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87–671 2015

LEGISLATIVE HEARING ON H.R. 3593, H.R. 4261, 

H.R. 4281 AND OTHER DRAFT LEGISLATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATION 

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

TUESDAY, MARCH 25, 2014 

Serial No. 113–58 

Printed for the use of the Committee on Veterans’ Affairs 

( 

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


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(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

DAVID P. ROE, Tennessee 

BILL FLORES, Texas 

JEFF DENHAM, California 

JON RUNYAN, New Jersey 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

PAUL COOK, California 

JACKIE WALORSKI, Indiana 

DAVID JOLLY, Florida 

MICHAEL H. MICHAUD, Maine, Ranking 

Minority Member 

CORRINE BROWN, Florida 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

ANN KIRKPATRICK, Arizona 

RAUL RUIZ, California 

GLORIA NEGRETE MCLEOD, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

TIMOTHY J. WALZ, Minnesota 

JON TOWERS, Staff Director 

NANCY DOLAN, Democratic Staff Director 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATION 

MIKE COFFMAN, Colorado, Chairman 

DOUG LAMBORN, Colorado 

DAVID P. ROE, Tennessee 

TIM HUELSKAMP, Kansas 

DAN BENISHEK, Michigan 

JACKIE WALORSKI, Indiana 

ANN KIRKPATRICK, Arizona, Ranking 

Member 

MARK TAKANO, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

TIMOTHY J. WALZ, Minnesota 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

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

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

is further refined. 


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C O N T E N T S 

Tuesday, March 25, 2014 

Page 

Legislative Hearing on H.R. 3593, H.R. 4261, H.R. 4281 and Other Draft 

Legislation ............................................................................................................ 1 

OPENING STATEMENTS 

Hon. Mike Coffman, Chairman, Subcommittee on O&I ....................................... 1 

Hon. Ann Kirkpatrick , Ranking Member ............................................................. 2 

WITNESSES 

Ms. Stella S. Fiotes, Executive Director, Office of Construction and Facilities 

Management, Office of Acquisition, Logistics and Construction, Department 

of Veterans Affairs ............................................................................................... 6 

Prepared Statement ......................................................................................... 34 

Accompanied by: 

Mr. Tom Leney, Executive Director, Office of Small & Disadvantaged Business 

Utilization, Department of Veterans’ Affairs ..................................................... 8 

Mr. Gregory Wilshusen, Director, Information Security Issues, U.S. Government Accountability Office .................................................................................. 17 

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

Mr. Raymond Kelly, Director, National Legislative Service, Veterans of Foreign Wars .............................................................................................................. 18 

Prepared Statement ......................................................................................... 53 

Ms. Diane Zumatto, National Legislative Director, AMVETS ............................. 20 

Prepared Statement ......................................................................................... 55 

Mr. James H. Binns, Chairman, Research Advisory Committee of Gulf War 

Veterans’ Illness ................................................................................................... 21 

Prepared Statement ......................................................................................... 62 

Mr. Davy Leghorn, Assistant Director, Veterans Employment and Education 

Division, The American Legion ........................................................................... 23 

Prepared Statement ......................................................................................... 95 

Mr. Frank Wilton, Chief Executive Officer, American Association of Tissue 

Banks .................................................................................................................... 24 

Prepared Statement ......................................................................................... 100 


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LEGISLATIVE HEARING ON H.R. 3593, H.R. 

4261, H.R. 4281 AND OTHER DRAFT LEGISLATION 

Tuesday, March 25, 2014 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON VETERANS’ AFFAIRS, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATION, 

Washington, D.C. 

The Subcommittee met, pursuant to notice, at 10:00 a.m., in 

Room 334, Cannon House Office Building, Hon. Mike Coffman 

[chairman of the subcommittee] presiding. 

Present: Representatives Coffman 

OPENING STATEMENT OF CHAIRMAN MIKE COFFMAN 

Mr. COFFMAN. Good morning. This hearing will come together. 

I want to welcome everyone to today’s legislative hearing on H.R. 

3593, H.R. 4261, H.R. 4281, and two pieces of draft legislation. 

The five bills we will be considering today are the product of extensive investigations conducted by this subcommittee in the 

course of its oversight duties that have revealed poor judgment, 

chronic mismanagement, and a general lack of accountability by 

the Department of Veterans’ Affairs. These bills are intended to 

heighten the protection for our veterans and improve services provided by the VA. 

First we will hear about H.R. 3593, the VA Construction Assistance Act of 2013, which ranking member Kirkpatrick and myself 

introduced on November 13, 2013. 

This bill recognizes the tremendous problems associated with VA 

major construction projects in Aurora, Colorado, New Orleans, Louisiana, and Orlando, Florida, as identified by an O&I investigation 

and substantiated by GAO report. 

According to these findings VA is delayed an average of 35 months with an average cost overrun of $366 million. 

This legislation requires the VA to use the Army Corps of Engineers as the special project manager to assist in completing these 

projects closer to their original budget and completion dates. 

Notably this bill is supported by the Veterans of Foreign Wars, 

the American Legion, and the former secretary of Veterans’ Affairs, 

Jim Nicholson. 

Second we will address H.R. 4261, the Gulf War Health Research 

Reform Act of 2014, which I introduced last week, along with 

Ranking Member Kirkpatrick and full committee Ranking Member 

Michaud. 


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This bill reinstills the independence originally expected of the research advisor committee for gulf war illnesses, which includes 

overseeing VA’s research on gulf war illnesses in order to improve 

the lives of those suffering as a result of such illnesses. 

Third, we will hear about H.R. 4281, the Protecting Business Opportunities for Veterans Act of 2014 sponsored by the Honorable 

Tim Huelskamp of Kansas. 

H.R. 4281 will make tremendous strides and holding accountable 

the bad actors that attempt to defraud service-disabled veteranowned small businesses and other veteran-owned small businesses 

of crucial set asides they receive in business. 

Fourth, we will discuss a piece of draft legislation entitled The 

Biological Implant Tracking and Veterans Safety Act of 2014. 

This legislation requires the VA to implement a standard identification protocol for biological implants that is consistent with the 

FDA’s unique identification system. The system must allow for the 

tracking of implants from donor to recipients. 

This bill also requires the VA to procure biological implants only 

from vendors using the system and only through competitive procurement processes. 

Ultimately this legislation will improve VA’s ability to prevent 

the implantation of contaminated tissue and also to notify veterans 

in cases of FDA recalls. 

Finally, we will hear about the draft directive titled The Veteran 

Information Security Improvement Act of 2014, which is sponsored 

by the Honorable Jackie Walorski from Indiana. 

This IT security directive is designed to assist VA in mitigating 

known information security weaknesses, and prevent, limit, and 

detect unauthorized access to its networks and systems. 

It also identifies detailed actions and tasks consistent with current federal requirements that should be taken by VA to address 

this longstanding information security challenges. Once again, I 

would like to thank all of those in attendance for joining us in our 

discussion today, and I now recognize Ranking Member Kirkpatrick from Arizona for five minutes to discuss her opening statement. 

OPENING STATEMENT OF RANKING MEMBER, ANN 

KIRKPATRICK 

Ms. KIRKPATRICK. Thank you. Thank you, Mr. Chairman for 

holding this hearing. 

Holding hearings on proposed legislation within the jurisdiction 

of our subcommittee is one of the most important legislative duties 

we have. These hearings enable us to gather the viewpoints of the 

Department of Veterans Affairs, veterans groups, and those with 

specific expertise regarding the matters under consideration. 

It is important that we gather these views and thoroughly consider them as we deliberate which bills this subcommittee will forward to the full committee. 

We in Congress should never assume we have all the answers. 

That is important to remember as we consider the often blunt tool 

of legislation. 

If we truly seek the most effective ways to accomplish a policy 

goal then we must carefully consider the views of stakeholders, inVerDate Aug 31 2005 08:29 Sep 09, 2015 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 Y:\87671.TXT PAT

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cluding those who would enact the policy and those whose lives 

would be affected by it. 

At the end of the day we are all striving to fix problems and improve the services and benefits that VA provides for veterans. This 

shared priority is a reflection of our nation’s commitment to our 

veterans. 

I note that the VA is able to provide comments on only two of 

the bills before us today. I ask that the VA provide us with its comments regarding the other bills as soon as possible so that we may 

be able to consider the department’s views going forward. 

I also ask that all of our witnesses provide us their views on any 

of the bills that they have not had time to include in their testimony. 

I also ask, Mr. Chairman, that in future legislative hearings we 

try as hard as we can to set the agenda early enough to provide 

all of our witnesses with the time they need to provide us with 

their thoughtful views on the bills before us. 

There are two bills before us today that I have co-sponsored with 

the chairman, H.R. 3593, the VA Construction Assistance Act of 

2013 and H.R. 4261, the Gulf War Health Research Reform Act of 

2014. I especially look forward to hearing from our witnesses regarding these bills. 

Again, thank you, Mr. Chairman, for holding this hearing, I look 

forward to hearing from our witnesses, and I yield back the balance 

of my time. 

Mr. COFFMAN. Thank you, ranking member. 

Mr. Huelskamp, you are recognized for five minutes. 

Dr. HUELSKAMP. Thank you, Mr. Chairman, I appreciate the opportunity to testify in support of H.R. 4281, the Protecting Business Opportunities for Veterans Act of 2014. 

Over the years this committee has heard testimony, received Inspection General reports, and heard reports of numerous businesses who we believe took advantage of set-asides rightfully reserved for service-disabled veteran-owned small businesses. 

As a member of this subcommittee as well as the house small 

business committee I believe the evidence of fraud and abuse of 

these programs requires stricter oversight and enforcement. 

This act would apply to small business concerns owned and controlled by a veteran with a service disability as well as small businesses controlled by veterans who receive federal contracts from 

the VA. 

The bill simply requires that upon receiving a contract with the 

VA the VA must obtain a certification that the business concerns 

will comply with the requirements already written into the law, in 

particular it will address how the recipient of the contract will 

meet the requirement that 51 percent of the contracted service or 

work be performed by a veteran-owned business or a service-disabled veteran-owned business. 

Those receiving a contract will be required one, to certify to the 

VA that to meet the specific performance requirements already in 

law, and two, acknowledge that the certification is subject to the 

false statement penalty under the U.S. Criminal Code. 

Furthermore this legislation will require the Office of Small 

Business and Disadvantage Business Utilization and the VA’s chief 


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acquisition officer to implement a process to monitor compliance 

and insure violations are reported to the Office of Inspector General. 

The IG is then required to file an annual report to the house and 

senate VA committees showing the number of small business concerns suspended or debarred from federal contracting and those referred for prosecution for violating the certification requirement. 

The intent in this bill simply is to provide law enforcement with 

the necessary tools to crack down on the contractors who use pass 

through and other methods to take advantage of set-asides rightfully reserved for veterans. 

An affirmative certification at the time of the award constitutes 

strong evidence of the knowledge and intent to deceive if a contractor is later found to have not been eligible. 

Finally the bill is necessary to direct the OSDBU and the VA 

chief acquisition officer to do what they should be doing all long, 

that is to monitor and enforce compliance. 

The Protecting Business Opportunities for Veterans Act will insure those rightfully deserving of the contracts have access and put 

in place tougher enforcement mechanisms to insure those wishing 

to exploit the system are caught and held accountable. 

And with that I yield back the balance of my time, Mr. Chairman. Thank you. 

Mr. COFFMAN. Thank you, Mr. Huelskamp. 

Ms. Walorski, you are now recognized for five minutes. 

Ms. WALORSKI. Thank you, Mr. Chairman. 

This directive stems from feedback the committee received regarding the members only briefing held on December 3rd, 2013 

which the VA, VA’s Office of Inspector General, and the Government Accountability Office all attended. 

At this briefing the committee provided an overview of VA’s information security vulnerabilities using VA’s own internal documents and previous testimony for VA Inspector’s General. 

Recognizing the importance of protecting the personal information of their constituents many members of Congress have asked 

the committee to take all steps necessary to strengthen IT security 

within the VA. 

In addition to the December briefing the committee held numerous meetings and discussions, sent information security-related letters, and held a hearing in June 2013 to address IT security weaknesses. Unfortunately VA’s lack of response, cooperation, and dialogue has been a longstanding issue that continues to this day. 

During the December briefing independent information security 

experts verified HVAC’s findings about the VA’s critical network 

vulnerabilities, including the following. 

