The Department of Veterans Affairs’ FY 2007 Asset Management Plan (AMP)

The Department is committed to supporting the President’s Management Agenda and 

the Federal Real Property Asset Management Initiative. The AMP details how VA 

complies with Executive Order 13327 and fully reflects the Federal Real Property 

Council’s current guiding principles and elements, which are essential for an effective 

federal asset management plan. 

By employing best business practices and maximizing the functional and financial value 

of our capital assets through well thought-out acquisitions, allocations, operations, and 

dispositions, VA will also continue to ensure that all capital investments are based on 

sound business principles and — most importantly — meet our veterans’ health care, 

benefits, and burial needs. 

Asset Management Plan FY 2007

 i

Table of Contents 

Executive Summary................................................................................................................1 

 Strategic Vision....................................................................................................................1 

 Manage What We Have Most Effectively .......................................................................1 

 Make Prudent Investments................................................................................................3 

 Measure Performance...................................................................................................3 

 Disposal ..........................................................................................................................4 

Chapter 1: Overview of VA ..................................................................................................5 

 Introduction .........................................................................................................................5 

 Overview of VA ..................................................................................................................7 

 Table 1-1: VA Capital Asset Inventory .....................................................................8 

 Agency Mission and Strategic Goals................................................................................9 

 Governance of VA’s Capital Management....................................................................10 

 Table 1-2: Thresholds for Capital Investments Requiring SMC Approval.........10 

 VA Capital Investment Panel....................................................................................11 

 Monthly Performance Review ..................................................................................11 

Chapter 2: VA’s Capital Assets ..........................................................................................13 

 VA’s Asset Classes............................................................................................................13 

 The Life-Cycle Approach.................................................................................................14 

 Figure 2-1: Capital Investment Life Cycle ...............................................................15 

 Formulation Stage.......................................................................................................15 

 Functional Development Phase ...........................................................................15 

 OMB 300 Application Business Case .............................................................15 

 Strategic Linkage...............................................................................................15 

 Alternatives Considered ..................................................................................16 

 Table 2-1: Potential Alternatives...............................................................17 

 Cost-Effectiveness Analysis.............................................................................17 

 Risk Analysis .....................................................................................................17 

 Technical Review Phase........................................................................................18 

 Strategic Review Phase..........................................................................................18 

 VA Capital Investment Decision Models ...........................................................18 

 Execution Stage ...........................................................................................................19 

 Steady State Stage .......................................................................................................20 

 Disposal Stage..............................................................................................................21 

Chapter 3: VA’s Capital Portfolio, Valuation and Funding...........................................23 

 Book Value ........................................................................................................................23 

 Plant Replacement Value................................................................................................23 

 VA’s Capital Asset Funding Mechanisms....................................................................24 

 The Appropriations Process ...........................................................................................24 

 Major Construction.....................................................................................................24 

 Accomplishments........................................................................................................24 

 Challenges....................................................................................................................24 
Asset Management Plan FY 2007

 ii

 Minor Construction......................................................................................................25 

 VA’s Capital Asset Budget Request Mechanisms ........................................................26 

 Maintaining VA’s Assets through Development of VA Facility 

 Sustainment Model ......................................................................................................26 

 VA Sustainment Model ..........................................................................................26 

 Non-Recurring Maintenance .................................................................................27 

 Deferred Maintenance ............................................................................................27 

 Use of Facility Condition Assessments................................................................28 

 Infrastructure Protection........................................................................................29 

 Performance and Accountability Reports............................................................29 

 Recurring Maintenance Program..........................................................................30 

 Five-Year Capital Plan............................................................................................30 

Chapter 4: VA Performance Metrics & Evaluation Methodology .................................33 

 VA Capital Portfolio Goals ..............................................................................................33 

 Federal Real Property Council ........................................................................................34 

 FRPC Guiding Principles ............................................................................................35

 Federal Real Property Council Performance Metrics ..................................................35 

 Capital Asset Benchmarking ...........................................................................................37 

 Lease Benchmarks........................................................................................................37 

 Internal Benchmarks....................................................................................................38 

 Energy Benchmarks .....................................................................................................39 

 Table 4-1: VA Facilities: Internal Energy Asset Performance Benchmarking ...39 

 External Benchmarking ....................................................................................................40 

 Real Property and Energy Management Scorecards ...................................................41 

 Real Property Performance Results................................................................................41 

 Table 4-2: Real Property Performance Results........................................................42 

Chapter 5: Disposal...............................................................................................................45 

 VA’s Disposal Authority..................................................................................................45 

 VA’s Disposal Policy.........................................................................................................45 

 Enhanced-Use Leasing Program.....................................................................................46 

 EU Authority.................................................................................................................47 

 Benefits to VA ...............................................................................................................47 

 Benefits to Developers and Local Community ........................................................48 

 Transparency ................................................................................................................48 

 Project Types.................................................................................................................48 

 Recent Enhanced-Use Lease Successes ..........................................................................49 

 Fort Howard, MD – Life Care Community..............................................................49 

 Leavenworth Mixed-Use Development....................................................................49 

 Current Enhanced-Use Leasing Projects........................................................................50 

 Secretary’s Approved Priority List............................................................................50 

 Awarded Enhanced-Use Leases.................................................................................50 

 Capital Asset Realignment for Enhanced Services.......................................................50 

 CARES Re-Use Studies.....................................................................................................51 

 Background ....................................................................................................................51 
Asset Management Plan FY 2007

 iii

 Table 5-1: CARES Stage 2 Site Status .................................................................... 52 

 Federal Asset Sales Initiative................................................................................... 53 

 Background........................................................................................................... 53 

 Current VA Environment/Process.................................................................... 53 

Chapter 6: Management Tools and Initiatives............................................................... 55 

 Capital Asset Management System............................................................................. 55 

 Reporting.................................................................................................................... 56 

 VA Human Capital Strategy ................................................................................... 57 

 Training ................................................................................................................. 57 

 Guidance and Policies ......................................................................................... 58

 Energy Initiative............................................................................................................. 59 

 Background................................................................................................................ 59 

 Changing Policy Landscape .................................................................................... 59 

 Energy Management Program..................................................................................... 60 

 Energy Management Task Force and Action Plan............................................... 60 

 Reporting.................................................................................................................... 61 

 Benchmarking............................................................................................................ 61 

 Resources.................................................................................................................... 61 

 VA Energy Program Management......................................................................... 61 

 VA Created National Energy Contracting Office................................................. 62 

 Sustainability/Alternative Fuel Vehicles .............................................................. 62 

 Collaboration with Department of Defense............................................................... 62 

 VA/DoD Joint Strategic Plan ....................................................................................... 63 

Chapter 7: Recent Accomplishments and Future Goals............................................... 65 

 Recent Accomplishments.............................................................................................. 65 

 Current and Future Goals/Milestones ....................................................................... 69 

 FY 2007........................................................................................................................ 69 

 FY 2008........................................................................................................................ 71 

 Future Federal Real Property Asset Management Goals......................................... 72 

 Decision Analytics .................................................................................................... 72 

 Legislative Agenda ................................................................................................... 72 

 Inter- and Intra- Agency Coordination.................................................................. 73 

Chapter 8: Conclusion ....................................................................................................... 75 

Appendices: 

 Appendix A: Capital Decision Criteria...................................................................... 77 

 Appendix B: Capital Investment Decision Models.................................................. 78 

 Appendix C: Actual and Planned Disposals............................................................. 81 

 Appendix D: Enhanced-Use Lease Projects .............................................................. 84 

 Appendix E: CARES Major Construction Status...................................................... 89 

 Appendix F: References ............................................................................................... 90 

Asset Management Plan FY 2007

 1

Executive Summary

The Department of Veterans Affairs’ (VA) capital asset program manages and 

maintains the Department’s current and future assets according to the guidelines and 

requirements of OMB Circular A-11, the Federal Real Property Council (FRPC), the 

Federal Acquisition Streamlining Act, and the Government Performance and Results 

Act (GPRA). Each of these guidelines have distinct requirements that VA has 

incorporated into polices for acquiring and managing capital assets. The major 

elements of these guidelines are: 

1. Strategic vision; 

2. Manage what we have most effectively; 

3. Make prudent investments; 

4. Measure performance; and 

5. Dispose or reuse assets we no longer need. 

Strategic Vision 

VA has both health care and non-health care assets. CARES (Capital Asset 

Realignment for Enhanced Services) is a system-wide process for VA to meet the 

current and future health care needs of veterans in modern health care facilities. It is 

the most comprehensive analysis of VA’s health care infrastructure that has ever been 

conducted. CARES serves as VA’s plan for the future. VA matches future needs and 

services with current assets and manages assets to meet these mission needs based on 

CARES projections. Annual updates with new forecasts of future demand have been 

incorporated in VA’s strategic planning process. CARES studies have been 

completed on all VHA sites except for 18 identified sites for follow-up analysis and 

studies. Selected capital projects to implement CARES can be found in Appendix E. 

