction and facilities across the Department, including all major and minor construction projects. The individual 

is to be appointed by the Secretary and provide direct support to 

the Secretary while reporting to the Deputy Secretary of the Department. 

New Section 312A(b) would require the individual appointed as 

Director, Construction and Facilities Management, to: (1) hold an 

undergraduate or master’s degree in architectural design or engineering; and (2) have substantive professional experience with construction project management. 

New Section 312A(c) would require the individual appointed as 

Director, Construction and Facilities Management, to be responsible for overseeing and managing the planning, design, construction, and facilities operation (including infrastructure) of VA’s 

major and minor construction projects and perform other duties requested by the Secretary. Oversight and management responsibilities would include all of the following: (1) developing and updating 

short and long-range strategic capital investment strategies and 

plans; (2) planning, designing, and building facilities, determining 

architectural and engineering requirements, as well as ensuring 

compliance with all laws relating to VA’s construction program; (3) 


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overseeing and managing the construction of VA facilities; (4) managing VA’s short and long-term leasing activity; (5) repairing and 

maintaining VA’s facilities, including custodial services, building 

management and administration, and roads, grounds, and infrastructure maintenance; and (6) managing the procurement and acquisition process, including the award of contracts related to design, construction, furnishing, and supplies and equipment. 

Section 11(b) of the bill would amend the table of sections at the 

beginning of chapter 3 by inserting ‘‘312A. Director, Construction 

and Facilities Management’’ after section 312. 

Section 12(a) of the bill would require the Secretary to submit to 

the Committees on Veterans’ Affairs of the Senate and House of 

Representatives, no later than 180 days after enactment of this 

Act, a business plan for enhanced access to outpatient care (described in subsection (b)) for primary care, mental health care, and 

specialty care in each of the following areas: (1) the Lewiston-Auburn area of Maine; (2) the area of Houton, Maine; (3) the area of 

Dover-Foxcroft, Maine; and (4) Whiteside County, Illinois. 

Section 12(b) of the bill would enhance access to outpatient care 

to be covered by the business section under subsection (a), with respect to each area specified, one or more of the following: (1) new 

sites of care; (2) expansions at existing sites of care; (3) use of existing authority and policies to contract for care where necessary; and 

(4) increased use of telemedicine. 

Section 13 of the bill would require a report, not later than 180 

days after date of enactment of this Act, be submitted from the 

Secretary to the Committees on Veterans’ Affairs of the Senate and 

House of Representatives identifying and outlining various options 

available to VA regarding the placement of a VAMC in Okaloosa 

County, Florida. The report should include: (1) the feasibility of entering into a partnership with Eglin Air Force Base for the construction and operation of a new, joint VA–DOD facility; (2) the 

medical, legal, and financial implications of each of the options 

identified, including recommendations on any statutory changes 

needed for VA to carry out the any of the identified options; (3) a 

detailed cost-benefit analysis for each identified option; and (4) estimates on the length of time and associated costs needed to complete such a facility under each identified option. 

PERFORMANCE GOALS AND OBJECTIVES

STATEMENT OF THE VIEWS OF THE ADMINISTRATION 

STATEMENT OF THE HONORABLE JONATHAN B. PERLIN, MD, 

UNDER SECRETARY FOR HEALTH

Mr. Chairman and members of the Committee, good 

afternoon. I am pleased to appear here this afternoon to 

provide you with an overview of the Department of Veterans Affairs’ (VA) construction program and 5 Year Capital Plan. I will also provide information on VA’s portfolio 

management approach and how the Capital Asset Realignment for Enhanced Services (CARES) process and the Enhanced-Use Leasing program play an integral role in the 

management of VA’s portfolio. 