VA’s network had been compromised, at least nine times since 

March 2010. 

Within VA’s 420,000 computers there were 5 vulnerabilities on at 

least 95 percent of these computers. 

VA employs tens of thousands of outdated operating systems. 

Because of VISTA’s vulnerabilities VA stated that a data breach 

to financial, medical, and personal veteran and employee protected 

information will occur with no way of tracking the source of the 

breach. 


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Over the past 20 years VA’s independent auditor, Office of Inspector General, and the GAO have all reported persistent weaknesses in the VA’s security, placing veterans’ personal information 

in jeopardy. 

In fiscal year 2013 the VA’s independent auditor reported material weaknesses in IT security for the twelfth year in a row. The 

VA’s Inspector General identified VA’s lack of effective information 

security controls as a major management challenge. 

The IG’s upcoming FISMA audit provides 35 recommendations 

for improving VA’s information security program. Thirty-two of 

these recommendations are identical to recommendations included 

in the previous years’ audit. 

The GAO has found VA’s IT security issues since the late 1990’s. 

Since 2007 the GAO has found major weaknesses in each of the 

five major categories of information security controls at the VA. 

The number of incidents affecting VA’s computer systems and 

network has risen over the last several years. 

The VA system serves as a gateway to many other federal IT systems. Given the goal of integrating electronic health records with 

the DoD and the eventual future connection of the National Health 

Care Program securing the VA’s IT system is critical. 

VA’s persistent, decades long IT security weaknesses highlight 

the need for stronger, more focused action to insure that the VA 

fully implements a robust security program. 

Despite OIG’s testimony and the committees’ evidentiary documents that originated within the VA itself, VA officials did not concur with our findings from the briefing, including that critical security vulnerabilities do exist and that the domain controller remains 

compromised. 

It is important to understand the critical nature of the security 

failures we are discussing. Not only do these failures disrupt the 

daily transactions between the VA and the veterans, but they are 

incredibly costly. 

The VA IT security failure in 2006 that impacted 26 and a half 

million veterans cost the VA $50 million just to mail out data 

breach notices. 

Given VA and OIT’s more than 3.7 billion budget and thousands 

of employees, these numerous security flaws are unreasonable and 

irresponsible. 

These failures are not due to a lack of resources, they are due 

to a lack of priorities and proper federal guidance. 

I am confident this directive will provide the VA with a clear 

road map, prevent ambiguity, and take away any guesswork in 

order to achieve a risk-based approach to address each of these 

challenges. 

The GAO has agreed and stated that if the directive is implemented it will allow VA to refocus its efforts on steps needed to improve the security of its systems and information. 

This bill itself establishes an explicit plan of action to resolve 

VA’s IT security weaknesses as identified by the committee, GOA, 

VA OIG, and others. This plan is taken from a common federal and 

industry best practices. 

Specifically the bill directs the secretary to reclaim, secure, and 

safeguard VA’s network, including their domain controller; defend 


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workstations from critical security vulnerabilities; upgrade or 

phase out of unsupported and outdated operating systems; secure 

web applications from vital vulnerabilities; protect VISTA from 

anonymous user access; and comply with federal information securities laws, OMB guidance, and NIST standards. 

To improve transparency and accountability the bill directs the 

secretary to submit to the committee a biannual implementation 

report, including a description of the actions taken by the secretary, to implement and comply with the directive. The VA OIG 

will also be required to submit to the committee an annual report 

that includes a comprehensive assessment of VA’s execution of the 

directive. 

Finally on a monthly basis the secretary shall submit to the committee reports on any discovered security vulnerabilities. 

Thank you, Mr. Chairman, I think our veterans deserve better. 

Thank you. 

Mr. COFFMAN. Thank you, Ms. Walorski. 

Our first panel is now at the witness table and I thank you for 

being here today. 

We will hear from Ms. Stella Fiotes, Executive Director of the Office of Construction Facilities Management from the Department of 

Veterans Affairs. She is accompanied by Mr. Tom Leney, Executive 

Director of the Office of Small & Disadvantaged Business Utilization of the Department of Veterans Affairs. 

Ms. Fiotes, your complete written statement will be made a part 

of the hearing record, and you are now recognized for five minutes. 

STATEMENTS OF STELLA S. FIOTES, EXECUTIVE DIRECTOR, 

OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT, 

OFFICE OF ACQUISITION, LOGISTICS AND CONSTRUCTION, 

DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY 

TOM LENEY, EXECUTIVE DIRECTOR, OFFICE OF SMALL & 

DISADVANTAGED BUSINESS UTILIZATION, DEPARTMENT OF 

VETERANS AFFAIRS 

STATEMENT OF STELLA S. FIOTES 

Ms. FIOTES. Thank you. 

Good morning, Mr. Chairman, Ranking Member Kirkpatrick, and 

other members of the subcommittee. Thank you for the opportunity 

to be here today to discuss VA’s views on pending legislation, including H.R. 3593, the VA Construction Assistance Act of 2013 and 

a draft bill that concerns compliance with VA’s small business programs. 

Mr. Chairman, I would like to ask that our written statement be 

entered for the record. 

Mr. Chairman, VA is not testifying on all the bills on the agenda 

today. Draft bills on gulf war illness research matters and VA IT 

securities programs were not received in sufficient time to prepare 

and clear administration views. 

I want to insure the subcommittee understands we are not 

dismissive of these remaining bills or your interest in them, this 

was purely a matter of having sufficient time to prepare well developed and helpful formal views on complicated subjects. 


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As noted in our written testimony we will be following up for the 

record on the remaining bills and we are glad to brief you and your 

staff at your convenience on the subject matter covered by those 

bills. 

I will speak to H.R. 3593 first. 

VA appreciates the strong interest and support from the subcommittee to insure that our major construction projects are delivered successfully. 

I would like to make the point that VA has a strong history of 

delivering facilities to serve veterans. In the past five years VA has 

delivered 75 major construction projects valued at over $3 billion; 

however, we also fully acknowledge our challenges on the major 

construction projects that have been the subject of a great deal of 

dialogue with you and other stakeholders. We are committed to 

continuing that dialogue. 

VA however does not believe that the approach outlined in the 

bill will achieve the desired results and thus does not support it. 

While there have been challenges with our projects we have 

taken numerous actions to strengthen and improve the execution 

of all of VA’s ongoing major construction projects and insuring the 

department’s future capital program is delivered on time and within budget. 

These include implementing the recommendations from the GAO 

and the Department’s Construction Review Counsel, including the 

specific actions that would be required in Section III of the bill. 

Therefore we don’t believe Section III of the bill is necessary. 

Section IV of the bill would require that VA enter into an agreement with the Army Corps of Engineers to procure a special project 

manager to oversee VA major construction projects for facilities in 

Denver, Orlando, and New Orleans. 

VA believes the creation of a special project manager would be 

problematic in the management and supervision of these projects. 

The bill raises serious questions about the contractual relationship between the VA and its contractor, potential confusion on the 

lines of authority the special project manager will have, vis-α-vis, 

the VA and the Corps, and the affect upon the independent exercise of discretion by the VA contracting officer who is ultimately responsible for managing the contract on behalf of the government. 

VA however continues to be open to consultation and collaboration with the Corps or other specialists outside VA. 

We continuously evaluate our processes and delivery methods for 

each lease and for each construction project on its merits and we 

benchmark industry best practices with several agencies, including 

the National Institute of Building Sciences, GSA, and the Corps. 

When VA determines that the best delivery strategy is to employ 

another agency such as the Corps this strategy is used. In fact VA 

and the Corps have a long history of working together to advance 

VA facility construction and share best practices. Our current discussions with the Corps are a logical evolution of that relationship. 

Mr. Chairman, thank you for the opportunity to present views on 

this bill. 

I would like to now turn to my colleague, Tom Leney, who will 

address the bill regarding service disabled veteran owned small 

businesses. 


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[THE PREPARED STATEMENT OF STELLA S. FIOTES APPEARS IN THE

APPENDIX] 

STATEMENT OF TOM LENEY 

Mr. LENEY. Good morning, Mr. Chairman, Ranking Member 

Kirkpatrick and other members of the subcommittee. Thank you 

for the opportunity to discuss the draft small business measure 

that the subcommittee asked us to review. 

Mr. Chairman, we understand that H.R. 4281, the Protecting 

Small Business Opportunities for Veterans Act was just introduced 

on Friday, March 21st. It differs substantially from the draft that 

we received earlier and the VA has not had the opportunity to comprehensively review this new text. 

You have our views on the original draft bill, I will provide some 

comments to the subcommittee regarding our preliminary analysis 

of the version introduced late last week as 4281. 

The VA understands the committee’s interest in veterans complying with the rules on limitations of subcontracting as the VA 

procures more dollars and awards from SDVOSB’s than the other 

civilian agencies of the government combined. Unfortunately this 

draft bill only applies to veteran-owned small businesses that are 

contracting with the VA. 

We think it unfairly singles out veterans and places an unfair 

burden on those businesses that would not be required of any other 

small businesses or at any other agency. 

Tools exist that we believe can meet the aims of this legislation. 

For example, monitoring the amount of work passed to subcontractors is required of contracting officers under the current federal acquisition regulation. 

In addition the VA has established a subcontracting compliance 

review program that audits prime contractors to insure compliance 

with this provision. 

We believe processes such as these enable us to achieve the objectives set out in the legislation. 

Thank you for the opportunity to testify before the committee 

today. Ms. Fiotes and I look forward to answering any questions 

the committee may have. 

Mr. COFFMAN. Our thanks to the panel. 

Okay. Ms. Fiotes, in Denver VA asked for bids based on the presumption that it would produce a $604 million project for the hospital, but it appears VA has produced potentially a billion dollar incomplete design which they provided eight months after the bid 

process was completed. How can VA prevent such loss of control in 

future designs? 

Ms. FIOTES. Mr. Chairman, we believe that the project designs 

we have delivered, albeit somewhat later than originally anticipated, are in fact able to be constructed within the appropriated 

amount for this project. 

Mr. COFFMAN. Ms. Fiotes, you reference the new Las Vegas facility in your testimony as an example of VA completing major construction; however, according to the GAO report Las Vegas was 

$260 million over budget and 74 months late. So is this representative of VA major construction efficiency, this project? 


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Ms. FIOTES. Mr. Chairman, in our response to the GAO draft report the VA outlined that it did not agree with the methodology the 

GAO was using to assess time and cost against these projects, 

starting at some point in the very early planning stages when the 

project, and not even the site, were actually defined and then taking that number and that schedule as the basis for comparing to 

what ultimately happened many years later with a real design and 

a real site and a real construction project we believe was not an 

accurate depiction. 

So we would argue that the time and the cost should be judged 

against the appropriated amount by Congress and the time the 

construction was bid, and in that sense we would state that the 

project was in fact delivered on time and on budget. 

Mr. COFFMAN. So are you saying that this project was delivered 

on budget and on time, the Las Vegas project? 

Ms. FIOTES. Based on the way that we account for time and 

budget, yes. 

Mr. COFFMAN. Wow. Well the GAO obviously differs with you, 

and I think what was so compelling about the GAO report was that 

in the report it referenced the Army Corps of Engineers as building 

the same projects or what it called similar projects for the Department of Defense on budget and on schedule. 

Ms. Fiotes, do you believe that contractors submit excessive or 

unwarranted change orders to drive up cost or cause delays? How 

does VA manage the change order process? 

Ms. FIOTES. Mr. Chairman, the change order process is a very 

critical process in the duration of the construction of any large complex project, and we recognized, as did some of the GAO reports, 

that our process was too lengthy and too cumbersome resulting in 

delays in the execution of the change orders and the payment of 

those change orders. 

We have since addressed those challenges. We have put in place 

new policies, we have established metrics for the change orders, we 

have added staff, we have added legal counsel to help us with the 

review of the change orders, and we are in a much better position 

now and are processing our change orders at a much better rate 

than in the past. 

We hope within the next several months to be completely caught 

up with our backlog. 

Mr. COFFMAN. So when the GAO report says that these major 

medical construction projects are delayed an average of 35 months 

each with an average overrun of $360 million each, you differ with 

GAO and you say that you can produce accounting standards that 

erase those delays and erase the amount that is over budget? You 

can come up with that? 