CARES follow-up studies provide recommendations to VA regarding the best 

approach to provide current and future veterans with equal or better healthcare than 

is currently provided, while maximizing any potential reuse or redevelopment of all 

or portions of the property. 

Assets that are not related to the CARES process are Non-CARES. Assets for this 

classification are acquired and managed utilizing unique characteristics of the 

National Cemetery Administration (NCA), the Veterans Benefits Administration 

(VBA), and Staff Offices. All assets match needs with their respective missions, and 

are evaluated and scored through processes similar to CARES. 

Manage What We Have Most Effectively 

VA’s capital asset management program emphasizes ensuring capital investments 

fully support the agency mission and strategic goals across all administrations within 
Asset Management Plan FY 2007

 2

the Department. VA uses a life-cycle approach to manage and maintain its assets. A 

life-cycle management approach develops and monitors asset performance using 

operational and financial criteria. There are four stages in the life-cycle of capital 

assets; formulation, execution, steady state and disposal. 

The formulation stage of a project includes all of the following: identifying a need, 

concept definition, business case development, technical and strategic review, 

business case approval, funding authorization and budget appropriation. The 

execution stage of the life-cycle includes the project award through build-out; steadystate stage is maintenance in the operational state; and the disposal stage is the final 

stage in the life-cycle where assets are retired or disposed of. 

VA determines the necessary level of resources to maintain its assets through its 

sustainment model. The sustainment model is used within the steady-state stage of 

an asset’s life-cycle. “Sustainment cost” can be defined as the provision of resources 

for maintenance and repair activities necessary to keep the current inventory from 

further deteriorating. It does not address critical systemic deficiency in the current 

inventory infrastructure. Sustainment in VA will address necessary maintenance 

expenses below the minor construction program threshold. Taking into account the 

recent CARES studies and emphasis on vacant space, the VA model substantially 

decreases cost factors for vacant and common spaces. The formula used to derive the 

requirement for VA sustainment is discussed on page 27. 

VA must also account for facility deferred maintenance. Deferred maintenance 

includes correction costs/repair needs for any VA owned building to improve poor 

condition (at the end of useful lifespan failure is not critical) and critical condition 

(requires immediate attention). VA’s total deferred maintenance needs are 

approximately $5 billion dollars as supported by the VA’s current and comprehensive 

Facility Condition Assessment (FCA) Report. 

The Department is taking steps to address the current backlog by: 

• Providing $2.5 billion in funding to upgrade, maintain, or replace existing 

facilities. 

• Fully funding the sustainment needs in the FY 2007 ($517 million) and FY 

2008 ($573 million) budget requests. The sustainment model estimated that 

VA needs approximately $500 million annually to fund these needs. 

• Refining asset condition information, reconciling FCA and financial 

statement deferred maintenance costs, and taking into account all of our 

disposals and investments in the pipeline. A revised assessment of need 

and an updated strategy to address the backlog figure will be completed in 

the summer of 2007. 
Asset Management Plan FY 2007

 3

Make Prudent Investments 

VA develops and implements capital asset management tools and initiatives in order 

to improve asset management to ensure all capital investments are based on sound 

business principles and – most importantly – meet our veterans’ health care, benefits, 

and burial needs. 

• OMB Exhibit 300/Business Case Applications: Business cases include 

detailed project description and justification, with a focus on strategic 

alignment; implementation information; cost and schedule information; 

alternatives considered; cost-effectiveness analysis; and risk analysis. 

• VA Capital Investment Decision Models: The capital investment decision 

models used by VA provide a structure to evaluate capital investment 

proposals. The VA Capital Investment Panel (VACIP) uses the models and 

decision software to evaluate investment proposals and score each proposal 

that has passed the validity assessment. The scores are generated by 

decision software and result in a list of investments ranked in priority 

order. These scored proposals then are presented to the SMC for 

recommendation to the Secretary for inclusion in the annual budget 

submission. 

As a result of the capital investment process for CARES, VA has 36 fully or partially 

funded major construction projects from FY 2004-2007. Of these 36 projects, North 

Chicago is physically complete. There are two projects that meet the definition of 

CARES but are funded outside the CARES investment process. These two projects 

are Gulfport and New Orleans, and they received emergency appropriations due to 

Hurricane Katrina. The total cost of the 38 projects is $4.7 billion and $2.7 billion has 

been appropriated for CARES major construction requirements. 

Measure Performance

The Department tracks the performance of assets such as construction projects, 

throughout their operational life spans. VA monitors the time schedules and costs of 

active projects and compares them against the planned schedule. Project measures 

are important to ensure projects are completed on time and in a cost-effective manner. 

They also provide early alerts of unnecessary delays and/or cost overruns. 

The performance of VA’s operational assets is measured against VA’s capital portfolio 

goals and Federal Real Property Council (FRPC) measures. Aligned with the FRPC 

measures, the VA capital portfolio goals are based on the Department’s main 

objective to manage assets in a way that ensures resources are maximized, assets 

(including VA staff and veterans) are safeguarded, and all opportunities (public, 

private, or a combination thereof) are fully explored. The goals allow VA senior 
Asset Management Plan FY 2007

 4

management to monitor the overall health of the Department’s capital asset portfolio 

and provide for informed corporate decision-making. 

Additionally, VA measures asset performance in comparison to that of the private 

sector via benchmark analysis. VA’s Capital Asset Management System (CAMS) 

provides the means and data to compare certain asset expenses to industry or 

commercial benchmarks for its leasing and energy programs. Benchmarking is also 

done within VA and encompasses comparisons across fiscal years and comparisons 

between VA facilities. 

Disposal

When an asset is determined to be no longer needed, VA looks to dispose of or reuse 

it. VA’s real property disposal policy provides a standard methodology and criteria 

for identifying appropriate underutilized assets for divestment. Disposal is the final 

stage in the life cycle of an asset. 

When a property is proposed for disposal, other VA entities are given the 

opportunity to express interest in it for an alternative use. Other disposal modalities 

are also evaluated in priority order including enhanced-use leasing, sharing, outleasing, licenses, permits, easements and transfers (i.e., disposal via enhanced-use 

leasing authority, capital asset fund, state home, and GSA authority) as well as likekind exchanges. If none of these options is viable, the property will become available 

for reuse by other federal agencies. If no other agency is interested, VA may utilize 

deconstruction, mothballing and demolition. 

 

Under the enhanced-use leasing authority, VA may lease land or buildings to the 

private sector for up to 75 years. The leased property may be developed for non-VA 

uses that are consistent with the mission of the Department. The leased property may 

be developed for non-VA and/or VA uses, and in return for the lease, the Department 

obtains fair value in the form of revenue, facilities, space, services, or other 

considerations. 
Asset Management Plan FY 2007

 5

CHAPTER 1: OVERVIEW OF VA 

Introduction 

VA has a vast holding of diverse capital assets consisting of VA-owned buildings 

and real estate, VA-leased buildings, enhanced-use and sharing agreements 

pertaining to capital assets, and major equipment. Assets include hospitals, clinics, 

cemeteries, office buildings, and medical and non-medical equipment. VA has 

implemented its capital asset management philosophy based on the Government 

Performance and Results Act (1993); Federal Acquisition Streamlining Act (1994); 

OMB’s Capital Programming Guide (Appendix 13 of OMB Circular A-11); Executive 

Order 13327, Federal Real Property Asset Management; Executive Order 13423, 

Strengthening Federal Environmental, Energy, and Transportation Management; and 

other Federal initiatives. 