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VA has a vast holding of diverse capital assets consisting 

of buildings and real estate, VA-leased buildings, enhanced-use leases, and infrastructure. Assets include hospitals, clinics, cemeteries, and office buildings. Many of 

these facilities currently are used, managed, and maintained in relation to and for promotion of the respective activities of VA’s Veterans Health Administration (VHA), 

Veterans Benefits Administration (VBA), National Cemetery Administration (NCA), and Staff Offices (General Administration). At the close of FY 2005, VA held 1,053 operating leases, and owned 5,306 buildings and 32,527 acres 

of land. Various construction programs are used to fund infrastructure for the Department. Operating dollars fund 

lease requirements and maintenance projects. The major 

construction program provides for constructing, altering, 

and improving any VA facility with a total project cost 

over $7 million and the minor construction program funds 

construction activities under $7 million. Two grant programs are also utilized for building or improving state veterans cemeteries and state nursing homes and domiciliary 

facilities. 

The VA FY 2007 budget request includes $714 million in capital funding. Our request includes $399 million for 

major construction projects, $198 million for minor construction, $85 million in grants for the construction of 

state extended care facilities, and $32 million in grants for 

the construction of state veterans cemeteries. 

The 2007 request for construction funding for our med- ical facilities is $457 million—$307 million for major con- struction and $150 million for minor construction. These 

resources will be devoted to implementing projects identified in the Capital Asset Realignment for Enhanced Services (CARES) program. The projects will renovate and 

modernize VA’s health care infrastructure and provide 

greater access to high-quality care for veterans. VA also 

received funds enacted in the Hurricane Katrina emergency supplemental funding in late December 2005: $293 

million to fund a CARES project for a new hospital in Biloxi, Mississippi: and $75 million for planning and design 

for the restoration/replacement of the medical center facility in New Orleans, Louisiana. To date, including the FY 

2007 budget request, VA will have received in excess of $3 

billion to implement CARES. In addition, VA currently has 

an emergency supplemental request for $600 million before 

the Congress for the construction funding of the restoration/replacement of the medical center facility in New Orleans. 

Our FY 2007 major construction request for health care 

will fund the continued development of two medical facility 

projects—$97.5 million to address seismic corrections in 

Long Beach (California); and $52.0 million to continue the 

work necessary to prepare for construction of a new medical center facility in Denver (Colorado). In addition, our 

request for major construction funding includes $38.2 million to construct a new nursing home care unit and new 


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dietetics space, as well as to improve patient and staff 

safety by correcting seismic, fire, and life safety deficiencies at American Lake (Washington); $32.5 million for 

a new spinal cord injury center at Milwaukee (Wisconsin); 

$25.8 million to replace the operating room suite at Columbia (Missouri); and $7.0 million to design improvements through renovation and new construction to reduce 

underutilized vacant space located at the Jefferson Barracks Division campus at St. Louis (Missouri) as well as 

provide land for expansion at the Jefferson Barracks National Cemetery. We also requested $53.4 million in major construction funding and $25.0 million in minor construction resources 

to support our burial program. This includes funds for 

cemetery expansion and improvement at Great Lakes, 

Michigan ($16.9 million), Dallas/Ft. Worth, Texas ($13.0 

million), and Gerald B. H. Solomon, Saratoga, New York 

($7.6 million). Our request will also provide $2.3 million in 

design funds to develop construction documents for 

gravesite expansion projects at Abraham Lincoln National 

Cemetery (Illinois) and at Quantico National Cemetery 

(Virginia). In addition, the major construction request includes $12 million for the development of master plans and 

the initial design for six new national cemeteries in areas 

directed by the National Cemetery Expansion Act of 

2003—Bakersfield, California; Birmingham, Alabama; Columbia-Greenville, South Carolina; Jacksonville, Florida; 

Sarasota County, Florida; and southeastern Pennsylvania. 