Ms. FIOTES. Mr. Chairman, I didn’t reference accounting standards, I just referenced our response to the GAO, which the GAO 

included in their final report, although they did not agree with our 

approach. 

It is that we measure time from the time a construction project 

is awarded and not from the time it was conceived, and we measure cost from the time the full amount is appropriated, not from 

the time the project was conceived. That was the difference beVerDate Aug 31 2005 08:29 Sep 09, 2015 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 Y:\87671.TXT PAT

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tween our evaluation of time and schedule and the GAO’s evaluation. 

Mr. COFFMAN. Well it is whatever you say it is on any given day. 

Ms. KIRKPATRICK. Thank you, Mr. Chairman. 

Thank you for your testimony today, and we want to, you know, 

help to solve this problem and get these construction projects completed so they can serve our veterans. 

And my line of question is going to be addressing two things. 

One is, is basically the construction management and using 

USACE, and then I also want to talk a little bit about the bid process. So those will be my lines of questioning. 

First, has the VA used USACE in managing a major construction 

project recently? 

Ms. FIOTES. Ranking Member Kirkpatrick, we have not used 

them for major construction projects; however, we have used the 

Corps for a number of minor construction projects, and more recently in construction projects for our National Cemetery Administration as well. 

Ms. KIRKPATRICK. Have you done any quantitative studies between the Corps’ overhead and your internal overhead as opposed 

to—when you use them I mean is there a difference in the overhead costs? 

Ms. FIOTES. I don’t have those facts before me. We could compare 

those. I am not sure what the numbers are. I just don’t know if we 

have done that, because those projects, the minor projects are not 

in my jurisdiction, they are completed by the Veterans Health Administration. But we could certainly get some more information if 

you would like. 

Ms. KIRKPATRICK. Does it make sense to you to use the Army 

Corps of Engineers in major construction management projects? 

Ms. FIOTES. Again, congresswoman, as I said, we evaluate each 

project on its merits, and if there were a case where we had a 

major project that we wanted to undertake with the Corps we 

would have to enter into early discussions with them way before 

the time that we would award a construction contract to see if that 

would be an appropriate vehicle to use. And we have done that, as 

I said, with numerous minor projects. 

Ms. KIRKPATRICK. Okay, let me go quickly to the bid process and 

we may go back to the management. 

Although your testimony doesn’t address the use of design build 

versus design bid build the legislation we are proposing requires 

design build to the extent practical. 

Can you enlighten the committee on the advantages and disadvantages of each of the types of bid process, design build versus 

design bid build? 

Ms. FIOTES. Congresswoman, the design build delivery method is 

a method where the architect and the contractor are awarded one 

single contract and the contractor has the responsibility to deliver 

the design as well as the construction of the project. 

The traditional design bid build process is where we have a separate contract with an architect engineer to develop a design, 100 

percent design, and then go out to bid and hire and award a construction contract to a separate contractor to build the project. 

There are advantages and disadvantages to both. 


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The traditional method allows for a complete design and for 

input of the user and the facility during the development of the design. 

The design build process takes a little bit more of the design out 

of the control, if you will, of the user and puts it in the hands of 

the contractor. It is said to save time in some instances. And again, 

it is a case by case basis. 

I will tell you that I have used design build in previous contracts, 

we have used design build at the VA for certain projects. Traditionally the very complex projects such as the medical centers we are 

talking about would probably not be the best suited for a design 

build because it would be very difficult to just describe the performance requirements and then leave the design completely up to 

somebody independent of the users. 

But we have in certain cases where it was just a single more 

standard type of construction project we have used design build, 

and we are considering using it in the future as well. 

So it is a case by case analysis of the project and what best suits 

it. 

Ms. KIRKPATRICK. One quick last question. 

Are change orders treated differently depending on whether it is 

design build or design bid build? 

Ms. FIOTES. Yes, they are. 

Ms. KIRKPATRICK. And how is that different? 

Ms. FIOTES. In the design bid build process the contractor has 

bid on 100 percent design documents and therefore any changes 

from those documents, that happen either because of a government 

proposed change or because of unforeseen conditions, must be submitted by the contractor to the government for an independent estimate and then an issuance of a change order for the amount that 

the government deems appropriate for that change. 

In a design build process there are fewer opportunities for the 

discussion between the government and the contractor on change 

orders because the contractor has taken on some of the risk of 

changes since he has developed the design as well. 

That is not to say that there are not changes and in the design 

build process when there are changes they are usually much more 

expensive. 

Ms. KIRKPATRICK. Thank you. I have gone over my time. 

Thank you for allowing me, Mr. Chairman. 

Mr. COFFMAN. Thank you, ranking member. 

Dr. Roe, State of Tennessee. 

Dr. ROE. Thank you, Mr. Chairman. 

And I want to delve in further what Ms. Kirkpatrick was talking 

about, something I have a lot of experience with having been in the 

process of building three hospitals, three medical office buildings, 

schools, public buildings for the City of Johnson City, Tennessee, 

so I am very familiar with the bid process and change orders. 

And literally it should be embarrassing to the VA, this Orlando, 

I mean I think the cubs are going to win the world series before 

that hospital is finished in Orlando, Florida, I think that is a possibility. So anything to speed it up, because money spent with what 

happened down there is not money spent on some other needy 

project the VA has. So I am going to go with what we did. 


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Very simply there are two ways. You very well stated out what 

a design bid build and what design build is, and they both have 

advantages and disadvantages. 

What I like about the design bid build is, is that when we would 

build a school, for instance, at home we would build in probably 

about ten percent change order. We knew there were going to some 

change orders. Once you get started there are things when you 

have designed it as well as you can with your architect and you 

had a sealed bid and a qualified contractor bid on it, you know you 

are going to run across some things in there that weren’t anticipated, so we build about ten percent and sometimes you don’t. 

And what you described is the way it should be done. If you hit 

something that needs to be changed it comes back, we would vote 

on it in a city council, approve that change order or not approve 

it, and go on. 

So I think that is a very good way to do it, and to have a—and 

what we hired—we learned this very early on, we hired our own 

person to not just have the contractor there, and that is why I 

think having a supervisor in the Corps of Engineers is a great idea, 

because you have got a third party who can look after your interests and watch over that project. And we hired someone, the City 

of Johnson City, a former contractor to do that very thing. They 

would look over every building structure that we put up, he was 

there every day several days a week at least looking over and supervising that along with it and working with the contractor, not 

some adversary, but looking after it, but looking at our interests, 

the taxpayers and the city people. 

So I would think that would be a good thing that you all would 

want that and to have an objective third party out there like the 

Corps who is not involved with VA to overlook your project. I think 

it will slow things down, I think it will make it better for you. I 

would encourage you to look favorably on that, not unfavorably on 

that. 

Any comments. 

Ms. FIOTES. Congressman, thank you for your remarks, and I 

agree with the way you have laid out the challenges, particularly 

with the change order process. 

We don’t believe that the establishment of this special project 

manager will aid the project because of the complex contractual relationships between the VA and the contractor, the responsibilities 

of the contracting officer as the arm, if you will, of the government 

in implementing the contract, and then the uncertainty of the role 

and the authority of this professional contractor. 

Dr. ROE. Well why would it work where I was, because it worked 

great. I mean we felt like our interests were being looked after on 

the job site when we had someone there who knew what they were 

doing who was in the construction business, who could tell us, no, 

this is not being done. Why would it work there and it wouldn’t 

work at a VA site? 

Ms. FIOTES. Well, and I can’t comment on the specific contract 

and the specific project, but I can tell you that we do have numerous project team members and project executives looking out 

for—— 

Dr. ROE. Well who was looking after Orlando? 


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Ms. FIOTES. I am sorry? 

Dr. ROE. Who was looking after Orlando and Denver and Las 

Vegas, these other projects that have not gone exactly like I think 

anybody wanted them to? 

Ms. FIOTES. And I agree that we have run into challenges, and 

I can’t speak anymore about the Orlando challenges because I 

think we have spoken about those in the past, but I think that the 

cooperation and the collaboration with the Army Corps of Engineers could be a benefit to the VA and to the project if it is the 

right type of collaboration. 

Dr. ROE. I agree 100 percent, and I think, I am looking at—— 

Ms. FIOTES. We just don’t think that the project manager may 

be the best vehicle. 

Dr. ROE. I think a project manager, someone who is there to look 

after our interests, the taxpayers, the veterans’ interest to make 

sure this project is done right and to point it to work with the contractor, not as an adversary. We didn’t have that relationship with 

our contractors. And I think you will find it works very well. I am 

surprised that the VA has a reluctance to do that. 

Mr. Chairman, I see my time has expired, I yield back. 

Mr. COFFMAN. Thank you, Mr. Roe. 

Mr. Walz. 

Ms. Walorski. 

Ms. WALORSKI. Thank you, Mr. Chairman. 

Ms. Fiotes, does the VA make sure that its prime contractors use 

surety bonds with their subcontractors to insure timely payment? 

Ms. FIOTES. Yes, we do, congresswoman. 

Ms. WALORSKI. On all projects? 

Ms. FIOTES. On all our projects, yes. 

Ms. WALORSKI. Thank you, Mr. Chairman, I yield back. 

Mr. Coffman. Mr. O’Rourke. 

Mr. O’ROURKE. Thank you, Mr. Chairman. 

I want to see if I can better understand some of what we are 

talking about. 

And so I understand that you don’t agree with the conclusions 

that the GAO has reached, and when the chairman was asking 

about the Las Vegas project in particular you talked about a difference in terms of when you begin to measure the costs outlayed 

and the start of the clock for the construction, not when the idea 

was conceived, but when the funds were appropriated. 

But would you accept I guess the thrust of the argument that 

projects are taking too long to complete and are too expensive or 

more expensive than they should be? 

Ms. FIOTES. I can’t necessarily agree with that. If we look at the 

projects at the time that they are fully scoped out with their requirements clearly defined with an appropriation that matches the 

requirements that have been submitted I can’t say that we exceed 

the cost after that point. 

But if the project spends too much time trying to get to that 

point that is a problem, and that challenge we have recognized. We 

have recognized that when the Construction Review Council, 

chaired by the Secretary, looked at some of those projects, and we 

recognize that the early stages of planning needed to be strengthened and we needed to be very clear in defining our requirements 


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and our scope before we came to Congress asking for money, and 

we have put that in policy and we no longer submit projects going 

forward for construction of appropriation lists, we have 35 percent 

design completed. 

That gives us the confidence that we have established the requirements, we know the basics of what the design is going to look 

like, and we have a substantive budget that we can base our request on. 

I don’t think that was happening in the past, and some of the 

projects that we are discussing happened before these policies were 

put in place. 

Mr. O’ROURKE. I appreciate that, and my perspective in my job 

representing El Paso is the fact that our VA facility—proposed VA 

facility, which is to be co-located with the active duty military hospital in El Paso, is number 79 on that SCIP list, which lists, all 

capital projects the VA has yet to construct, and so if—I understand the improvement in the processes that you just described, 

but if you are unable to acknowledge that the hundreds of millions 

of dollars in individual projects over what they were initially conceived to be and that the amount of time that we are taking to 

complete these is a problem and needs a more urgent corrective action to resolve it, it is deeply troubling to me as number 79 on the 

list for a facility that is desperately needed in El Paso where we 

are sending folks on a ten-hour round trip to get care that they 

should be able to receive in the community. 

So I hope you understand where I am coming from on this, and 

I agree with our ranking member who said, you know, we should 

only with the greatest hesitation move forward on legislation because it is such a blunt instrument, and you are the subject matter 

expert in this, not me, so I want you to be able to come up with 

the best possible solution to the problem we have. 

But it is hard for me when it doesn’t seem like there is an acceptance of the problem or at a minimum a very wide gulf between 

what you are hearing up here from the folks who represent these 

communities where we have these large cost and time overruns 

and then what you are saying, which is, you know, I guess changing—a difference of opinion about when the clock starts. You know, 

by the time you start the clock on our project we are, you know, 

a decade plus out from start. 

So that is where I am coming from, and it makes me more likely 

to support this legislation when I don’t hear in terms of at least 

I can understand an admission of the problem and how it is we are 

going to fix it with the urgency required not only to fix the current 

problems but to get to those that are, you know, further down the 

line on that SCIP list. 

Ms. FIOTES. Congressman, I don’t disagree that our process needed fixing, and that is what I was trying to describe before when I 

said that we recognize that we were not doing a good job of planning up front and establishing the requirements and nailing down 

the scope before we came to Congress to ask for an appropriation, 

and that is what has caused what appears to be a series of cost 

increases. 