• Government Performance and Results Act (1993): The Government 

Performance and Results Act (GPRA), holds federal agencies accountable for 

using resources wisely and achieving program results. GPRA requires agencies 

to develop plans for what they intend to accomplish, measure how well they 

are doing, make appropriate decisions based on the information they have 

gathered, and communicate information about their performance to Congress 

and to the public. 

GPRA requires agencies to develop a five-year Strategic Plan, which includes a 

mission statement and long-term goals and objectives; Annual Performance 

Plans, which provide annual commitments toward achieving the goals and 

objectives presented in the Strategic Plan; and Annual Performance Reports, 

which evaluate an agency's progress toward achieving performance 

commitments. 

• Federal Acquisition Streamlining Act (1994): This act requires federal agencies 

to demonstrate sound decision-making and a results-oriented focus when 

planning for projects and to effectively manage ongoing programs to achieve 

intended results. 

• OMB’s Capital Programming Guide (Appendix 13 of OMB Circular A-11): The 

Capital Programming Guide provides guidance for a disciplined capital 

programming process, as well as techniques for planning and budgeting, 

acquisition, and management and disposition of capital assets. Agencies are 

provided flexibility in how they implement the capital programming process. 

This guide is the template for federal agencies to use long range planning and a 

disciplined, integrated budget process as the basis for managing a portfolio of 

capital assets. The expected results are decisions that lead to achievement of 

performance goals with the lowest life-cycle costs and least risk. This process 
Asset Management Plan FY 2007

 6

should provide agency management with accurate information on acquisition 

and life-cycle costs, schedules, and performance of current and proposed 

capital assets. 

• Executive Order 13327, Federal Real Property Asset Management: The Federal 

Real Property Asset Management Executive Order (EO) mandates all agencies 

establish asset management plans. The Federal Real Property Council 

established 23 data elements for real property that all agencies are to report on 

annually at the asset level including the four performance measures: 1) 

Utilization Rate; 2) Operations and Maintenance Cost; 3) Condition Index; and 

4) Mission Dependency. 

• Executive Order 13423, Strengthening Federal Environmental, Energy, and 

Transportation Management: President Bush signed this executive order on 

January 24, 2007. It builds on and supersedes five previously issued ”Greening 

the Government” EOs. Among others, the EO sets the following new and 

more stringent requirements: 1) Achieve a reduction in energy consumption 

intensity (vs. FY 2003 baseline) of 3% annually from FY 2006-2015; 2) Achieve 

reduction in water consumption intensity (vs. FY 2007 baseline) of 2% annually 

from FY 2008-2015; and 3) Ensure that 50% of required renewable energy 

comes from new sources (those placed in service after January 1999.) 

VA publishes its Asset Management Plan (AMP) on an annual basis. The AMP 

describes VA’s capital asset management philosophy and serves as the blueprint for 

effectively managing assets to provide a safe and appropriate environment for the 

delivery of cost-effective benefits to veterans. 

VA manages and maintains its capital assets through the following programs: 

Major Construction

The Major Construction Program is for constructing, altering, extending, and 

improving any VA facility, including planning, architectural and engineering 

services, Capital Asset Realignment for Enhanced Services (CARES) activities, 

assessments and site acquisition where the estimated cost of a project is $10 million 

or more. 

Minor Construction

The Minor Construction Program is for constructing, altering, extending and 

improving any VA facility, including planning, assessment of needs, architectural 

and engineering services, site acquisition and disposition, where the estimated cost 

of a project is less than $10 million with a minor improvement component costing 

$500,000 or more. 
Asset Management Plan FY 2007

 7

Non-Recurring Maintenance (NRM)

The NRM program’s objective is to maintain the safe, effective and efficient function 

of VA’s infrastructure of buildings, structures and land. NRM projects range in size 

from just a few thousand dollars to several million dollars. 

Energy

VA’s energy management program is designed to meet the requirements of the 

Energy Policy Act of 2005 and EO 13423, and to achieve internal goals. Since 

September 2005, a Department-wide, cross-functional task force has been 

coordinating energy management activities. This task force is responsible for 

facilitating implementation of VA’s Energy Management Action Plan, which serves 

as VA’s blueprint for meeting its energy challenges. 

VA evaluates its portfolio of capital assets through the following: 

Federal Real Property Council 

The FRPC was developed under Executive Order 13327, Federal Real Property Asset 

Management to develop guidance and establish asset management principles, collect 

specified inventory data elements, and performance measures for all federal agencies. 

FRPC guidance defines replacement value as “the cost of replacing the existing 

constructed asset at today’s standards.” Overall, VA reported a total replacement 

value of buildings and structures at $83.9 billion for FY 2006. 

In contrast, book value is another method for valuing the Department’s assets. It 

differs from replacement value since it is based on historical cost, not today’s current 

costs. The latest report reflected a book value for VA assets of $11.6 billion, as of 

September 2006. 

Performance Metrics

VA follows OMB reporting requirements and has also developed its own 

performance metrics. Asset performance is compared by both internal and external 

benchmark analysis. Benchmarking is done within VA and encompasses 

comparisons across fiscal years and comparisons between similar VA facilities. VA 

performs external benchmarking against industry where comparable data exists. 

Overview of VA 

VA provides world-class benefits and services to the millions of men and women who 

have served this country with honor in the military. President Lincoln’s words 

spoken nearly 150 years ago – “To care for him who shall have borne the battle, and 

for his widow, and his orphan” – guide the efforts of more than 235,000 VA 

employees who are committed to providing the best medical care, benefits, social 

support, and lasting memorials to veterans and their dependents in recognition of 
Asset Management Plan FY 2007

 8

veterans’ service to this Nation. Within VA, there are staff offices as well as three 

Administrations: Veterans Health Administration (VHA), Veterans Benefits 

Administration (VBA), and National Cemetery Administration (NCA). 

Overall, VA owns 5,227 buildings and 32,635 acres, holds 1,133 leases, and maintains 

871 asset-related agreements. Each administration and VA’s Staff Offices maintain 

portfolios of both owned and leased assets and agreements to serve their 

organizational needs. Table 1-1 reports each organization’s portfolio of assets. Each 

organization is briefly described below. 

Table 1-1 

VHA 4,883 140,641,745 7,402,303 15,699 914 7,194,736 38 190 313

VBA 7 605,018 0 0 176 3,735,226 0 0 0

NCA 330 941,039 0 16,770 4 8,715 1 0 0

SO 7 1,592,008 0 165 39 1,772,543 2 0 0

VA TOTALS 5,227 143,779,810 7,402,303 32,635 1,133 12,711,220 41 190 313

VA Capital

Asset

Management

System

VA Capital Asset Inventory - Data As Of: 5/10/2007

Owned Assets Leased Assets Asset-Related Agreements

Bldgs. Historic 

Bldgs.

SF Vacant SF Energy

Conservation

Measures

1,531 320

Acres Leases SF

0 0

Outlease ** 

Agreements

Sharing

Agreements

* Includes only Awarded EU Agreements

** Includes Outleases, Permits, Licenses, Intra-Agency, and Inter-Agency 

Enhanced 

Use Leases*

1,644 327

1 3

112 4

Department of Veterans Affairs Office of Asset Enterprise Management

Agreements

Veterans Health Administration (VHA) 

VA operates the largest direct health care delivery system in America. VA meets the 

health care needs of America’s veterans by providing a broad range of primary care, 

specialized care, and related medical and social support services. VHA has a wide 

range of land (15,699 acres), buildings (4,883) and equipment to accomplish VA’s 

mission. 

Veterans Benefits Administration (VBA)

VBA provides many benefits to the nation’s veterans: compensation benefits, pension 

benefits, education opportunities, vocational rehabilitation and employment services, 

homeownership opportunities, and insurance service. VBA has smaller equipment 

and land requirements than VHA, with the majority of its space needs provided 

through direct and GSA leases (3,735,226 SF). 

National Cemetery Administration (NCA)

Primarily through the National Cemetery Administration, VA honors veterans with 

final resting places in national shrines and lasting tributes that commemorate their 

service to the nation. NCA requires land (16,770 acres) and equipment to accomplish 

VA’s mission. 
Asset Management Plan FY 2007

 9

Staff Offices

The Department’s staff offices are critical to VA’s ability to deliver services to veterans 

in a cost-effective manner. These offices provide a variety of services including 

human resources management, financial management, information technology, 

acquisition, and facilities management. Each Administration has their own asset 

management office to implement and manage the goals and objectives of the 

Department. 