CARES

Former Secretary Anthony Principi formed the Capital 

Asset Realignment for Enhanced Services (CARES) Commission to conduct a ‘‘comprehensive, system-wide approach, identifying the demand for VA care and projecting 

into the future the appropriate function, size, and location 

for VA facilities.’’ The CARES Commission submitted findings and recommendations in February of 2004, and on 

May 7, 2004, the Secretary released his CARES Decision 

based on the Commission’s findings and recommendations 

for each CARES site. This CARES decision became VA’s 

roadmap into the future. 

Since that time, much has been done to move these infrastructure improvements forward. Architectural and engineering firms have been retained to prepare designs and 

12 construction contracts have been awarded and are underway. An additional 12 construction contracts are 

planned to be awarded by the end of this Fiscal Year. 

These projects bring needed improvements for veterans at 

these locations. 

Public Law 108–170 provided the Secretary with interim 

authority to proceed with CARES approved projects subject to a 45-day notice to the Committees. This legislation 

was used to provide authorization for the first 30 CARES 

projects. The legislation will sunset on September 30, 

2006. Fourteen projects authorized under this public law 


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are not likely to award construction contracts by September 30 and four additional projects which will have 

construction underway will have second phases of construction that will begin later. Therefore, the Department 

has requested an extension of that authority until September 30, 2009 in the FY 2007 Budget, 5 Year Capital 

Plan, and the Omnibus 2006–2007 Construction Authorization Bill. Also in need of authorization are three 

projects: Biloxi, Mississippi; Denver, Colorado; and New 

Orleans, Louisiana, for which the Department has identified as an immediate need in FY 2006. A request for authorization for medical facility leases for FY 2006 and FY 

2007 construction projects and medical facility leases are 

also included in the budget request, capital plan, and authorization bill, which was transmitted to Congress on 

April 5, 2006. In total, VA is requesting authorization of 

$3.7 billion for major medical facility projects and $51.6 

million for major medical facility leases. 

5 YEAR CAPITAL PLAN

The Department’s 5 Year Capital Plan is the ultimate 

product of VA’s capital investment process, which reflects 

trade-offs between funding the operational expenses for existing assets and the acquisition of new assets by the most 

cost-effective and beneficial means. The VA capital plan includes the highest priority capital investments that were 

vetted through a comprehensive Department-wide capital 

investment process to ensure the assets fully support the 

mission, vision, and goals of the agency. The plan outlines 

VA’s implementation of the CARES decisions. The plan 

also includes descriptions of other initiatives and capital 

asset management tools that VA is utilizing to better manage its large capital portfolio. 

For FY 2007 the capital plan is published together with 

the Department’s construction budget. Combining the two 

documents provides a comprehensive view of the VA construction budget for 2007 and plans for the future. 

ENHANCED-USE LEASING

VA utilizes a capital asset management tool called ‘‘enhanced-use leasing’’ (EU leasing) to better manage its vacant and underutilized real property assets. The authority 

was initially authorized in 1991, is codified at 38 U.S.C. 

§§ 8161–8169, and currently is set to expire on December 

31, 2011. It permits VA to lease Department-controlled 

real property to private or other public entities for a term 

not-to-exceed 75 years. Each lease must be in exchange for 

‘‘fair consideration’’ as determined by the Secretary. Such 

consideration may consist of monetary, and/or ‘‘in-kind’’ consideration including construction, repair, remodeling, 

improvements, or maintenance services for Department facilities, or the provision of office, storage, or other usable 

space. 

The EU leasing program has enabled VA to leverage its 

diverse, underutilized real estate portfolio to generate sigVerDate Aug 31 2005 02:56 Sep 12, 2006 Jkt 049006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6969 E:\HR\OC\HR643.XXX HR643

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nificant revenues. Such revenues are redirected towards 

the healthcare and capital operations of our medical centers, which serve our nation’s veterans daily. It also has 

resulted in several privately-financed, developed, and operated facilities which provide valuable, mission-compatible 

services to the Department and eligible veterans, non-veterans, and VA employees. Such facilities and services have 

included co-generation energy services, office facilities, 

parking facilities, hospice care, mental health, single-room 

occupancy (homeless shelters), affordable housing, transitional housing, low-cost senior housing, and child daycare 

services. Notably, VA’s varied EU leases also have resulted 

in a substantial short- and long-term stimulus for the impacted local, state, and federal governments and economies, due to tax revenues, sales, and job creation. 