The fact that the project started as a shared facility somewhere 

and ended up being a stand-alone replacement hospital on its own 


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campus in the span—over the span of several years of course added 

hundreds of millions of dollars to the cost. That was our fault. We 

were not doing a good job of planning before we came to the Congress. 

We do acknowledge that, and that is the reason that was the 

number one recommendation from the Construction Review Council 

and the number one priority to implement it. We would not bring 

forth projects that were not thoroughly thought through, thoroughly designed, and with a good solid budget before we asked for 

money. 

So no, I did not say that we did not—I just—that we did not have 

issues, I just said that the way the GAO report presented the cost 

escalations we did not agree with. 

Mr. O’ROURKE. I appreciate that. 

My time is expired, but I would love to follow up with your office 

after this to find out how this impacts not only the projects that 

we have identified today but those much further down the line, like 

number 79 on the SCIP list. 

Ms. FIOTES. No, we owe you that, congressman, we talked about 

it last time, we just didn’t make it happen yet. We will. 

Mr. O’ROURKE. Thank you. 

Thank you, Mr. Chairman. 

Mr. COFFMAN. Thank you. Dr. Huelskamp. 

Dr. HUELSKAMP. Thank you, Mr. Chairman. 

Mr. Leney, I appreciate your testimony, I appreciate that you 

haven’t had a full opportunity to review H.R. 4281, but a couple 

questions just on the program, and I am looking back at the GAO 

report from last August or over a year ago I guess, longer than 

that, August 2012, indicating the program remains vulnerable to 

fraud and abuse. Can you quantify the extent of the abuse by pass 

through? 

Mr. LENEY. Yes, sir. Since the last GAO report we put a lot of 

effort into making sure that the veterans first program is not vulnerable to fraud and abuse. 

We have instituted post verification audits of our eligible firms, 

we are doing about 100 of those a month. To date we have found 

less than three percent of the firms that we audit are ineligible; we 

go on site, look at the firms, look at their documentation, they are 

unannounced audits. Sometimes veterans do not appreciate the 

need to do that, but we appreciate the need to insure the integrity 

of the program, and we have found less than three percent to be 

ineligible at the time we audit them. 

So we think that the process that we use to verify firms is a very 

solid one, it sets the standard for the federal government, and it 

has been successful. 

This bill however speaks to a different issue, which is the issue 

of limitations on subcontracting, which is not directly in the purview of my office so I am going to step on a limb a little bit to talk 

about what contracting officers do. 

Contracting officers do monitor the performance of prime contractors and our office of acquisition and logistics and construction has 

put together a program where we go out and we do a subcontracting review. They also go on site, they look at documentation 

to determine whether or not prime contractors are both meeting 


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the small business subcontracting goals and to insure that limitations on subcontracting are met. 

Dr. HUELSKAMP. I didn’t understand, Mr. Leney, who does that? 

It is not your office. Who is the office actually falling through on 

that? 

Mr. LENEY. This falls under the office of acquisition and logistics 

and construction. 

Dr. HUELSKAMP. Okay. Have they had a chance to review the bill 

or any testimony from then, Mr. Chairman? 

Mr. LENEY. They have not has a chance—we have not had a 

chance to discuss the final bill that you presented, but like I say, 

we do have—we do have a program, because we agree that it is important to insure, particularly the prime contractors, when we provide awards to service-disabled veteran-owned small businesses or 

any business that—they—or any small business that they comply 

with the limitations of subcontracting, and that is the reason the 

VA established that program. So we would do additional reviews. 

They do it on a random basis and based on a risk assessment if 

they determine that there is a concern that a small business is not 

meeting its subcontracting. 

Dr. HUELSKAMP. How would they know if there was a concern if 

they are not—— 

Mr. LENEY. If a contracting officer has evidence that this might 

be going on they can refer a small business to this program and 

they go out and do an audit. 

Dr. HUELSKAMP. Who would make the reference? Who would 

refer that? 

Mr. LENEY. A contracting officer. The contracting officers are the 

people who have the responsibility to insure that the contract is 

properly implemented, and so they monitor the work of the prime 

contractor and they monitor the amount of work that is subcontracted out. 

Dr. HUELSKAMP. Well, as I read the OIG report and various 

other reports that therein is the concern, that you know, you say 

they monitor it, they have not done that adequately. 

More of a concern we have this set aside for veterans and I think 

the VA should be concerned if there is evidence that the work is 

not being done as required under the law by veterans, and I think 

we are going to hear testimony later from veterans’ organizations 

that would expect that to occur. 

But as you know the false statements by contractors are already 

a violation of the law, and this sort of a bill is pretty simple, it just 

says they have to submit and that they understand that that helps 

prosecution later on if, and, when it is found that there is some evidence of fraud and abuse in this system. 

Again, I know this committee is committed to making certain 

and certainly the small business committee as well to make certain 

that the work is done as required under the law, and we just want 

to provide tools to the prosecutors to make that happen. 

With that, Mr. Chairman, I yield back. 

Mr. COFFMAN. Thank you, Mr. Huelskamp. 

Our thanks to the panel. You are now excused. 

I now welcome our second and final panel to the witness table. 

On this panel, we will hear from Mr. Gregory Wilshusen, Director 


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of Information and Security Issues for the Government Accountability Office; Mr. Raymond Kelley, Director of National Legislative 

Service, for the Veterans of Foreign Wars of the United States; Ms. 

Diane Zumatto, National Legislative Director of AMVETS; Mr. 

James H. Binns, Chairman of the Research Advisory Committee on 

Gulf War Veterans’ Illnesses; Mr. Davy Leghorn, Assistant Director 

of the Veterans Employment and Education Division of the American Legion; and Mr. Frank Wilton, Chief Executive Officer of the 

American Association of Tissue Banks. 

Now, all of your complete written statements will be made part 

of the hearing record. Mr. Wilshusen, you are now recognized for 

five minutes. 

f 

STATEMENT OF GREGORY WILSHUSEN 

Mr. WILSHUSEN. Chairman Coffman Chairman Coffman, thank 

you very much for the opportunity to testify today on this hearing 

related to some proposal legislation, particularly the one related to 

information security at the VA. 

Before I begin though, I’d like to recognize several members of 

my team, who were instrumental in developing my written statement. With me today is Tyler Mountjoy and also back at the office, 

Jeff Knott, Jennifer Franks and Lee McCracken, and these individuals will be involved with our ongoing review of information security at VA. 

The use of information technology is critical to VA’s ability to 

carry out its mission of assuring that veterans receive proper 

health care, benefits, support and memorials. However, without 

adequate protections, the VA systems and information are vulnerable to exploitation by a wide array of cyber based threats, potentially resulting in, among other things, the compromise of veterans’ 

personal information. 

GAO has identified information security as a government wide 

high risk area since 1997. And the increasing number of security 

incidents at the VA further underscores the need for the department to implement appropriate security over its systems and information. 

Our work has shown that the Department of VA continues to 

face longstanding challenges in its information security program. 

From fiscal year 2007 through 2013, we noted that VA has had 

weaknesses in each of the five major security categories that we 

track over that period of time in each year, and these include those 

controls that protect and limit unauthorized access to its systems, 

controls such as configuration management which are intended to 

ensure that only authorized programs are in operation and are current and apply appropriate patches, segregation of duties, contingency planning which is also intended to assure that disruptions in 

service are minimized and prevented to the extent possible, and 

importantly, security management. 

And these are the controls that establish the governance and assure that controls are tested, and known weaknesses are remediated in a current timely manner. 


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For the twelfth year in a row, the VA IG has identified information security as a material weakness, which is the most significant 

kind in its audit of the department’s financial statements. 

In addition, the IG has noted that it is a major management 

challenge for the department to effectively implement its security 

program. Our work that dates back to the 1990s show that these 

weaknesses have been persisting for a very long. 

And to help address this, we know that the subcommittee is considering draft legislation which is intended to improve and help VA 

improve its information security program. 

I would like to point out that the draft legislation allows for and 

provides that the VA implements security objectives, as well some 

very specific security control activities. In certain instances, the 

changing technologies, cyber threats and business practices at 

agencies introduces risks that very specific control activities that 

may be appropriate today may not be appropriate tomorrow. 

And so we suggest that by emphasizing the need for VA to focus 

on the security objectives, and ensure that the security activities 

that are identified are implemented on the basis of risk will help 

to assure that those objectives are being met and could result in 

VA improving its information security. 

Mr. Chairman, that concludes my statement. I’d be happy to answer your questions at the appropriate time. 

[THE PREPARED STATEMENT OF GREGORY WILSHUSEN APPEARS IN

THE APPENDIX] 

Mr. COFFMAN. Mr. Kelly, you are now recognized for five minutes. 

STATEMENT OF RAYMOND KELLEY 

Mr. KELLEY. Thank you, Mr. Coffman Chairman. On behalf of 

the men and women of the Veterans of Foreign Wars and our auxiliary, thank you for the opportunity to testify today. 

In regards to H.R. 3593, the VA Construction Assistance Act of 

2013, it’s well documented that the Department of Veterans Affairs 

struggles to complete major medical facility construction projects 

on time and on budget. 

Currently, VA has an average project delivery delay of 35 months and average costs overrun of more than $300 million. VA is in the 

process of building three medical centers, each of which has been 

met with their own unique problems that has caused VA to lose 

time and money that could’ve been used on other projects. 

VA has a list of major construction projects that will cost more than $20 billion to complete. Every effort must be made to ensure 

every dollar is used efficiently so VA can close these major construction gaps. H.R. 3593 will help VA achieve these goals. 

Section 3 of this bill calls for five specific reforms to VA’s major 

medical facility construction process. They are use medical equipment planners, develop the use of project management plan, peer 

review project management plans, develop a metrics to monitor 

change order processing, and use designed-build process when possible. 

Using medical equipment planners places the experienced medical expert or equipment expert at the disposal of the architect and 

the construction contractor. When used properly, the medical 


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equipment planner can work with the architect during the design 

phase, and then the construction contractor during the build phase 

to ensure needed space, physical structure, and electrical support 

are adequate for the purchased medical equipment, reducing 

change orders and work stoppages. 

Poor communication within VA and between VA and the general 

contractor has also led to delays and cost overruns. By developing 

and using project management plans, all parties at the onset of the 

project will have a clear understanding of the roles and the authorities of each member of the project team. Included in the plan 

will be a clear guidance on communication, staffing, cost and budget, as well as change order management. 

Construction peer excellence reviews are an important aspect to 

maintaining a high level of construction quality and efficiency. 

These reviews provide important feedback, a separate set of eyes 

on the project management plan, to ensure a plan is in place, to 

make the project come in on time and on budget. 

The VFW believes that VA should migrate from a design bid 

build to a design build model of construction management. A design build project teams the architect and engineer company and 

the construction contractor under one contract. This method can 

save VA up to six months of time by putting the design phase and 

the construction performance metric together. Placing the architect 

at the lead from the start to finish, and having a prime contractor 

work side-by-side with the architect, allows the architect to be an 

advocate for VA. 

Also, the architect and the prime contractor can work together 

early in the design phase, and reduce the number of design errors, 

and also allow them to identify and modify building plans throughout the project. The VFW agrees with the recommendations allowed in Section 3 of this legislation. 

Section 4 calls on VA to enter into an agreement with the Army 

Corps of Engineers, so the Corps can provide a special project manager to conduct oversight of the construction operations regarding 

compliance of acquisition regulations, and monitor the relationship 

of VA and the prime contractor at the three ongoing projects in 

Denver, Orlando, and New Orleans. 

The VFW supports this provision, but it should be a stop gap 

measure to help VA to quickly complete these three outstanding 

major construction projects and systems must be put in place to ensure VA can function under a similar guidance without the assistance of the Corps in future projects. 

It is important for VA to become more efficient at facility construction. Veterans have expectations that medical facilities will be 

available when VA first states when the completion date will be. 

It is obvious by looking at the number of delays and the cost 

overruns, that the contracting and building procedures that VA 

currently use are inadequate and are costing VA millions of dollars 

more for each project, and causing five or six years’ delay on much 

needed medical facilities. 

By passing this legislation, VA will gain better oversight and cost 

controls and more efficient procedures for future construction 

projects. 