Under the Assistant Secretary for Management, the Office of Asset Enterprise 

Management (OAEM) provides oversight in the capital asset arena and works 

collaboratively with all areas of the Department to ensure capital investments are 

based on sound business practices and principles and – most importantly – meet our 

veterans’ health care, benefits and burial needs. 

To continue to improve VA’s capital programs, the Department has taken steps to 

centralize and realign VA’s construction and real estate programs. On February 18, 

2007, VHA’s Office of Facilities Management was reorganized and realigned to the 

Office of the Secretary as the Office of Construction & Facilities Management (CFM). 

CFM includes VHA’s Office of Facilities Management, and the major construction and 

real estate execution responsibilities of NCA. CFM will continue to support VBA and 

Departmental staff offices. 

Agency Mission and Strategic Goals

VA’s capital asset management philosophy emphasizes ensuring capital investments 

fully support the agency mission and strategic goals. Capital investments must 

contribute to carrying out the Department’s mission by filling performance gaps. 

This important linkage between capital asset investment and performance and the 

Department’s mission and strategic goals is stressed throughout the life cycle of an 

investment. 

VA strives to meet the needs of the Nation’s veterans and their families today and 

tomorrow by: 

• Functioning as a single, comprehensive provider of seamless service to 

the men and women who have served our Nation; 

• Cultivating a dedicated VA workforce of highly skilled employees who 

understand, believe in, and take pride in our vitally important mission; 

• Continuously benchmarking the quality and delivery of our service 

with the best in business and using innovative means and high 

technology to deliver world-class service; and 

• Fostering partnerships with veterans’ service organizations, the 

Department of Defense and other federal agencies, state and local 
Asset Management Plan FY 2007

 10

veterans organizations, and other stakeholders to leverage resources 

and enhance the quality of services provided to veterans. 

VA’s five strategic goals guide our asset management goals. VA’s goals are listed 

below: 

Strategic Goal 1 - Restore the capability of veterans with disabilities to the greatest 

extent possible and improve the quality of their lives and that of their families. 

Strategic Goal 2 - Ensure a smooth transition for veterans from active military 

service to civilian life. 

Strategic Goal 3 - Honor and serve veterans in life and memorialize them in death 

for their sacrifices on behalf of the Nation. 

Strategic Goal 4 - Contribute to the public health, emergency management, 

socioeconomic well-being, and history of the Nation. 

Strategic Goal 5 - Deliver world-class service to veterans and their families by 

applying sound business principles that result in effective management of people, 

communications, technology, and governance. 

Governance of VA’s Capital Management 

The Strategic Management Council (SMC) is the governing body within VA 

responsible for overseeing effective and efficient capital asset management. The 

SMC oversees the approval of all capital investment proposals that exceed 

established thresholds, represent a high risk or high visibility, or are crosscutting. 

The SMC is supported by a panel that assesses and reviews capital investment 

proposals; evaluates, scores, and prioritizes proposals; and makes recommendations. 

The table below provides the capital investment thresholds by asset category that 

requires SMC review. 

Table 1-2: Thresholds for Capital Investments Requiring SMC Approval 

Total Acquisition Costs

Categories VHA VBA3 NCA Staff Offices

Infrastructure Proposals1

Medical Equipment

Non-Medical Equipment

Leases/GSA Space Assignments

Energy Savings Performance

Contracts2

$10M $10M $10M $2M

$1M/piece N/A N/A N/A

$500,000/piece $500,000/piece $500,000/piece $500,000/piece

$600,000 $600,000 $600,000 $600,000

$7M/Facility or

$10M/Multiple Facilities

$7M/Facility or

$10M/Multiple Facilities

$7M/Facility or

$10M/Multiple Facilities

$7M/Facility or

$10M/Multiple Facilities

1Threshold includes the Construction and Medical Care (non-recurring maintenance) appropriations.

2Multiple facilities means more than two facilities, with not one of the involved facilities value in the task order exceeding $7.0M. 3Business case application required for all new regional office buildings (at new or existing sites) in excess of $4.0M. These will be reviewed by the

 Office of Management as part of the operating budget plan approval process.
Asset Management Plan FY 2007

 11

VA Capital Investment Panel

The VA Capital Investment Panel (VACIP) was created to support the SMC, which is 

chaired by the Deputy Secretary. The VACIP’s role is to assess and review capital 

investment proposals, evaluate, score, and prioritize proposals, and make 

recommendations to the SMC. Their role also includes serving as liaison between 

representative SMC members and the administrations, as well as assisting in 

improving or defending capital investment proposals during the review process. As 

part of the VA’s capital investment and planning process, all major capital 

investments are evaluated using a multi-criteria decision model. As part of the 

process improvement activities, VA evaluates the capital decision models on an 

annual basis to ensure the models by which capital investments are scored reflect the 

current priorities and policy decisions. 

Monthly Performance Review

At the steady-state life-cycle phase, the performance of capital assets are tracked and 

reported for oversight at two levels. A business group, chaired by OAEM and made 

up of administration and staff office representatives, meets on a quarterly basis to 

review and validate asset performance reports. Underperforming assets are 

discussed with the group representatives. If necessary, the business group 

representatives are asked to prepare action plans to correct underperforming assets. 

Capital asset performance reports are presented quarterly at the Secretary’s Monthly 

Performance Review (MPR). The MPR is chaired by the Deputy Secretary and 

comprised of VA’s senior executives. The reports cover year-to-date performance and 

year-to-year comparisons for VA overall and the administrations. The reports also 

share administration action plans and progress, and incorporate plans for continuing 

capital portfolio improvements. The quarterly MPR reports are a critical decisionmaking element of VA’s President’s Management Agenda (PMA) Real Property 

Initiative. 
Asset Management Plan FY 2007

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Asset Management Plan FY 2007

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CHAPTER 2: VA’S CAPITAL ASSETS 

The fundamental goal of VA’s capital asset philosophy is to ensure that all major 

capital decisions, including high-risk and/or mission-critical projects, are based upon 

sound business and economic principles; promote the One VA vision by linking 

diverse but complimentary objectives; align with the overall strategic goals and 

objectives of VA; address the Secretary’s priorities by emphasizing program 

objectives in support of internal goals; and support the President’s Management 

Agenda. 

VA’s capital asset portfolio consists of four categories. VA views these assets as a 

single comprehensive portfolio. At each stage of the project’s life cycle, VA’s 

corporate portfolio goals help identify deficiencies that VA can address in order to 

improve asset efficiency and effectiveness in delivering services to veterans. VA’s 

asset classes include: 

1. Buildings and Land

• Building systems, additions, new construction, renovation, 

parking garages, and acquisitions and disposal of properties. 

This also includes site acquisitions. 

2. Equipment 

• Medical Equipment: Any diagnostic or treatment modality used 

in the delivery of health care. This includes items such as 

cardiac-catheterization laboratory equipment, magnetic 

resonance imaging, or linear accelerators. 

• Non-Medical Equipment: Non-recurring equipment items that 

are used by used by VA for services not related to patient 

diagnostics.

3. Leases/General Services Administration (GSA) Space Assignments 

• Direct Lease: A contract vehicle that enables VA to become a 

tenant and rent space and accompanying building services for a 

specified period at a negotiated rate. 

• GSA Space Assignment: Leased space acquired from GSA. 
Asset Management Plan FY 2007

 14

4. Agreements 

• Energy Savings Performance Contracts (ESPC): A legislated 

mechanism whereby federal agencies may pay for energy 

efficiency improvements over multiple years out of operating 

budgets, based on the savings generated by the improvements. 

VA’s energy management program features ESPC as one among 

a set of prioritized energy investment funding and procurement 

vehicles. An ESPC contractor is competitively selected to invest 

its capital in a set of VA-identified energy improvements, which 

result in significantly reducing VA energy costs and 

consumption over what would have been the case had the 

investment not been made. VA repays project costs out of the 

stream of cost savings generated by the energy improvements. 

• Enhanced-Use Leasing: Leasing underutilized VA property on a 

long-term basis to non-VA users for uses compatible with VA’s 

mission. The Department is able to obtain facilities, services, 

money, or other like-kind consideration for VA requirements 

that would otherwise be unavailable or unaffordable. 