In FY 2005, through its EU lease program, VA received over $900,000 worth of in-kind consideration, and 

$28,000,000 via a single payment of monetary consideration. The EU Leasing program is a proven method of 

leveraging VA’s diverse real estate portfolio and market 

position. 

VA’S PORTFOLIO MANAGEMENT APPROACH

VA utilizes a three-tiered portfolio management approach. This approach is the blueprint for VA portfolio 

management nationwide. 

First, VA manages what we have more effectively 

through Federal Real Property Council (FRPC) performance standards as well as using unique technology-assisted 

inventory management system. VA is committed to four 

metrics that set the goals for performance. They include: 

(1) the percent of space utilization as compared to overall 

space (owned and direct leased); (2) the percent condition 

index (owned buildings); (3) the ratio of non-mission-dependent assets to total assets; and (4) the ratio of operating 

costs per gross square foot (GSF) adjusting for inflation. 

These goals are based on the FRPC standards for performance measurement in capital portfolio management. 

VA is striving to utilize information technology and established capital asset management principles to improve 

the management of its capital resources. VA created the 

Capital Asset Management System (CAMS), an integrated, 

Department-wide system, enabling VA to analyze, monitor, 

and manage VA’s portfolio of capital assets. Data are organized and presented to strategically monitor performance 

against capital asset goals within and across asset types 

and VA Administrations (VHA, VBA, and NCA). 

Secondly, VA selects prudent capital investments 

through appropriated dollars. VA uses appropriated dollars 

to manage CARES capital investment projects that have 

proven to be sound investments. Each project’s performance is measured to ensure the best use of our overall 

portfolio needs. This innovative approach has allowed VA 

to manage underutilized assets in a more efficient and 

cost-effective manner. 


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VA’s third approach is the use of its enhanced-use leasing authority, which has been previously mentioned. Over 

the past 14 years VA has awarded 47 projects through the 

enhanced-use leasing authority. An additional 100 initiatives are being studied, of which 45 projects are currently 

active. 

CLOSING

In summary, Mr. Chairman, the $714 million that VA is requesting in FY 2007, in addition to the $293 million provided in the Hurricane Katrina emergency supplemental, 

will provide the resources necessary for the Department to: • Continue implementation of the infrastructure improvements identified in CARES to insure that facilities 

are available to support the provision of timely, high-quality health care to nearly 5.3 million patients. It is important to note that 79 percent are among those who need VA 

the most—those with service-connected disabilities, lower 

incomes, or special health care needs; • Increase access to our burial program by ensuring that 

nearly 84 percent of veterans will be served by a burial option in a national or state veterans cemetery within 75 

miles of their residence; and • Provide safe and secure facilities for the Department 

built to current specifications to withstand natural and 

manmade disasters. 

I look forward to working with the members of this committee to continue the Department’s tradition of providing 

timely, high-quality benefits and services to those who 

have helped defend and preserve freedom round the world. 

I would be pleased to answer any questions the committee 

may have. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, August 30, 2006. 

Hon. STEVE BUYER, 

Chairman, Committee on Veterans’ Affairs, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 5815, the Department of 

Veterans Affairs Medical Facility Authorization Act of 2006. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Michelle S. Patterson. 

Sincerely, 

ROBERT P. MURPHY

(For Donald B. Marron, Acting Director). 

Enclosure. 