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Mr. Chairman, this concludes my testimony and I look forward 

to any questions you or the committee may have. 

[THE PREPARED STATEMENT OF RAYMOND KELLEY APPEARS IN THE

APPENDIX] 

Mr. COFFMAN. Thank you, Mr. Kelley. Ms. Diane Zumatto, National Legislative Director of AMVETS, you have five minutes. 

STATEMENT OF DIANE ZUMATTO 

Ms. ZUMATTO. Chairman Coffman, Ranking Member Kirkpatrick 

and distinguished committee members, while I’m pleased to have 

the opportunity to sit before you today, I’m simultaneously disheartened that it’s because we’re dealing with administrative 

issues rather than making progress towards the understanding and 

treatment of the scourge that is Gulf War illness. 

If we expect to understand Gulf War illness, if we ever expect to 

develop medically appropriate treatments for it, and if we ever 

hope to truly improve the quality of life of our Gulf War veterans, 

then business as usual can no longer be accepted. 

Twenty-three years have passed since the end of the Gulf War, 

and sixteen since Congress first mandated the appointment of a 

public advisory panel of independent scientists and veterans to advise on federal studies and programs to address the health consequences of the Gulf War. 

AMVETS’ sole interest in seeing this legislation enacted is the 

health and therefore the quality of life of our Gulf War veterans. 

For all these years now, these men and women have suffered and 

continue to suffer from the often debilitating effects of Gulf War illness. How much longer are they to be expected to wait to get relief 

from their decades’ long pain and distress. 

AMVETS believes this legislation, H.R. 4261, the Gulf War 

Health Research Reform Act of 2014 can be an important part of 

the solution that Gulf War veterans have been waiting for all these 

years. 

AMVETS fully supports H.R. 4261 which would establish the 

RAC as an independent committee with authority over budget allocations, staffing levels and expenditures, personnel decisions, processes, procurements, and other administrative and management 

functions. 

This is perhaps the most important provision of the legislation. 

It would also require that the majority of the RAC members be appointed by the Chairman and ranking members of the House and 

Senate Veterans Affairs Committees rather than the VA. 

This provision means that the RAC will not become just another 

part of the VA. It will also strengthen the RAC’s ability to review, 

research, and studies, as well as publish reports related to Gulf 

War illness. The ability of the committee to freely make and publish recommendations, reports, et cetera, increases transparency 

and positively adds to the body of work on Gulf War illness. 

The legislation also expressly a sense of Congress that VA should 

contract with the Institute of Medicine to conduct several Gulf War 

studies and reports previously ordered by Congress, which were not 

conducted or were not conducted in accordance with Congress’ direction. 


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Until the right questions are asked, and the correct studies are 

conducted and considered, solutions will not be found. It also requires the VA to ensure that research conducted on this disease be 

referred to as Gulf War illness. It’s time for the VA to call this condition by its commonly accepted name. 

And with regard to future research, it would require that the Institute of Medicine reports on the health effects of veteran toxic exposures, consider animal, as well as human studies as Congress 

has previously ordered, to better understand the causes and how 

best to treat our afflicted veterans. 

Since its formal establishment in 2002, the RAC’s charter has 

undergone a series of minor changes, including in April 2014, May 

2006, May 2008, and November 2010. Until May of 2013, there had 

not been any fundamental changes made to the committee’s charter. All that changed with a stroke of pen on 17 May 2013, when 

the independence oversight role and the provision providing the 

committee with authority over its own staff and budget were eliminated. 

With this action, it appears that the RAC has essentially been 

turned into nothing more than an internal VA advisory committee, 

operating strictly under VA’s authority with little to no connection 

to the national community. 

I’d be happy to answer any further questions. 

[THE PREPARED STATEMENT OF DIANE ZUMATTO APPEARS IN THE

APPENDIX] 

Mr. COFFMAN. Thank you, Ms. Zumatto. Mr. James Binns, Chairman of the Research Advisory Committee on Gulf War Veterans’ 

Illnesses. 

STATEMENT OF JAMES H. BINNS 

Mr. BINNS. Thank you for the opportunity to testify in support 

of H.R. 4261. 

Since Congress created the Research Advisory Committee on 

Gulf War Veterans’ Illnesses, our members have testified at ten 

congressional hearings. This is the last time a committee member 

will freely testify without VA censorship unless this bill becomes 

law. 

Gulf War illness is a serious disease associated with service in 

the war, affecting 250,000 veterans. It cannot be explained by any 

psychiatric illness, and likely results from environmental exposures. 

Effective treatments can likely be found with the right research. 

These are the conclusions of the Institute of Medicine. Next month 

our committee will release a five year report that shows research 

is making progress. But just as science is turning the corner, career 

VA and DoD staff have attempted to revolve old fictions, that the 

same thing happens after every war, due to psychiatric factors. 

Because there is no evidence to support this position, they have 

resorted to manipulating research to provide apparent support. In 

its recent survey of Gulf War veterans, the VA Office of Public 

Health included the questions to identify PTSD but not Gulf War 

illness. 

In a medical journal, the heads of the three VA war related illness and injury study centers wrote that the illness quote, has 


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been documented after armed conflicts since the Civil War, and 

that a bio psycho-social approach will best benefit the patient. The 

list goes on. 

VA’s talking points say that it does not support the notion that 

some have put forward that these health symptoms arise as a result of PTSD or other mental health issues. But the some who are 

putting these notions forward are VA staff. 

These actions threaten to mislead science down blind allees once 

again, just as has happened for most of the last 23 years. 

Our committee has been charged since its inception with assessing the effectiveness of government research. We complimented 

early progress under Secretary Shinseki. But when staff launched 

this campaign, we reported it, and asked the Secretary to investigate and remove those responsible from Gulf War research responsibilities. 

Instead, VA removed us. In May of last year, I was notified that 

the committee’s charter had been changed to eliminate its charge 

to assess the effectiveness of government research, and that the 

membership of the committee would be replaced over the next year. 

Fresh blood is certainly desirable, but two of the three scientists 

subsequently proposed for membership by VA were stress advocates. One has edited a textbook on stress, and is a member of the 

American Psychosomatic Society. VA has sought to backtrack, pulling these names, and appointing others, but they have shown 

where they intend to go, once they are no longer under scrutiny. 

VA has attempted to explain the charter changes as necessary to 

comply with the Federal Advisory Committee Act, or that the Committee’s work is an inappropriate oversight. But virtually identical 

language has been part of five charters signed by four secretaries, 

including Secretary Shinseki. 

All recognized, that an inherent part of advising on future research is to assess the effectiveness of the research already being 

done. 

The clear purpose of the charter change was to stop our committee from reporting on staff efforts to mislead research, and that 

is exactly the effect that it’s having. Attached to my testimony is 

the draft section on VA’s research program which had to be removed from the report our committee will release next month. 

In addition, VA has recently stated that committee members may 

not release reports without written VA approval. 

H.R. 4261 gives back to the Research Advisory Committee the responsibilities and independence VA has taken away. Ms. Zumatto 

has already summarized the terms, so I will proceed to state that 

this bill is vital to maintain the hope that progress toward effective 

treatments will continue. But restoring the committee only gets us 

back to where we were: Advancing science in one area, while the 

staff pulls it back somewhere else. That is what has happened for 

most of the last 23 years. If the IOM is correct, and I believe it is, 

that effective treatments can likely be found with the right research, then Gulf War veterans would likely have effective treatments today but for this staff obstruction. 

Unless staff obstruction is removed once and for all, science candidly may never reach this goal. VA leadership has decided to shoot 

the messenger instead. I urge Congress to go beyond this bill and 


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pursue a rigorous investigation necessary to end this shameful history and clear the way ahead. 

[THE PREPARED STATEMENT OF JAMES H. BINNS APPEARS IN THE

APPENDIX] 

Mr. COFFMAN. Well, thank you so much for your testimony. I 

have just got to say, as a Gulf War veteran I want to thank you 

both, Ms. Zumatto and Mr. Binns, for your attention on this issue. 

I just think it is so disgraceful how our Gulf War veterans have 

been treated on this issue. 

Mr. Davy Leghorn, Assistant Director of the Veterans Employment and Education Division of the American Legion. 

STATEMENT OF DAVY LEGHORN 

Mr. LEGHORN. Chairman Coffman, Ranking Member Kirkpatrick 

and distinguished members of the subcommittee. On behalf of our 

national commander, Dan Dellinger, and the 2.4 million members 

of the American Legion, thank you for the opportunity to submit 

the views of the American Legion regarding the bill to improve the 

oversight of contracts awarded by the Secretary of Department of 

Veteran Affairs to veteran owned small businesses. 

Many of our veteran small business owners are at a disadvantage when they have to compete with companies that don’t actually 

complete more than 50 percent of the required work of contracts 

that are specifically set aside for service disabled veteran owned 

small businesses. 

The purpose of a veteran’s set aside contract is to bolster the capacity of the veterans small business industrial base, and likewise, 

for contracts designed for service disabled veteran owned small 

businesses. 

When the majority of this money ends up going to non-qualifying 

businesses by way of a pass-through company, the good intentions 

of public law, 109–461 become meaningless. This is why the American Legion passed Resolution 73 which endorses legislative efforts 

to ensure that contracts awarded pursuant to the veterans first 

program are awarded to companies that truly are entitled to receive these set asides. 

The American Legion advocated for Public Law 106–50, which 

made all federal agencies stakeholders in supporting veterans entrepreneurship. The American Legion also supported public law 

109–461, which provided VA with the authority to set higher agency standards for SDVOSB and VOSB set asides. 

VA refers to this program as the Veteran’s first contracting program or Vet First. The American Legion has vested interests in 

and is very protective of the programs we help institute within the 

federal government. This is why we support legislation that would 

increase problematic oversight and increased penalties for bad actors who maliciously seek to defraud the federal government. 

Regarding a certification of good faith to the Secretary, the 

American Legion believes that this is a solid step in ensuring our 

veterans fully understand the rules when bidding on and accepting 

prime responsibility for federal contracts, and also, understand 

what the penalties are for making false claims and statements. 

However, fraud and abuse is neither rampant nor exclusive to 

the veterans small business community alone. Other disadvantaged 


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small business programs have come under scrutiny in the past, yet 

they are not held to an extra administrative hurdle. 

The American Legion is concerned with the message this administrative step sends to the small business community and the public as a whole, and with support, similar scrutiny and administrative safeguards across the federal procurement landscape. 

The American Legion understands the intent of this certification, 

and we caution this committee to ensure that we are not singling 

out the veterans small business community as the only program 

that might meet safeguards. 

This extra administrative step would be easier for the veterans 

small business community to accept wholeheartedly if it were instituted among all over disadvantaged small business set aside programs as well. 

Again, the American Legion supports this bill but ideally we 

would prefer to see the same standard being applied, not only with 

38 CFR, but extended to 13 CFR as well. 

Lastly, regarding the bill’s congressional reporting mechanism, 

the American Legion agrees that an independent entity such as 

VA’s Office of Inspector General or the Small Business Administration should conduct a report on VA’s OSDBU’s oversight. OSDBU’s 

main role is small business advocacy within the agency. The report 

in the acquisitions issue that falls outside of OSDBU’s purview, so 

the American Legion would go as far as to recommend that aside 

from minor aggregate reporting, OSDBU be completely removed 

from the referral and reporting process and ensuring that the report submitted to Congress is unbiased. 

In conclusion, the American Legion believes that the responsibility is upon all the stakeholders to ensure that we become better 

stewards of the veterans first program. The American Legion will 

continue to work with the Small Business Administration and the 

Department of Veteran Affairs to increase contracting opportunities for our veteran small business owners, and to ensure that the 

money allotted for these set aside contracts stay within our community. 

The American Legion appreciates the opportunity to testify 

today. Again, thank you, Chairman Coffman 

[THE PREPARED STATEMENT OF DAVY LEGHORN APPEARS IN THE

APPENDIX] 

Mr. COFFMAN. Thank you, Mr. Leghorn. Mr. Frank Wilton, Chief 

Executive Officer of the American Association of Tissue Banks. 

STATEMENT OF FRANK WILTON 

Mr. Wilton, Chairman Coffman. 

This critical legislation directs the Secretary of Veteran Affairs 

to adopt a standard identification protocol for use in the procurement of biological implants, by building upon the unique device 

identifier or UDI, this legislation will ensure that biological implants can be appropriately tracked from the donor of the human 

tissue all the way to the recipient. 