• Enhanced Sharing Agreement: Allows individual medical 

facilities to contract for services with any health-care provider, or 

other entity or individual. These contracts can include a wide 

array of health care resources. There are no maximum dollar 

limitations for the investments. 

The Life-Cycle Approach 

Many of the asset management principles to which VA adheres, and which the 

Federal Real Property Council (FRPC) has endorsed, are being implemented through 

a life-cycle approach. The Department’s asset management philosophy is to reduce 

underutilized space and the associated operating costs. The Department employs 

performance management techniques to monitor asset performance on a regular 

basis through the entire life cycle of an asset. 

 Each significant capital investment is tracked through its entire life cycle: 

formulation, execution, steady state, and disposal. The chart on the following page 

represents the life-cycle process. 
Asset Management Plan FY 2007

 15

Figure 2-1: Capital Investment Life Cycle 

Milestone 0-1 Milestone 2 Milestone 3 Milestone 4 

Steady-state Disposal 

Project award through 

build-out 

Maintenance in the 

operational state 

Formulation Execution

The retirement and 

disposal of assets 

Concept definition to 

funding authorization & 

budget appropriation or 

business case approval 

1. Formulation Stage

The formulation stage of the life-cycle approach is where a need is identified, the 

concept of a capital asset is developed and the business case is approved. The three 

phases within the formulation stage are discussed below. 

Functional Development Phase: The functional development phase is at 

the operational level, and may occur either at Central Office or the field 

level. This is where needs are realized, gap analyses are completed, 

proposals are developed, and solutions are ultimately applied. In this 

phase, initial ideas for capital investments are developed and concept 

papers are completed. 

The functional development phase provides the foundation to support 

the need for a new capital asset. Data is gathered on strategic linkage, 

alternatives, cost-effectiveness and risk as the business case is formed. 

The varying levels of review strengthen the case for a new capital asset. 

Proposals undergo review first within each administration (VHA, VBA, 

and NCA). A decision is made whether to return the proposal for further 

development, decline the proposal, or forward the proposal for higherlevel consideration by the SMC. 

OMB 300 Application Business Case 

As part of the functional development phase, OMB Exhibit 300 business 

case applications are developed. These comprehensive Exhibit 300 

business case applications contain much of the information needed for 

senior management to make well informed decisions regarding specific 

capital assets. VA has utilized the Exhibit 300 application since FY 2000 

and began entering Exhibit 300 applications in the VA’s Capital Asset 

Management System (CAMS) beginning in the FY 2004 budget cycle. 

The business case applications capture critical asset specific information 

including building profile, performance measures and goals, financial 

management data, and exit strategy and serve as an historical record. As 

a web-based system, CAMS allows VA personnel including facility 
Asset Management Plan FY 2007

 16

managers, capital asset managers, project managers, and Central Office 

staff to access the application and update or track project performance 

throughout the asset’s life cycle. The most important elements of the VA 

business case include: 

• Detailed project description and justification, with a focus on strategic 

alignment; 

• Implementation information; 

• Cost and schedule information; 

• Alternatives considered; 

• Cost-effectiveness analysis; and 

• Risk analysis. 

The information contained in CAMS allows VA to capture and review detailed 

project information and strategic linkages for capital investment decisions. 

Strategic Linkage 

Each application must provide a description and justification that addresses 

VA or administration-specific strategic goals. 

Alternatives Considered 

An alternatives analysis is an evaluation of all feasible options addressing a 

known performance gap. Options are evaluated against each other to 

determine potential strengths and weaknesses prior to requesting project 

funding. The comparison of strengths and weaknesses allow the official to 

make a sound decision on the alternatives. 

OMB has provided a list of seven possible alternatives which can be 

considered during the formulation stage of a capital asset project. During the 

formulation of a proposal, a minimum of four alternatives must be considered, 

one of which must be the status quo to use as a comparative baseline. Two 

other alternatives that must also be investigated to address OMB concerns are 

renovation and contracting out. Other alternatives that can be considered 

during the formulation process are build, buy, lease, and share. Projects that 

have a detailed alternatives analysis are given higher scores when they are 

evaluated by the capital investment panel. The Exhibit 300 has a specific 

section for entering alternatives analysis data as well as a section for explaining 

why the chosen option is the preferred option for meeting program goals. The 

table on the following page presents potential alternatives for the project 

categories including but not limited to the following options: 
Asset Management Plan FY 2007

 17

Table 2-1: Potential Alternatives1

Project 

Category 

Renovate Build Buy Lease Status 

Quo Share 

Contract 

for 

Function 

VA 

Developed 

Software 

Total 

Options 

Infrastructure x X x x x x x 7 

Lease X X x x x 5 

Non-Medical 

Equipment 

X x x x x 5 

Medical 

Equipment 

X x x x x 5 

Enhanced-Use X X x x x 5 

Enhanced 

Sharing 

Agreement 

(ESA) 

X x x x 4 

Energy Savings 

Performance 

Contract 

(ESPC) 

x X X x x 5 

1

Alternatives in this table are for illustrative purposes only and are not to be construed as a complete listing as 

enhanced-use leases, enhanced sharing agreements, and energy savings performance contracts have multiple 

options. 

Cost-Effectiveness Analysis 

Cost-effectiveness analysis (CEA) is an important component of the VA 

decision-making process. It is a useful tool for evaluating competing 

alternatives. Cost-effectiveness analysis evaluates the total life cycle costs per 

project, and then compares it against other viable alternatives (e.g., lease, build, 

contract out) and the status quo. Each capital investment project application 

has a section devoted to the CEA. VA has developed a standard uniform Excel 

template where professionals can collect and analyze significant cost data to 

compare alternatives. Once users populate the constant value fields in the 

template, it automatically calculates inflated and discounted values including 

net present value for all the alternatives considered. This data is reviewed by 

the VACIP to assist VA in making correct capital decisions, and ensure 

alternatives are compared in an appropriate manner. Project managers who 

propose the most cost-effective alternatives with a quick payback period—and 

provide supporting documentation on estimates—will receive a high score. 

Risk Analysis 

Risk analysis identifies the possible factors that can affect capital investments. 

The risk evaluation process is completed for each alternative and is composed 

of three steps: identifying and scoring risks; rationalization; and control. There 

are ten significant risk components to be considered: 
Asset Management Plan FY 2007

 18

• Schedule; 

• Initial costs; 

• Life cycle costs; 

• Technical obsolescence; 

• Feasibility; 

• Reliability of systems; 

• Dependencies and interoperabilities; 

• Surety (asset protection); 

• Creation of a monopoly; and 

• Capability of agency to manage the project. 

Technical Review Phase: In the technical review phase, approved proposals 

have been developed into either planning or acquisition applications and 

receive technical and financial scrutiny from Department-wide councils or 

Administration boards, as well as initial prioritization within the owner 

organization. 

Capital investment proposals that do not pass a technical review are returned 

for further development, while proposals that do pass are forwarded to the 

VA Capital Investment Panel (VACIP) for strategic review. 

Strategic Review Phase: Proposals of all asset types within the Department 

are reviewed. Proposals are submitted using a web-based application in 

CAMS. A multi-disciplinary team – the VACIP – validates and then scores the 

proposal applications. The scoring results in a prioritized list of investments 

across asset types. The VACIP provides recommendations to the SMC on 

which projects to include in the annual budget request to OMB. The SMC 

recommends approval of scored proposals, and then submits them to the 

Secretary for final approval. CARES projects are ranked based on six criteria, 

including service delivery enhancements; safeguarding assets (patient life 

safety projects); special emphasis (e.g., spinal cord injury, blindness, serious 

mental illness); capital asset priorities/portfolio goals; Departmental 

alignment (DoD collaboration and strategic alignment); and financial 

priorities. Non-CARES projects are scored and ranked by the VACIP, using 

some of the same criteria with the exception of service delivery enhancements 

and special emphasis criteria; however, a customer service criterion was 

added to the non-CARES model. Brief descriptions of the criteria utilized for 

both models are included in Appendix A. 