H.R. 5815—Department of Veterans Affairs Medical Facility Authorization Act of 2006 

Summary: H.R. 5815 would authorize funding for the construction, renovation, improvement or leasing of over two dozen medical 


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21 

facilities by the Department of Veterans Affairs (VA). The bill 

would specifically authorize the appropriation of $578 million for 

four projects in 2006, $1.76 billion for 18 projects in 2007, and $52 

million for the leasing of eight clinics in 2006 and 2007. It would 

also authorize VA to sell a certain property to the city of Fort 

Thomas, Kentucky. CBO estimates that implementing H.R. 5815 would cost $114 million in 2007 and about $2.4 billion over the 2007–2011 period, 

assuming appropriation of the necessary amounts. (We estimate no 

additional spending in fiscal year 2006 since the year is nearly 

completed. Most of the 2006 funding authorized by H.R. 5815 has 

already been appropriated.) CBO estimates that enacting the bill 

would also affect direct spending in 2007, but that the changes 

would have no net effect. 

H.R. 5815 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Louisiana State University would benefit from the authorization of 

a joint project with the VA, and the city of Fort Thomas, Kentucky, 

would benefit from the conveyance of land. Any costs to those entities would be incurred as a condition of participating in voluntary 

federal activities. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 5815 is show in the table below. This estimate 

assumes the legislation will be enacted near the end of fiscal year 

2006, that the necessary funds for implementing the bill will be 

provided each year, and that outlays will follow historical spending 

patterns for existing or similar programs. The costs of this legislation fall within budget function 700 (veterans benefits and services) 

and 800 (general government). 

By fiscal year, in millions of dollars— 

2006 2007 2008 2009 2010 2011 

SPENDING SUBJECT TO APPROPRIATION 1

Spending under current law for major construction of 

veterans medical facilities: 

Budget authority ...................................................... 1,583 0 0 0 0 0 

Estimated outlays .................................................... 167 412 504 499 273 128 

Proposed changes: 

Major medical facility projects: 

Estimated authorization level ........................ 168 1,770 476 0 0 0 

Estimated outlays ........................................... 0 114 544 736 607 292 

Leases for medical facilities: 

Estimated authorization level ........................ 0 52 20 20 20 20 

Estimated outlays ........................................... 0 0 0 46 23 20 

Total changes: 

Estimated authorization level ............... 168 1,822 496 20 20 20 

Estimated outlays .................................. 0 114 544 782 630 312 

Spending under H.R. 5815: 

Estimated authorization level ................................. 1,751 1,822 496 20 20 20 

Estimated outlays .................................................... 167 526 1,048 1,281 903 440 

1 H.R. 5815 also would affect direct spending, but the changes would have no net effect. 

Basis of estimate: H.R. 5815 contains provisions that would authorize appropriations for major construction and the leasing of 

medical facilities by VA. It also would require VA to prepare several reports addressing specific construction issues. In addition, it 

also would authorize the sale of VA property to a local government. 


bajohnson on PROD1PC77 with REPORTS
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Spending subject to appropriation 

CBO estimates that implementing H.R. 5815 would cost $114 million in 2007 and about $2.4 billion over the 2007–2011 period, 

assuming appropriation of the necessary amounts (see the table 

above). 

Major Medical Facility Projects. Sections 2 through 6 would authorize work on a number of medical facility projects. CBO estimates that implementing these five sections would cost $114 million in 2007 and about $2.3 billion over the 2007–2011 period, assuming appropriation of the necessary amounts. 

Section 6 would authorize the construction, renovation, repairs 

and upgrades of 17 medical facilities across the county. Projects 

range from the construction of a new medical center facility in Las 

Vegas to the expansion of the Spinal Cord Injury Center in Tampa. 

The bill would authorize $1.76 billion in 2007 for these projects. 

Sections 2 and 3 would authorize for 2006 the restoration or replacement of two medical centers damaged by Hurricane Katrina, 

for which most of the necessary funding has already been appropriated. Public Law 109–148 provided almost $293 million for the 

restoration of the Biloxi, Mississippi, medical center, and Public 

Law 109–234 provided almost $36 million for the cleanup of this 

center (along with another nearby medical facility). Based on VA’s 

current estimate of the total costs of $310 million, CBO estimates 

no more funds would need to be appropriated to restore the Biloxi 

medical center. 