This critical capability for track and trace efforts will enhance 

patient safety, expedite product recalls, and assist with inventory 

management. 


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This legislation takes a bold step to expand the application of the 

concept of the UDI to all tissue products, including those tissue devices which are already covered by the UDI, as well as another 

product category—certain biological implants, or as termed by the 

Food & Drug Administration, 361 HCTPs. 

While many of the biological implants do have bar codes, by requiring a standardized format as outlined in this legislation, it is 

easier for the Department of Veteran Affairs’ medical facilities to 

utilize universal bar coding conventions. 

As the Secretary of Veteran Affairs opts to adopt the standard 

identification protocols for tissues, both devices and non-devices, I 

urge you to ensure the Secretary to provide a menu of options. 

Under the UDI final rule, FDA has done just that, by providing 

for multiple entities called issuing agencies. At this time, FDA has 

provided for three different issuing agencies: GS1, Health Industry 

Business Communications Counsel or HIPBCC, and ICCBBA. I 

hope that this flexibility is maintained within the Department of 

Veteran Affairs. 

However, given that the bill language already suggests that the 

unique identification system is comparable to the UDI provides, we 

believe the intent to provide that flexibility is inherent in the legislation. 

For those of you unfamiliar with my organization, the American 

Association of Tissue Banks is a professional, non-profit scientific 

and educational organization. The association was founded in 1976 

by a group of doctors and scientists who had started in 1949, our 

nation’s first tissue bank, the United States Navy Tissue Bank. 

It is the only national tissue banking organization in the United 

States, and its membership totals more than 125 accredited tissue 

banks and 850 individual members. 

These banks recover tissue for more than 30,000 donors and distribute in excess of 2 million allographs for more than 1 million tissue transplant performed annually in the United States. 

The vast majority of tissue banks that process tissue maintain 

AATB accreditation. First published in 1994 and presently in its 

thirteenth edition, the AATB standards for tissue banking are recognized as the definitive guide for tissue banking. The AATB 

standards have served as the model for federal and state regulations, as well as several international directives and standards. 

Currently, the statutes are regulations in 19 states, reference 

AATB standards, institutional accreditation or individual certification. 

Given the wide acceptance of AATB’s standards, I would be remiss if I didn’t mention one aspect of the legislation which is disappointing. The current legislation lacks a requirement that biological implants purchased by the VHA be procured from accredited 

tissue banks and accredited tissue distribution intermediaries. 

While I understand that there may be some concern about imposing such a requirement because AATB is a private entity, I would 

just note that there are other instances in which the VHA has decided that private accreditation is not only appropriate, but required. 

Specifically, the VHA requires medical facilities to receive and 

retain accreditation by the Joint Commission, a private accrediting 


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agency. Leading medical centers of excellence require AATB accreditation of vendors from whom they procure tissue graphs. 

In addition, the American Academy of Orthopaedic Surgeons recommends the use of tissue from banks that are accredited by 

AATB. By not requiring that vendors adhere to the highest safety 

standards required by the AATB’s accreditation process, I remain 

concerned about the overall safety and quality of the products provided to our veterans. 

I welcome your questions and yield the remainder of my time. 

[THE PREPARED STATEMENT OF FRANK WILTON APPEARS IN THE

APPENDIX] 

Mr. COFFMAN. Thank you for your testimony. Mr. Kelley, what 

do you believe explains the lengthy delays and overruns in major— 

in VA major construction projects? 

Mr. KELLEY. Unfortunately, I think sometimes politics gets in 

the way within VA, within the community, within Congress. There 

is—everybody’s got their vision of what it should be, and the ball 

starts rolling, those visions change along the way to meet the needs 

of the politics, not necessarily the veterans. And then as that works 

out, the needs of the veterans are taken into account. 

Mr. COFFMAN. Mr. Binns, please briefly describe how VA has 

interfered, undermined or impeded the work of the RAC. 

Mr. BINNS. Well, VA has removed our charters charge to review 

the effectiveness of government research. That means that you, the 

Secretary of Veterans Affairs and the public will not know what an 

independent body of scientists and veterans considers is happening 

within VA research. 

And as you will see from reviewing the draft which had to be removed from our report, which I have attached to our written testimony, that is a serious indictment indeed. 

The latest action that has been taken is that each committee 

member, in the letter inviting them to attend the next meeting, 

which we were asked to sign, acknowledges that we will not share 

any information, reports, recommendations produced at the meeting without the written approval of VA. Even the pretense that the 

committee is independent has been removed. 

So you will not ever hear from a RAC chairman in the future, 

I can assure you, who has not had each and every word of his testimony vetted and written for him or her. 

Mr. COFFMAN. Ms. Zumatto, what does autonomy for the RAC accomplish for Gulf War vets? 

Ms. ZUMATTO. Well, I think that certainly the more people we 

have involved in this process and the more—I do not know if I 

want to say competition, but it should not—this is not something 

that should be handled by one organization or one agency. 

And so having the RAC and having them being able to provide 

an individual opinion on what the—what is happening in the VA 

I think is only a positive thing. I think our veterans are going to 

benefit by having that, having another set of eyes on what is happening. 

Mr. COFFMAN. Very well. Mr. Kelley, your testimony mentions 

cost overruns and adversarial relationships between VA and contractors. There is evidence that such problems occurred in Denver, 

or in Aurora, and possibly other sites where VA asked for bids 


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based on the presumption that it would produce in a situation of 

Aurora, a $600 million project, but it appears VA has produced a 

project potentially much more expensive than that in terms of its 

design, which they provided eight months after the bid process was 

completed. 

What should VA do to maintain control of construction designs 

in the future? 

Mr. KELLEY. I think going to the design build model will help. 

It puts the contractor in the process early on so you do not get an 

architect who has got a grand design of a beautiful building that 

might not be practical, and then when the build starts, the contractor has to come in and say, this space is not going to be right, 

and there is a conflict between the contractor and the architect, 

which also conflicts with what VA had asked for to begin with, and 

what the outcome is going to be. 

So I think putting those two together at the very beginning of 

the process, so the architect and the contractor are on the same 

page, that the outcome will be cheaper. Because you are not running into cost overruns when you bid on a design, and then you realize, well, what we need in here is not going to fit in the design 

that we have and we have to go back and fix this. Now we have 

got change orders, we have got design redos that increase time and 

increase costs. 

Mr. COFFMAN. Thank you, Mr. Kelley. Ranking Member Kirkpatrick? 

Ms. KIRKPATRICK. Thank you, Mr. Chairman. I join the Chairman in thanking you, Ms. Zumatto and Mr. Binns for your attention and your work on behalf of the Gulf War veterans and keeping 

the attention focused on the illness. 

You have been a great resource to my office, Mr. Binns, and I 

do not really have any questions, but I just wanted to thank you 

for being here today and for the work that you are doing. 

I want to ask a question about the tissue bar coding, Mr. Wilton. 

One of the things that we are working on is to keep the same formulary in the Department of Defense as we have in the VA, and 

we are finding that that is a little more difficult than we thought 

it might be. 

So can you tell me if the Department of Defense uses the bar 

code that you are proposing for the VA? 

Mr. WILTON. I think one of the benefits of this will be that, as 

it becomes universal, it will be used in all of the health care settings, so not only DoD but VA, but also in other health care settings. So I do not believe they currently do, but we would certainly 

support the use of it in other settings. 

Ms. KIRKPATRICK. Okay. And that is something that we are able 

to be successful with this legislation that I would like to work with 

you on because we are having joint meetings between the top positions at the VA with the top positions at the Department of Defense, ultimately with the goal that we will be able to have one 

good medical record transitioning out of the military into the VA 

system. So thank you for that. 

Mr. WILTON. We would welcome the opportunity to work with 

your office on that. 


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Ms. KIRKPATRICK. Thank you. Mr. Leghorn, I recently visited 

some military bases and, my role was really to talk to military 

members who are soon transitioning into the VA, and what we 

could put in place for them while they are still in service to make 

that transition easier. 

And the number one issue was jobs. They said, you know, they 

were really concerned about where they would find work, how they 

would find work. So I appreciate your emphasis on hiring vets, but 

in recent meetings with some of our veterans groups, there is certainly a feeling, and I have not looked into this in terms of, you 

know, really investigating, but there is a feeling that all of these 

programs are great, but there is no enforcement, that people are— 

businesses are really overlooking the programs. There’s no teeth in 

this legislation to make sure that veterans are indeed being given 

preference. 

Has the American Legion done any studies, any research into 

that? 

Mr. LEGHORN. Not that I know of, no. 

Ms. KIRKPATRICK. Okay. Is it something that you are hearing 

that you would agree maybe needs to be done? 

Mr. LEGHORN. Absolutely. 

Ms. KIRKPATRICK. All right. And let me ask you too, then you are 

proposing safeguards. Do you think internal safeguards are better 

than some kind of external oversight in terms of enforcement? 

Mr. LEGHORN. In terms of the safeguards that were mentioned 

in the bill, we feel to a certain extent, it is necessary. We are just 

concerned about the messaging that it sends to the community, because it is—we are enforcing this safeguard only on the veterans 

small business community and we are not applying it to everyone 

else. 

Ms. KIRKPATRICK. And the singling, I understand that, that the 

small business veterans community is being singled out. 

Mr. LEGHORN. Yes. 

Ms. KIRKPATRICK. And I am concerned about that. I just was trying to bring it into a larger context, but thank you for your testimony. 

My last question is for you, Mr. Wilshusen. In your written testimony, you state that emphasizing that specific security related actions should be taken based on risk could help ensure that VA is 

better able to meet the objectives outlined in the draft bill. 

Would including a risk assessment make the specific actions addressed in the bill discretionary rather than mandatory on the VA? 

Mr. WILSHUSEN. It would make it based upon the risk because 

one of the factors that should go into risk management and security controls is the fact that every single control may not be appropriate in every single circumstance. And that according to FISMA, 

which is the overarching law for information security, agencies are 

supposed to perform risk assessments, and then design and implement security controls based on the effect or on the results of those 

assessments to assure that they are able to cause effectively reduce 

risks to an acceptable level. 

Now, there is judgment involved with those risk assessment and 

which controls should be in place. But federal guidelines specify 

that there are a number of security controls that should be considVerDate Aug 31 2005 08:29 Sep 09, 2015 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 Y:\87671.TXT PAT

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ered depending upon the significance or the categorization of the 

system which relates to the impact that could occur, should the information be compromised. 

But it does allow for some leeway because—in terms of determining when a control should be implemented and maybe not. You 

know, I think what the—many of the specific controls that are 

identified in the draft bill are based on sound security practices 

and are consistent with federal guidelines. 

But as I mentioned, building it in and to allowing and assuring 

that those controls are implemented on risk, and are intended to 

meet the security objectives with and allow some flexibility for 

those controls and security practice to evolve naturally over time 

as conditions change. 

Because a specific control that may be appropriate in one circumstance, that same control may not be appropriate in another 

circumstances due to the change in conditions. 

Ms. KIRKPATRICK. You know, it makes commonsense to me that 

the recent flexibility that, you know, Mr. Chairman, I have some 

concern about there not being some benchmarks to make sure it 

happens in a timely manner. Thank you very much, I’ve gone over 

a little bit, thank you for your indulgence. 

Mr. COFFMAN. Dr. Roe. 

Dr. ROE. Thank you, Mr. Chairman, just a couple of comments 

and a couple of quick questions. 

Mr. Wilton, if you would on the tissue banking, I agreed with— 

much what you said. Is there any reason for the VA not to do what 

is outlined in the draft? 

Mr. WILTON. I cannot come up with one, Congressman. I think 

it makes good sense, and I think that who better to make sure that 

we are protecting than the men and women who served this country so nobly. So I can come up with none. 

Dr. ROE. I agree with you, and I think one of the things that will 

happen ultimately, it will be unintended on anybody’s part, but we 

have seen where something happens and then there is a delay on 

notification of the veterans about this particular issue, and I have 

used these products before and there are tracking systems out 

there in the private world. 

Secondly, just briefly, are there any other accreditation other 

than what you mentioned, and I think one of the reasons it was 

left out in the draft legislation and maybe it should be put in, is 

are there other agencies that accredit not just that one? You said 

it is a private agency as I understand it, that does that accreditation. 