VA Capital Investment Decision Models

The strength of the VA capital investment planning process is that it 

encourages continual improvement and refinement as a response to customer 

needs. Along with stakeholder suggestions, veteran needs and environmental 
Asset Management Plan FY 2007

 19

factors are monitored in order to modify the decision model to address 

changing needs and priorities. VA revisits its decision model and re-evaluates 

the criteria and sub-criteria on an annual basis to ensure the decision model is 

meeting these needs. 

The capital investment decision models used by VA provide a structure to 

evaluate capital investment proposals. The structure is part of a multiattribute decision methodology, the Analytic Hierarchy Process (AHP), 

which is used to score capital investment proposals. AHP is an established, 

accepted process that a number of commercial and public industries utilize. 

It accommodates the more judgmental factors and imposes a disciplined 

approach to the decision-making and prioritization process. A hierarchical 

approach helps to structure the problem and break it down into specific 

components. These components are called decision criteria (definitions of 

the criteria and the specific models are found in Appendices A and B). 

Multi-attribute decision modeling is a technique that allows evaluators to 

consider a number of diverse criteria in reaching a decision. AHP uses a 

hierarchical model comprised of a goal, criteria, sub-criteria, and alternative 

outcomes for each problem or decision. Such models combine evaluations 

or decisions using both quantitative and qualitative criteria. 

The VACIP uses the capital investment decision models and decision software 

to perform necessary calculations to evaluate investment proposals based on 

the effect a particular proposal has with respect to each sub-criterion. All panel 

members score each capital investment proposal that has passed the validity 

assessment. The scores are generated by the decision software and result in a 

list of investments ranked in priority order. This provides the SMC with a 

Department-wide view of projects that contribute to the accomplishment of 

VA’s diverse strategic goals. 

2. Execution Stage

Once a construction project receives funding by Congress it enters the execution 

stage of its life cycle. Here the emphasis will be on measuring planned and actual 

schedules (design and construction awards, and activation dates) and costs at each 

phase of the project’s initiation. Performance indicators will be developed and 

tracked for each type of project. 

The performance of two key indicators will be measured and tracked in VA’s Capital 

Asset Management System (CAMS) during the execution life-cycle phase of an asset. 

The health of these two indicators – schedule and cost – is monitored via reports 

called scorecards in CAMS. After a capital investment application is funded by 

Congress and the project begins, the health of that project will be monitored. Health is 

comprised of a plan, revised plan, and actual obligations, and schedule, revised 
Asset Management Plan FY 2007

 20

schedule, and actual schedule dates. VA staff will use CAMS to calculate an overall 

health score for each project. This score will allow VA to determine how well an 

individual initiative is progressing as well as the entire VA portfolio during the 

execution stage. Scorecard indicators include red circles, yellow diamonds, and green 

stars that provide a quick view of the health of the particular indicator. 

In the near future VA hopes to incorporate a standardized performance-based 

measurement system such as earned value to improve management of capital assets 

during the execution stage. 

3. Steady-State Stage

Once a project becomes fully operational, the steady-state life-cycle stage is entered. 

A steady-state asset is no longer monitored based on its own project milestones and 

health, but is merged into the overall facility operations. The tracking of health in 

steady state is performed at the facility or station level rather than at the project level. 

VA’s corporate portfolio goals are generally focused on the steady-state phase of 

capital asset life-cycle. 

VA’s Capital Asset Management System (CAMS) is the Department’s recognized 

system for tracking and reporting the performance of steady-state assets. CAMS 

merges data from multiple source systems from across the Department. Two 

primary sources of data for VA steady-state capital assets are the Capital Asset 

Inventory (CAI) database (for inventory information) and VA’s Financial 

Management System (FMS) (for financial data). CAI is operated by the Office of 

Construction & Facilities Management, with data input and maintenance 

accomplished locally using desk-top web access. The database contains essential 

inventory information on all VA administrations. The major components of the CAI 

database are: 

• Owned buildings 

• Land 

• Leases 

• Space Driver (space usage model) 

• Facility Condition Assessment 

• Historic Preservation 

• Asset-based agreements such as enhanced-use leases, sharing 

agreements, donations, permits, licenses, energy agreements and Interagency agreements. 

• Disposals 

Another key source system is FMS. FMS provides data extracts of obligation and 

expenditure information and categorizes these by cost types (e.g., operating and 

maintenance, leasing, energy) for specific assets. The data can also be rolled up for 

more general views at the local facility, region, and administration levels. 
Asset Management Plan FY 2007

 21

Other elements required for tracking and reporting on steady-state assets include 

energy consumption and workload data. These additional source systems include: 

• VHA Support Service Center (VSSC) – VHA energy consumption 

• VHA’s Patient Treatment File (PTF) and Outpatient Clinic (OPC) file – VHA 

workload 

• NCA’s Management and Decision Support System (MADSS) – NCA workload 

and energy consumption 

• VBA’s Workload Management (DOOR) – VBA workload 

• VA PAID - Workload 

Data from the systems is loaded to and can be viewed in CAMS separately or in 

combination to track the health of steady state assets. For example, CAMS reports 

space utilization using CAI data. CAMS also calculates and reports costs per gross 

square foot using FMS and CAI data. CAI and FMS were critical in the transition to 

meeting Federal Real Property Council inventory reporting requirements. 

4. Disposal Stage

The final stage of an asset’s life cycle is disposal. If an asset proves to be 

underutilized or costly to maintain, it is considered for disposal. VA has developed a 

real property disposal policy to identify these assets. Disposal is discussed in further 

detail in Chapter 5. 
Asset Management Plan FY 2007

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Asset Management Plan FY 2007

 23

CHAPTER 3: VA’s CAPITAL PORTFOLIO, VALUATION AND FUNDING 

VA has two primary mechanisms in place for measuring the value of the 

Department’s assets, book value and plant replacement cost. Book value follows 

standard accounting practices and plant replacement value is consistent with FRPC 

guidance. 

Book Value

Each year VA publishes consolidated financial statements, which includes the book 

value of capital assets. Capital assets include land, property, plant, and equipment. 

The book value is the net amount shown for an asset from the balance sheet. It equals 

the gross cost less the related valuation account. Book value is based on historical 

cost and will differ from market value. 

The latest report reflected the following book values ($ in millions): 

Book Value as of Sept 30, 2006* 

Land and Improvements $ 345 

Buildings 7,887 

Equipment 1,431 

Construction in Progress 1,194 

Other 781 

 

 $ 11,638 

*Source: VA FY 2006 Annual Performance and Accountability Report 

Plant Replacement Value 

Consistent with FRPC requirements, VA annually calculates and reports the 

replacement value of its existing buildings and structures. The FRPC guidance 

defines replacement value as “the cost of replacing the existing constructed asset at 

today’s standards.” VA uses the following formula provided in the guidance: 

Replacement Value = Square Feet X Unit Costs X Overhead Factor 

The square footage of VA’s owned buildings and structures is taken directly from its 

capital asset inventory. Unit costs are determined by the Facility Management 

Office’s Capital Cost Guides and vary according to an asset’s function (e.g., hospital, 
Asset Management Plan FY 2007

 24

office, warehouse, etc.) and geographic location. The overhead factor used for FY 

2006 was an inflation factor of 1.9 percent. 

VA reports replacement value for FRPC purposes at the individual constructed-asset 

level. Overall, VA reported a total replacement value of owned buildings at $31.5 

billion in FY 2006. 

VA’s Capital Asset Funding Mechanisms

In concert with VA’s capital asset management philosophy, the Department 

maintains the current assets in its portfolio and also makes prudent investments. 

The Appropriations Process 

In the appropriations process, Congress provides funds through an annual 

appropriations bill, for VA to make payments out of the Treasury for specified 

purposes. VA makes prudent capital asset investments through the Construction, 

Major appropriation (for projects over $10 million) and Construction, Minor 

appropriation (for projects less than $10 million with a minor improvement 

component costing $500,000 or more). 

Major Construction

The Major Construction Program is for constructing, altering, extending, and 

improving any VA facility, including planning, architectural and engineering 

services, Capital Asset Realignment for Enhanced Services (CARES) activities, 

assessments and site acquisition where the estimated cost of a project is $10 million 

or more. 

CARES serves as the blueprint for the future in capital asset planning and 

management. VA continues to make significant progress in implementation of the 

CARES decisions of 2004. 