Public Law 109–148 provided $75 million for the planning of a 

replacement facility in New Orleans, and Public Law 109–234 pro- vided $550 million for construction of this project. Based on VA’s 

current estimate of the total construction costs of $636 million, 

CBO estimates that the bill would authorize the appropriation of 

an additional $11 million for the New Orleans medical center. 

(That amount is included in the estimated authorization level for 

2007 in the table above.) 

Section 5 would authorize the appropriation of funds to be used 

for the purchase of land for a new medical center in Denver. In 

2004, $30 million was appropriated for this project, and H.R. 5815 

would authorize an additional $98 million for 2006, much of which 

would be used to acquire the necessary land. 

Section 4 would authorize the Secretary of VA to enter into an 

agreement with the Medical University of South Carolina to design, construct, and operate a medical facility in Charleston to replace the existing VA medical center. The bill would specifically authorize $70 million in 2006 for the planning of this facility. A December 2005 report from a working group that studied the feasibility of this joint venture advised that the construction model 

which would optimize the benefits for each party could cost $546 

million to design and build. Because this construction project was 

not listed as one of VA’s priorities in the 2007 budget request, CBO 

assumes that building this facility would not begin until 2008. 

Leases for Medical Facilities. Section 7 would authorize the Secretary of VA to lease facilities for eight outpatient clinics. VA reports that there would be no spending for any of these leases until 

2009 because all of the facilities would have to undergo improvements that would allow them to be used as clinics. For all eight 

clinics, the bill would authorize the appropriation of $52 million to 


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make lump-sum payments for the cost of modifications along with 

the first year’s rent when construction is complete. (That amount 

is included in the estimated authorization level for 2007 in the 

table above.) 

Though the bill only authorizes payments for the first year, CBO 

assumes that VA would enter into 20-year agreements at an estimated cost of about $20 million a year. Thus, CBO estimates that 

implementing this section would cost $46 million in 2009 and $90 

million over the 2009–2011 period, assuming appropriation of the 

necessary amounts. 

Other Provisions. The following provisions would have an insignificant budgetary impact on discretionary spending: • Sections 9 and 13 would require VA to prepare reports on the 

options and costs for the construction of two new medical facilities. • Section 11 would create a new position in VA to oversee construction projects and facilities management. • Section 12 would require VA to prepare a business plan for improved access to care in four specific areas of the country. 

Direct spending 

Section 10 would authorize VA to retain and spend the funds received from the sale of specified land and buildings to the city of 

Fort Thomas, Kentucky. Based on information from VA, CBO expects that, under H.R. 5815, VA would sell that property for about 

$3 million. CBO believes that VA would not sell the property without the authorization to retain the funds, which is not allowed 

under current law. Since the proceeds from the sale would be 

spent, however, there would be no net effect on direct spending. 

Intergovernmental and private-sector impact: H.R. 5815 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. 

Previous CBO estimate: On August 3, 2006, CBO transmitted a 

cost estimate for S. 3421, a bill to authorize major medical facility 

projects and major medical facility leases for the Department of 

Veterans Affairs for fiscal years 2006 and 2007, and for other purposes, as ordered reported by the Senate Committee on Veterans’

Affairs on June 22, 2006. Many of the provisions in H.R. 5815 are 

similar or identical to provisions in S. 3421, and would have similar or identical costs. The differences in estimated costs between 

those estimates reflect differences in the bills. 

Sections 2 and 3 of H.R. 5815, which would authorize the construction of facilities in New Orleans and Biloxi, are similar to 

parts of section 1 of S. 3421, and the estimated costs for those facilities are identical. Section 5, which concerns the replacement of 

a medical center in Denver, would authorize the appropriation of 

$98 million for that project, while the Senate bill would authorize 

$52 million. Section 4 of H.R. 5815 would authorize a facility in 

Charleston, while S. 3421 contains no such provision. 