Mr. WILTON. Within the tissue banking profession, we are the 

only one. And quite frankly, considered the gold standard within 

health care. Most leading centers of medical excellence, as I mentioned in my testimony, will only source tissue from AATB-accredited banks. So we think again, why would the VA not want to get 

the best. 

Dr. ROE. Okay. Thank you and Mr. Binns, and also, Ms. 

Zumatto, just a couple of comments. 

One of my pet peeves in the practice of medicine over the years 

was, if we did not know what it was wrong with you, it was either 

in your head or was a virus, and we did not know. So I think that 


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basically what we need to do is exactly what you have said, and 

I think VA somewhat has done that, but to take the RAC, to get 

the Institute of Medicine to study this like you would any other 

issue and then come to a conclusion, whatever it is, and whatever 

the conclusion is. 

I could not agree more with that and to put this to bed, and as 

I want to thank our Chairman for his service at Desert Shield and 

Desert Storm, and there are many veterans out there that just 

would like to have an answer to this, an objective answer in an unbiased setting, so just a comment there. 

And, Mr. Kelley, just a couple of things. One, I agree and I think 

the VA did a great job of describing the design build and design 

bid build. Sometimes what you do if you have a design build process is you eliminate a lot of smaller builders who do not have an 

architect in house. Most of the design builders are big firms that 

have an in-house architect, and I can think of many instances in 

my area where very, very good builders could not bid on a design 

bid because they just did not—they are not big enough. 

And there are situations where it is—I mean, I have seen it in 

literally hundreds of millions of dollars worth of construction and 

the design bid build that works fine. And I just want to make that 

point that that is not the only point to do that, and the VA I think 

described that extremely well. 

And I guess my last question is to Mr. Wilshusen, what should 

the VA be doing now that they are not doing? I listened very carefully to your testimony and read it, but what—if they were doing 

something now, what would you say they need to implement right 

now for security? 

Mr. WILSHUSEN. I think it would be to redouble their efforts in 

resolving and mitigating and taking corrective actions on known 

vulnerabilities. They have a large number of outstanding security 

vulnerabilities that have been existing for quite some time. 

So taking actions right now to assess the risk of those, identify 

the most critical ones, and act on that and take corrective action 

immediately would be something that they should do. 

Dr. ROE. Yeah, I think we have noticed—I mean, we know that 

literally there are people trying to hack into these systems, foreign 

governments, I mean, we had that testimony right here in this 

committee, this subcommittee about that, and it is a moving target. 

I understand how—well, maybe I do not even understand how hard 

it is it is so complicated. 

But I guess the question I would have if they could implement 

anything now that would be effective, what should they do, because 

it is at every phase of government has it, private businesses have 

it, medical records, everything that we do on line is now being— 

I mean, really is vulnerable. 

Mr. WILSHUSEN. Well, it certainly is because what the—with the 

extensive use of information technologies across the federal governments, VA and other agencies too, if there is inherent risk with the 

use of those technologies, particularly as it becomes more interconnected with other systems, other organizations, external and internal to each department. 

But the one thing that—you know, there is a number of things 

that agencies and VA needs to do, and one of the first things in 


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terms if shoring up and making sure, for example, that they take 

corrective actions to assure that the systems that they operate 

have the appropriate patches installed, that they implement the 

appropriate security controls that harden to prevent and limit access to their systems. 

But again, it gets back on—— 

Dr. ROE. Well, do they need legislation to do that or could they 

just do that now? 

Mr. WILSHUSEN. They should be doing it now, but apparently in 

the VA’s case, they may need this legislation, the proposed bill, 

may help prompt them to refocus their efforts to take the necessary 

actions to protect their systems. 

Dr. ROE. Thank you. I yield back. 

Mr. COFFMAN. Thank you, Dr. Roe. Ms. Walorski. 

Ms. WALORSKI. Thank you, Mr. Chairman. 

Mr. Wilshusen, will the—with all the weaknesses that you have 

cited in the conversation that you and Dr. Roe just had, has the 

VA made any improvements to its information security program? 

Mr. WILSHUSEN. Well, according to the OIG at VA, the Department has taken steps to implement a continuous monitoring program, as well as to standardize many or several of their security 

configurations. 

And if those are designed and implemented effectively, that could 

result in some security benefits. But as you may know, we have 

been asked by this subcommittee to review the weaknesses and 

vulnerabilities of the Department of VA for—on their information 

security. 

We plan on looking at the extent to which those vulnerabilities 

continue to exist, the extent to which VA has taken actions to mitigate them, and the extent to which those vulnerabilities help expose veterans’ information and to compromise. 

And so I will have more on that issue for you later as we complete that particular review. It is—we are just starting it at this 

point. 

Ms. WALORSKI. So this is your first review of their internal security documents? 

Mr. WILSHUSEN. Not the first—at the present time, yes. 

Ms. WALORSKI. Uh-huh. 

Mr. WILSHUSEN. Yes, we—for years, we have reviewed information security at the time. 

Ms. WALORSKI. Right. 

Mr. WILSHUSEN. But for this particular effort and these 

vulnerabilities, yes, we are just starting that this year. 

Ms. WALORSKI. And given the current federal information and security requirements and VA’s known material weaknesses, do you 

believe that this IT directive can assist VA in addressing those 

weaknesses if implemented? 

Mr. WILSHUSEN. Yes. You know, I think these actions identified 

in the directive are intended to address known vulnerabilities that 

exist in VA now. And so to the extent that they take those actions 

again on a risk based basis, that it should help VA improve its security. 

Ms. WALORSKI. And well just to echo Dr. Roe’s comment and your 

comment as well, is legislation needed. I honestly having sat on 


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this committee think that it is a directive that has to be implemented at this point because there is no voluntary compliance. 

So the mere suggestion from Congress asking and asking and 

asking, and then having your department follow up and the reports 

continually come back with vulnerabilities, vulnerabilities, 

vulnerabilities, you know, I mean, it is just my opinion our veterans deserve more. 

There are so many people that come in here and testify on so 

many different issues, and I appreciate all of your testimony today, 

but when it comes to protecting identities and health care records, 

and you know, there isn’t a day that goes by in the local news and 

national news where we are not talking about protecting the most 

important data that we all have, which is our identity, and now in 

this case, health records, and now we are talking domain controllers and we are asking questions about foreign entities having access. 

I just—to me, I just think there is an urgency involved, so I appreciate the work that you do and all of you in your testimony 

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

Mr. COFFMAN. Thank you, Ms. Walorski, Mr. Huelskamp. 

Dr. HUELSKAMP. Thank you, Mr. Chairman. Mr. Leghorn, I appreciate your testimony. I appreciate the executive committee on 

their resolution that endorsed efforts such as these to make certain 

that the contracts are awarded to companies that are truly entitled 

to receive these set asides. I think that is very critical. I appreciate 

your efforts on that, and my office is more than willing to—if you 

hear of examples and cases that perhaps the VA has not acted on 

quickly enough, let us know, and we would be happy to look into 

those as well. 

Because I think if we are going to have a program such as this, 

we can do everything we can to make certain that it goes to veterans. I appreciate that. 

I do have one small question for the gentleman from the GAO 

in reference to apparently twelve years of reports and studies and 

I congratulate my colleague for introducing the bill, but I will say 

the testimony we heard in this subcommittee about how vulnerable 

the system was and is has probably been the most shocking I have 

heard on this committee in over three years. And I appreciate the 

efforts and I know my colleague asked the question, do you think 

they are making progress, and it is not nearly enough. 

But do you have any evidence or ability to share that will give 

us an example of if we compared this to a private sector entity, 

what standard we’re meeting out in the world outside of government, in terms of meeting those security requirements? 

Because I vow to my colleagues that I always want to talk about 

these private companies, and rightly so that are not secure enough 

with data, and then we have the shocking reports of 20 million veterans and their families and their medical records, financial 

records were hacked. The VA refused to—actually said it did not 

occur, and a whistle blower said otherwise. 

But is there a standard we can look at, and say here we are compared to the private sector? 


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Mr. WILSHUSEN. Well, in terms of the information security requirements that federal agencies are to implement, they tend to be 

as stringent as those perhaps available to the private sector. 

You know, one can look at the news media and we have not examined the security controls at very many private sector companies. When we have, we have identified vulnerabilities that also 

puts those entities’ information at risk. But you can look at the papers and just with Target and a number of other companies, there 

are security breaches across the board. 

Many are reported, many are not. It is just emblematic I think 

of the fact that—and it is required, that agencies, private companies need to protect the information. It is a challenging proposition. 

There are many things that can be done to help raise the bar in 

protecting that information. Many of the actions identified in the 

draft bill are among those types of controls if implemented on a 

risk based basis. 

And—but it is something that is a fact of life in our environment, 

and it is in large part because agencies—I will not say agencies 

have not taken it seriously, but you are right, there is much more 

that needs to be done in order to adequately protect the information that those individuals who provide their sensitive personal information to agencies entrust and deserve. 

Dr. HUELSKAMP. All right. I yield back. Thank you, Mr. Chairman. 

Mr. COFFMAN. Thank you, Mr. Huelskamp. Thank you. The 

panel is now excused. I again want to thank everyone for their participation today. The input and feedback provided is an important 

contribution at this subcommittee—as this subcommittee crafts legislation to improve the quality of service VA provides to our nation’s veterans. 

With that, I ask unanimous consent, that all members have five 

legislative days to revise and extend their remarks, and include extraneous materials. With no objection so ordered, this hearing is 

now adjourned. 

[Whereupon, at 11:45 p.m., the subcommittee was adjourned.] 


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f 

APPENDIX 

PREPARED STATEMENT OF MS. STELLA S. FIOTES

Good morning, Mr. Chairman, Ranking Member Kirkpatrick, and other Members 

of the Subcommittee. Thank you for the opportunity to be here today to provide the 

Department of Veterans Affairs (VA) views on pending legislation affecting VA’s 

programs, including H.R. 3593, the VA Construction Assistance Act of 2013 and a 

draft bill regarding the oversight of contracts awarded by VA to small business concerns owned and controlled by Veterans with service-connected disabilities. 

Other bills on today’s agenda were not received in time for VA to provide testimony here today, but we will be following up with the Subcommittee for the record 

at a later time. Those bills include H.R. 4261, regarding VA research on Gulf War 

illness and a draft bill regarding VA’s information security programs 

Mr. Chairman, accompanying me here today is Mr. Tom Leney, Executive Director for Small and Veteran Business Programs for VA. 

H.R. 3593, the VA Construction Assistance Act of 2013 

Section three of the bill would institute certain requirements for VA major medical facility projects, including mandates for the use of a medical equipment planner, 

use of a project management plan, and use of a construction peer excellence review. 

It would also require development of a metrics program to enable the monitoring 

of change-order processing time and goals for the change order process consistent 

with the ‘best practices’ of other federal agencies. 

Section four of the bill would mandate that within 180 days VA enter into an 

agreement with the U.S. Army Corps of Engineers (USACE) to procure a ‘‘special 

project manager’’ on a reimbursable basis to oversee three named current VA major 

construction projects for facilities in Denver, Colorado, Orlando, Florida, and New 

Orleans, Louisiana. The bill enumerates the duties of the special project manager 

and requires that plans and progress reports be provided to the House and Senate 

Committees on Veterans’ Affairs. It also establishes that VA provide the special 

project manager with the requisite information and administrative assistance necessary to carry out their tasks. 

VA has a strong history of delivering facilities to serve Veterans. In the past 5 

years, VA has delivered 75 major construction projects valued at over $3 billion that 

include the new medical center complex in Las Vegas, cemeteries, polytrauma rehabilitation centers, spinal cord injury centers, a blind rehabilitation center, and community living centers. 

VA appreciates the strong interest and support from the Subcommittee to ensure 

that our major construction projects, and more specifically the Denver, Colorado, 

New Orleans, Louisiana, and Orlando, Florida facilities, are delivered successfully. 

While there have been challenges with these projects, we have taken numerous actions to strengthen and improve our execution of all VA’s ongoing major construction projects, including the three projects that H.R. 3593 addresses. For the reasons 

expressed below, VA does not believe that the approach outlined in the bill will 

achieve the desired results, and thus does not support it. 