Accomplishments

• Since the initial CARES decision announcements in May 2004, 36 major 

construction projects have been fully or partially funded in the 

appropriations of FY 2004 -2007. Two projects that meet the definition 

of CARES were funded with Hurricane Katrina emergency 

supplemental appropriations outside the CARES investment process. 

The total cost of the 38 projects is $4.7 Billion and $2.7 Billion has been 

appropriated for CARES major construction requirements. 
Asset Management Plan FY 2007

 25

• Construction contracts have been awarded on fourteen projects; and 

one project, the VA/Navy surgery and emergency room improvement 

joint venture at North Chicago, has been completed. 

• Nineteen projects are now in the design phase. Architect/Engineering 

firms have been selected for each of these projects and these firms are 

proceeding in various stages of design. 

• Two projects, the Denver Replacement Hospital and the new Orlando 

Hospital are in early planning pending site acquisition. 

Challenges

• Two major challenges face the Department in continuing to implement 

the CARES program. The first challenge is cost associated with a very 

robust worldwide construction economy coupled with rapidly 

increasing pricing for labor and building materials. This is exacerbated 

by rising fuel prices. It has become increasingly difficult to attract more 

than one or two bidders given the amount of commercial work 

available to the industry. All of this makes it a challenge to stay within 

budget. Notwithstanding this, VA awarded 12 of 14 planned major 

contracts during FY 2006. 

• The second challenge for VA is the significant funding required to 

continue with the CARES process. Of the 36 projects that have been 

included in VA’s budget requests, several have funding only for 

design. An additional $2.1 Billion is needed for the construction of 

these facilities. The FY 2008 budget requests $511 million for these 

projects. 

Please see Appendix E for a status report on the CARES projects. 

Another account through which VA makes prudent investments in capital assets is 

the Minor Construction appropriation account. 

Minor Construction

The Minor Construction Program is for constructing, altering, extending and 

improving any VA facility, including planning, assessment of needs, architectural 

and engineering services, site acquisition and disposition, where the estimated cost 

of a project is less than $10 million with a minor improvement component costing 

$500,000 or more. 
Asset Management Plan FY 2007

 26

VA’s Capital Asset Budget Request Mechanisms

Maintaining VA’s Assets through Development of VA Facility Sustainment Model 

VA developed a Department-wide sustainment model based on the framework 

currently used by the Department of Defense (DoD). The DoD method utilizes a 

Real Property Classification System (RPCS) for identifying, categorizing, and 

analyzing land and facilities around the world. DoD’s model defines sustainment 

as the provision of resources for maintenance and repair activities necessary to 

keep facilities in good working order over a 50-year service life. Maintenance and 

repair activities encompass preventative maintenance tasks, regularly scheduled 

adjustments, regularly scheduled inspections, emergency response, minor repairs, 

and others. 

However, DoD’s sustainment model does not include components such as: 

restoration, modernization, repairing or replacing non-attached equipment or 

furniture, or repairing or replacing building components that last more than 50 

years. To account for these componenets, a more refined and discreet classification 

system was finalized for VA and a Department-wide sustainment model was 

completed in 2005. 

The advantages of implementing a VA sustainment model are as follows: 

1. It will support the non-recurring maintenance program by providing 

budget requirements needed to sustain existing infrastructure; 

2. It identifies any additional funding needed to improve the condition of 

the current infrastructure; 

3. It avoids the expedited degradation of existing infrastructure; and 

4. It reinforces the practical and tactical principles of responsible 

stewardship of federal properties. 

VA Sustainment Model

VA has initiated an assessment of all real property holdings (buildings, land, and 

leases). Additional details regarding the asset portfolio are being developed and 

implemented into CAMS. The DoD approach is compatible with VA’s needs 

because it is a logical progression of the CAMS concept to delineate life-cycle costs 

of an asset. Sustainment in VA will address maintenance necessary expenses below 

the minor construction program threshold. The model used DoD cost factors and 

developed cost factors for psychiatry, nursing home care units and domiciliary 

because DoD did not have similar programs. VA also adjusted for geographic 

location, age of facility, and historic considerations. Taking into account the recent 

CARES studies and emphasis on vacant space, the VA model substantially 

decreases cost factors for vacant and common spaces. 

 
Asset Management Plan FY 2007

 27

The VA Sustainment Model formula is: 

Requirement = Facility Functionality Mix 

X Sustainment Cost Factor (Apply DoD factors with modifiers for Psych, 

NHC, and Domiciliary Care*) 

X Area Cost Factor** 

X Inflation Factor (for FY 2005 and beyond) 

X Age Factor (apply 10% premium when building is older than 50 years) 

X Historic Factor (apply 5% premium when building is on the National 

Register of Historic Places). 

* Modified based on identifying functions, applying % of space and 

extrapolating comparables to DoD FSM 

 ** Geographic location adjustment for Labor, Materials, and Equipment 

(LME). 

The sustainment model will only maintain the portfolio at current levels. It will keep 

our new assets in top condition, but will not improve assets that are in failing 

condition – it will only stop them from further deteriorating. Once a baseline is 

established using this methodology, VA will reevaluate the effectiveness of the 

formula annually by comparing it to actual obligations. After using the model for 

several years, VA will revisit the formula to determine if and how it should be further 

refined. 

VA is also looking to further develop methods of measuring how maintaining 

infrastructure leads to improved and more efficient healthcare and service delivery. 

This information would help managers make capital decisions as whether to invest in 

and retain an asset or to excess it. In addition, a complete review of VA’s seismic 

correction needs is currently underway. VA expects to integrate these results into its 

capital asset budget request process by FY 2008. 

Non-Recurring Maintenance (NRM)

The NRM program’s objective is to maintain the safe, effective and efficient function 

of VA’s infrastructure of buildings, structures and land. NRM projects range in size 

from just a few thousand dollars to several million dollars. NRM is funded out of the 

Medical Facilities appropriation account. The sustainment model computes the 

amount of NRM funds required each fiscal year. 

Deferred Maintenance

Deferred maintenance includes correction costs/repair needs for any VA-owned 

building to improve or maintain assets in poor condition (at the end of useful lifespan 

failure is not critical) and critical condition (requires immediate attention) not funded 
Asset Management Plan FY 2007

 28

or performed within a fiscal year. Building systems (e.g., structural, mechanical, 

architectural, etc.) and sub-systems (structural: floor systems, foundations, and 

vertical members; mechanical: air handling equipment, ductwork and piping; 

architectural: accessibility, exterior walls, fixed equipment, and interior finish/door; 

etc.) are examples of systems where deferred maintenance costs would apply. 

There are various methods for reporting deferred maintenance figures. The Capital 

Asset Inventory System (CAI), a detailed system with asset specific information, 

reports figures resulting from on-site Facility Condition Assessments (FCAs). VA’s 

Performance and Accountability Report (PAR) reports deferred maintenance costs 

from VA’s Financial Management System (FMS). 

Use of Facility Condition Assessments 

In preparation for the CARES process, VHA conducted detailed contractor-assisted 

(engineers and architects) on-site condition evaluations of VA-owned buildings and 

land. Now one third of VHA’s VISNs facilities are evaluated each year. The FCA 

rated the physical condition and remaining useful life of capital assets and the 

sixteen major systems in a building (i.e., architectural, structural, mechanical, 

plumbing and transport, etc.). The FCA uses primarily an alphabetical rating system 

of A, B, C, D and F. The rating of “A” refers to a like-new condition with 90% of the 

useful lifespan remaining of an item. A rating of “B” signifies an above average 

condition with over half of a useful lifespan remaining. A “C” rating indicates an 

average condition with less than half the useful life remaining. VA pays particular 

attention when buildings are given “D” or “F” ratings. A “D” rating calls attention 

to a poor condition and indicates the item being rated is at the end of its useful 

lifespan. The FCA rating of “F” signifies a critical condition requiring immediate 

attention. 

The FCA database system records costs of corrections and replacement cost 

information only for elements and systems rated D or F. The correction and 

replacement costs include an escalation factor to account for inflationary construction 

costs. Until the current year (FY 2007), the escalation factor was only applied to FCA 

updates being conducted at the seven VISNs within a given year. It is anticipated 

that, starting in FY 2008, the escalation factor will be applied to all correction and 

replacements costs annually, whether a VISN is due for a FCA update or not. 