Section 6 of this bill, which would authorize several construction 

projects for 2007, is similar to section 2 of S. 3421, except that H.R. 

5815 would not authorize seismic corrections for a medical center 

in San Juan, Puerto Rico. The differences in estimated costs for 

those projects reflect differences in the provisions. In addition, H.R. 

5815 would authorize the appropriation of about $24 million more 


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24 

than would be authorized by S. 3421 for the construction of a spinal cord injury center in Syracuse, New York. 

The provisions that would authorize the leasing of medical facilities are identical, the appropriation of as are the estimated costs. 

The provisions in sections 9 through 13 in H.R. 5815 are not in S. 

3421. Those sections would require VA to prepare certain reports, 

create a new administrative position, and prepare a specific business plan. 

Estimate prepared by: Federal costs: Michelle S. Patterson; Impact on State, local and tribal governments: Melissa Merrell; Impact on the private sector: Allison Percy. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

STATEMENT OF FEDERAL MANDATES

The preceding Congressional Budget Office cost estimate states 

that the bill contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act. 

STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to Article I, section 8 of the United States Constitution, 

the reported bill is authorized by Congress’ power to ‘‘provide for 

the common Defense and general Welfare of the United States.’’

ADDENDUM 

MAJOR MEDICAL FACILITY PROJECTS REQUESTED BY MEMBERS 

H.R. 5815 Description of Provision Amount Requestors 

§ 4 Advance planning and design for a co-located, 

joint-use major medical facility project in 

Charleston, South Carolina, with the Medical 

University of South Carolina.

$70,000,000 Hon. Steve Buyer and Hon. Henry 

E. Brown, Jr. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

TITLE 38, UNITED STATES CODE 

* * * * * * * 

PART I—GENERAL PROVISIONS 

* * * * * * * 

CHAPTER 3—DEPARTMENT OF VETERANS AFFAIRS 

Sec. 

301. Department. 

* * * * * * * 

312A. Director, Construction and Facilities Management. 

* * * * * * * 


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§ 312A. Director, Construction and Facilities Management 

(a) CAREER POSITION.—There is in the Department the position of 

Director, Construction and Facilities Management. The position of 

Director, Construction and Facilities Management, is a career position with responsibility for construction and facilities management 

across the Department, including responsibility for all major and 

minor construction projects. The individual appointed as Director 

shall be appointed by the Secretary and shall provide direct support 

to the Secretary and report to the Deputy Secretary of the Department. 

(b) QUALIFICATIONS.—The individual appointed to the position of 

Director, Construction and Facilities Management, shall be an individual who—

(1) holds an undergraduate or master’s degree in architectural design or engineering; and 

(2) has substantive professional experience in the area of construction project management. 

(c) RESPONSIBILITIES.—The individual appointed to the position 

of Director, Construction and Facilities Management, shall be responsible for overseeing and managing the planning, design, construction, and facilities operation, including infrastructure, of the 

Department’s major and minor construction projects and performing 

such other functions as the Secretary prescribes. Such oversight and 

management responsibilities shall include each of the following: 

(1) Developing and updating short and long-range strategic 

capital investment strategies and plans. 

(2) Planning, designing, and building facilities, determining 

architectural and engineering requirements as well as ensuring 

compliance with all applicable laws relating to the Department’s construction program. 

(3) Overseeing and managing the construction of Department 

facilities. 

(4) Managing the Department’s short and long-term leasing 

activity. 

(5) Repairing and maintaining the Department’s facilities, including custodial services, building management and administration, and maintenance of roads, grounds, and infrastructure. 

(6) Managing the procurement and acquisition processes, including contract award related to design, construction, furnishing, and supplies and equipment. 

* * * * * * * 

Æ 


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