VA believes the creation of a special project manager would be problematic in the 

management and supervision of these projects. Specifically, the special project manager adds more levels of management and may complicate, if not confuse, the 

project delivery process. The bill raises serious questions about the contractual relationship between the VA and its contractor, the lines of authority the special project 

manager will have vis-&-vis VA and the U.S. Army Corps of Engineers (USACE), 

and the effect upon the independent exercise of discretion by the VA contracting officer, who is ultimately responsible for managing the contract on behalf of the Government. The legislation we believe will also lead to increased management and 

overhead costs associated with funding the special project manager and support 

team. 

VA continuously evaluates its processes and delivery methods for each lease and 

construction project on its merits, and we benchmark industry best practices with 

several agencies including the National Institute of Building Sciences, General Services Administration and the USACE. When VA determines that the best delivery 

strategy is to employ another agency such as the USACE, this strategy is used. VA 

and the USACE have a long history of working together to advance VA facility construction and share best practices, and our current discussions are a logical evolution of that relationship. 


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Since 2008, VA has engaged USACE to support maintenance and minor construction projects at more than 70 of our medical facilities. VA engaged USACE to review 

the contracts for the New Orleans and Denver projects, and they continue to assist 

in schedule evaluation in Orlando. More recently, USACE is supporting VA in establishing a Project Review Board process, similar to the process used by USACE districts, and supporting the VA National Cemetery Administration in its maintenance 

and minor construction program. 

As outlined in the cited Government Accountability Office (GAO) testimony and 

April 2013 report, the delays and cost increases on the Denver, New Orleans and 

Orlando projects occurred in the planning and design phases; each of these projects 

is now in the construction phase. Last year, VA took aggressive action on the recommendations in the April 2013 GAO report and all recommendations were closed 

as of September 2013. Their recommendations included the addition of medical 

planners, the streamlining of the change order process, and clearer definition of 

roles and responsibilities in the project management. 

In addition to closing the GAO recommendations, VA has worked diligently to address and close all of the recommendations identified through the VA’s Construction 

Review Council (CRC), which was established in 2012 and is chaired by the Secretary of Veterans Affairs to serve as the single point of oversight and performance 

accountability for the VA real property capital asset program. With the personal 

commitment of the Secretary, and the diligent efforts of senior staff and management, all CRC recommendations have been implemented since October 2013. These 

recommendations include improvements in the development of requirements, measures aimed at improving design quality, better coordination of funding across the 

Department to support VA’s major construction program, and advances in program 

management and automation. Through the CRC and the VA Acquisition Program 

Management Framework that provides for continual project review throughout the 

project’s acquisition life-cycle, VA will continue to drive improvements in the management of VA’s real property capital programs. 

Our focus across the spectrum of construction project management has led to advancements in our overall construction program. Areas of increased effort include 

improving requirements definition and acquisition strategies, assessing project risk, 

assuring timely project and contract administration, partnering with our construction and design contractors, early involvement of the medical equipment planning 

and procurement teams, and engaging in executive level on-site project reviews. Additionally, the monthly updates provided to the Committees on key projects have increased the transparency in our program. 

The way the Department is doing business today has changed significantly since 

the Orlando, Denver and New Orleans projects were undertaken. The lessons 

learned and the improvements made have resulted in positive changes and are 

being applied to help ensure the Department’s capital program is delivered on time 

and within budget. 

The costs associated with enactment of this legislation cannot be predicted with 

specificity, as they will depend on the scope and details of the arrangement mandated to be concluded with the USACE under the bill. 

Draft Bill to Amend Title 38, United States Code, to Improve the Oversight of Contracts Awarded by the Secretary of the Department of Veterans Affairs to Small 

Business Concerns Owned and Controlled by Veterans With Service-Connected Disabilities 

Section one of the draft bill proposes to amend subsection (e) of § 8127 to create 

a second requirement to eligibility for status as a Service-disabled Veteran-owned 

Small Business (SDVOSB). The newly inserted subsection (2) would provide that 

SDVOSBs may only be awarded set-aside contracts when, in addition to the requirements of verification, the SDVOSB submits a statement to VA explaining how the 

concern would meet applicable self-performance requirements to conduct 51 percent 

of work themselves, identifying employees who will be working on the contract and 

the work the employees will carry out under the contract, and the percentage of 

such work as compared to the total amount of work performed under the contract. 

The bill would also amend subsection (g) of section 8127 regarding penalties by 

granting the Secretary authority to make a determination that a SDVOSB did not 

act in good faith with respect to the performance requirements of the contract regarding the requirement to have their own employees perform at least 51 percent 

of the work requirements. If that determination is made, the Secretary would retain 

amounts awarded under the contact in the same manner and amount as if the small 

business concern failed to comply with approved subcontracting plans, which appears to be a reference to provisions concerning liquidated damages for failure to 

make a good faith effort to comply with a subcontracting plan, found at 15 U.S.C. 


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§ 637(d)(4)(F) and 48 CFR § 19.705–7. Lastly, the new statement required by the 

bill would be subject to the criminal false statements statute, 18 U.S.C. § 1001. 

VA shares the Committee’s concerns that Veterans perform the required percentages of work on set aside contracts. To that end VA contracting officers monitor the 

amount of work passed to subcontractors in accordance with the Federal Acquisition 

Regulations. In addition, VA has established a Subcontracting Compliance Review 

Program (SCRP) which assesses contractor compliance with limitations on subcontracting requirements, subcontracting commitments, and subcontracting goals included in prime contracts with VA. 

We appreciate the Committee’s interest in the integrity of these important programs, but for the reasons set forth below, VA does not support the draft bill. 

The requirements of this bill would be impractical, as many awardees will not 

have all the required information (such as names and amount of work to be performed) at the time of bid or offer, or even at the time of award. 

We are also unclear whether the bill as drafted would only apply to SDVOSBs, 

as 38 U.S.C. § 8127 authorizes Veteran-owned Small Business set-asides within VA 

as well as SDVOSB set-asides. 

Finally, VA believes that the provisions of this bill will place an onerous and unfair burden on SDVOSBs that is not placed on any other socioeconomic category of 

small business. 

VA will provide its cost estimate for this bill for the record. 

Conclusion 

Mr. Chairman, this concludes my statement. Thank you for the opportunity to appear before you today. We would be pleased to respond to questions you or the other 

Members of the Subcommittee may have. 


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PREPARED STATEMENT OF RAYMOND C. KELLEY

Mr. Chairman and Members of the Subcommittee: 

On behalf of the men and women of the Veterans of Foreign Wars of the United 

States (VFW) and our Auxiliaries, I would like to thank you for the opportunity to 

testify on today’s pending legislation. 

H.R. 3593, VA Construction Assistance Act of 2013 

It is well documented that the Department of Veterans Affairs (VA) struggles to 

complete major medical facility construction projects on time and on budget. Currently, VA has an average project delivery delay of 35 months and average cost 

overruns of more than $300 million. 

VA is in the process of building three medical centers, each of which has been 

met with their own unique problems that have frustrated veterans who live in the 

communities and rely on the medical service of the VA, and have caused VA to lose 

time and money that could have been used on other projects. VA has a list of major 

construction projects that will cost more than $20 billion. Every effort must be made 

to ensure every dollar is used efficiently, so VA can close these major construction 

gaps. H.R. 3593 puts recommendations in place that will help VA achieve these 

goals. 

Section 3 of this bill calls for five specific reforms in VA’s Major Medical Facility 

Construction process. These reforms call on the Secretary to: 

• Use medical equipment planners from the onset of a major medical facility 

construction project. 

• Develop and use a project management plan to improve communication 

among all parties involved. 

• Put construction projects under peer excellence review. 

• Develop a metric to monitor change-order processing times and ensure the 

process meets other federal department and agency best-practices. 

• Use a design-build process when possible. 

VA wants to equip its facilities with the most up-to-date equipment. However, 

procuring medical equipment after the design of the facility inevitably causes building delays while the designs are redrawn, and in some cases demolition and reconstruction have taken place to accommodate the newly purchased medical equipment. 

The VFW believes VA would benefit from the use of medical equipment planners. 

Using these planners, which is an industry practice used by the Army Corps of Engineers and other federal agencies, places an experienced medical equipment expert 

at the disposal of the architect and construction contractor. When used properly, a 

medical equipment planner can work with the architect during the design phase and 

then the construction contractor during the build phase to ensure needed space, 

physical structure and electrical support are adequate for the purchased medical 

equipment, reducing change orders, work stoppages, and the demolition of newly 

built sections of a facility. 

Using a medical equipment planner can reduce schedule delays and cost overruns. 

Using the Orlando facility as an example, issues with the purchase of medical 

equipment caused cost overruns of more than $10 million and construction had to 

be suspended until the issues were resolved. 

Poor communication within VA and between VA and the general contractor has 

also led to delays and cost over-runs. There have been cases identified where separate VA officials have provided contradictory orders to the general contractor, where 

one VA employee authorized the continuation or start of a new phase of building, 

while another VA employee gave the order not to continue or start a particular 

phase. This lack of VA project management coordination led to a portion of the Orlando, Florida facility to be built then removed. 

By developing and using a project management plan, all parities at the onset of 

the project will have a clear understanding of the roles and authorities of each member of the project team. Included in the plan will be clear guidance on communication, staffing, cost and budget, as well as change-order management. 

Construction peer excellence reviews are an important aspect of maintaining a 

high level of construction quality and efficiency. When used, these review teams are 

made up of experts in construction management who travel to project sites to evaluate the performance of the project team. These meetings provide important feedback—a separate set of eyes—on the project management plan to ensure a plan is 

in place to make the project come in on time and on budget. 

VA has historically relied on the design-bid-build project delivery system when entering into contracts to build major medical facility projects. Sixty percent of current 

VA major medical facility projects use design-bid-build. With this model, an archiVerDate Aug 31 2005 08:29 Sep 09, 2015 Jkt 000000 PO 00000 Frm 00057 Fmt 6621 Sfmt 6621 Y:\87671.TXT PAT

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tect is selected to design a facility, the design documents are used to secure a bid, 

and then the successful contract bid holder builds the facility. 

Design-bid-build projects often encounter disputes between the costumer—VA in 

this case—and the construction contractor. Because these contracts are generally 

firm-fixed-price, based on the completed design, the construction contractor is usually responsible for cost overruns, unless VA and the contractor agree on any needed 

or proposed changes that occur with a change of scope, unforeseen site condition 

changes or design errors. VA and the contractor negotiate these changes through 

change orders. This process can become adversarial, because neither party wants to 

absorb the cost associated with the change, and each change order can add months 

to the project completion date. 

A design-build project teams the architectural/engineering company and the construction contractor under one contract. This method can save VA up to six months 

of time by putting the design phase and the construction performance metric together. Placing the architect as the lead from start to finish, and having the prime 

contractor work side-by-side with the architect, allows the architect to be an advocate for VA. Also, the architect and the prime contractor can work together early 

on in the design phase to reduce the number of design errors, and it also allows 

them to identify and modify the building plans throughout the project. The VFW 

agrees with the recommendations outlined in Section 3 of this legislation. 

Section 4 provides for a special project manager for the on-going construction 

projects in Denver, Colorado, Orlando, Florida, and New Orleans, Louisiana. This 

section calls on VA to enter into an agreement with the Army Corps of Engineers, 

so the Corps can provide a special project manager to conduct oversight of the construction operations regarding compliance with acquisition regulations, and monitor 

the relationship of VA and the prime contractor. It will also authorize the Corps to 

assist in construction related activities, such as change-order requests, and provide 

guidance on developing best practices in overall project operations. 

The VFW supports this provision, but it should be seen as a stop-gap measure 

to help VA to quickly complete these three outstanding major construction projects, 

and systems must be put in place to ensure VA can function under similar guidance 

without the assistance of the Corps on future projects. 

It is important for VA to become more efficient at facility construction. Veterans 

have expectations that medical facilities will be available when VA first states what 

the completion date will be. It is obvious by looking at the number of delays and 

cost overruns that the contracting and building procedures that VA currently uses 

are antiquated and are costing VA millions of dollars more for each project; and 

causing five to six year delays in much needed medical facilities. By passing this 

legislation, VA will gain better oversight, cost controls and more efficient procedures 

for future construction projects. 

Mr. Chairman, this concludes my remarks and I look forward to any question you 

or the Committee may have. 

Information Required by Rule XI2(g)(4) of the House of Representatives 

Pursuant to Rule XI2(g)(4) of the House of Representatives, VFW has not received 

any federal grants in Fiscal Year 2013, nor has it received any federal grants in 

the two previous Fiscal Years. 


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