Initial condition assessments in the National Cemetery Administration were 

accomplished by the FY 2002 Millennium Study. This was a one-time audit of 

cemetery conditions and needs. NCA recently completed condition assessment 

rating updates for its 124 national cemeteries to comply with FRPC requirements. 

The NCA plans a more comprehensive facility condition assessment for FY 2007. 
Asset Management Plan FY 2007

 29

Facility condition assessment for VBA is a more simplified process because the 

great majority of the assets are leased. The VBA assessment is limited to age, 

shape, security risks, and seismic issues. Assessment data is included in CAMS 

and is used in the justification of new lease acquisitions. 

Infrastructure Protection 

To fulfill VA’s statutory charge to respond to national emergences requires VA to 

provide for the security and continued operation of VA’s critical facilities. VA has 

taken the following actions to improve the system’s ability to respond to natural or 

man-made disasters: 

• Complete review of VA’s seismic deficiencies in accordance with 

Executive order 12941. Facilities have been categorized into exceptional 

high risk and high risk categories. Mitigation costs have been 

identified and escalated to 2005. These costs are being integrated in to 

the Facilities Condition Assessments with annual escalation of cost. 

• Completed Hurricane Assessments for 21 VA facilities located in high 

risk hurricane areas. Studies identified mitigations to improve the 

Facilities’ ability to remain functional during and after a hurricane. 

Estimated costs to mitigate the identified hurricane vulnerabilities were 

develop based on 2006 as the base year. 

• Completed Physical Security Infrastructure Assessments for VA 

mission critical facilities. These assessment identified mitigations to 

improve survivability based on 12 risk factors including man-made and 

natural disasters. 

The Performance and Accountability Report

The PAR figure and methodology calculates deferred maintenance in accordance 

with accounting and fiscal policy. The PAR accounting procedures require reporting 

deferred maintenance only for capitalized assets. Additionally, the accounting 

estimate used for PAR reporting is limited to the cumulative cost of deferred 

maintenance (on a capitalized asset) of at least $100,000. Information is based on a 

Condition Assessment Survey, Total Life-Cycle Cost Method, or other acceptable 

methods. 

Related to deferred maintenance is the recurring maintenance program. 
Asset Management Plan FY 2007

 30

Recurring Maintenance Program

Recurring maintenance projects, like the NRM program, directly address the deferred 

maintenance requirements of tVA. Recurring maintenance is funded out of the 

Medical Facilities appropriation. Recurring maintenance costs are derived from the 

sustainment model for each fiscal year.

The culmination of VA’s capital investment process that describes the selection of the 

Department’s key capital acquisitions, based on funding requirements determined by 

the above programs, is the 5-year capital plan. 

Five-Year Capital Plan 

In July 2004, VA produced its first 5-year capital plan. This plan provides a 

framework for effective management of the Department’s capital investments that 

will lead to improved resource use and more effective health care and benefits 

delivery for our Nation’s veterans. The plan facilitates the Department’s 

implementation of the Capital Asset Realignment for Enhanced Services (CARES) 

process, which is the most comprehensive analysis of VA’s health care 

infrastructure ever conducted, and provides a 20-year blueprint for the critical 

modernization and realignment of VA’s health care system. The CARES report 

provided a national blueprint of infrastructure changes needed to improve 

veterans’ health care access, by realigning and modernizing facilities while 

lowering vacancy rates and operating costs. CARES focused on meeting veterans’ 

long-term medical care needs (including access) by ensuring that VA’s medical 

capital investments would be established in the right location, at the correct 

capacity, and excessing those investments that VA no longer requires, in order to 

meet VA’s mission and strategic goals. The Secretary’s CARES Decision report 

called for approximately $1 billion per year for the next five years to modernize 

VA’s medical infrastructure and enhance veterans’ access to care but did not 

provide the specific details of the projects needed to carry out the 

recommendations. The specific capital needs were provided to Congress in VA’s 

first 5-Year Capital Plan and in each capital plan subsequent to that one. 

The most recent 5-Year Capital Plan provides the specific investments needed for 

FY 2007 and future projects that may be considered for funding during FY 2008-

2012. The plan identifies the priority projects that would improve the environment 

of care at VA medical facilities and ensure more effective operations by redirecting 

resources from maintenance of vacant and underused buildings and reinvesting 

the resources in veterans’ health care. These projects will address the requirements 

the Secretary approved in his CARES Decision report in May 2004. 

The capital plan also identifies VA’s highest priority needs for new construction 

and expansion of cemeteries in areas where burial sites will soon be depleted, as 
Asset Management Plan FY 2007

 31

well as six new cemetery sites that address the National Cemetery Expansion Act of 

2003, Public Law 108-109, and new benefits administration office facilities. Equally 

important, the plan describes how VA will enhance collaborative efforts with the 

Department of Defense and increase the use of public and private ventures through 

VA’s enhanced-use lease authority. 
Asset Management Plan FY 2007

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Asset Management Plan FY 2007

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CHAPTER 4: VA PERFORMANCE METRICS & EVALUATION 

METHODOLOGY 

VA measures its capital asset performance following the Department’s own capital 

portfolio goals, and the metric set forth through other federal mandates. VA’s capital 

portfolio goals preceded FRPC metrics and goals and metrics put forth in recent 

energy legislation. VA maintains its corporate goals and has aligned them with FRPC 

and energy principles where measures are related. VA employs a number of external 

and internal benchmarks to help analyze and report asset performance. VA’s 

performance results are reported to meet President Management Agenda initiatives, 

and used internally for asset management decision making. 

VA Capital Portfolio Goals

VA’s capital portfolio goals are closely aligned with the asset management core 

objective to provide a safe and appropriate environment for the delivery of benefits 

to veterans in a cost-efficient manner. The VA capital portfolio goals are based on 

the Department’s main objective to manage assets in a way that ensures resources are 

maximized, assets (including VA staff and veterans) are safeguarded, and all 

opportunities (public, private, or a combination thereof) are fully explored. The 

goals also allow VA senior management to monitor the overall health of the 

Department’s capital asset portfolio and provide for informed corporate decisionmaking. VA capital portfolio goals include: 

Decrease Energy Utilization 

Decreasing the total energy consumption in VA facilities has a direct impact on 

minimizing the overall operational costs of those facilities. To achieve this cost 

minimization, VA is committed to leading the way in effective building operations 

and management. VA is achieving this goal by implementing energy efficiency and 

renewable energy projects, installing self-generation, implementing sustainable 

design principles in new construction and major renovation projects, and proactively 

upgrading energy systems. VA has realigned its measure of traditional energy 

consumption per gross square foot per the Energy Policy Act of 2005, with FY 2003 

serving as the new baseline from which improvements are measured. 

Increase Intra/Interagency and Community-Based Sharing 

Combining and sharing assets with other federal, state, and local organizations, 

departments, and agencies that embrace the mission, goals, and objectives of VA is a 

cost effective and viable approach to servicing our veteran’s needs. 
Asset Management Plan FY 2007

 34

Increase Revenue Opportunities 

Enhanced-use leasing authority provides VA with increased revenues that can then 

be reinvested to meet other VA service delivery needs. 

Safeguard Assets 

Safeguarding assets (including patient and employee safety) is a top priority of the 

Department. Decreasing the number of high-risk assets in VA’s portfolio can reduce 

the cost of making these facilities compliant with government standards and 

practices. VA will reduce costs by maintaining assets that conform to safety 

measures. 

Maximize Highest and Best Use 

Maximizing the highest and best use of VA assets is a combined effort of all VA 

organizations. VA is developing targets to balance spending distribution (e.g., new, 

enhancements, maintenance, research activities) to ensure portfolio management and 

leveraging of investments. VA will increase the number of agreements for asset 

exchanges (including in-kind consideration) and sales to acquire replacement 

property better suited to care for and improve the lives of our Nation’s veterans. VA 

is also working to increase the total number of agreements to ensure full utilization 

and optimum performance of all VA assets. These agreements and programs – such 

as enhanced-use leasing – also contribute to increased savings and cost avoidance. 

Federal Real Property Council 

The General Accountability Office (GAO) has considered federal real property to be a 

high risk area for several years. In February 2004, the President issued Executive 

Order 13327, Federal Real Property Asset Management. It established the Federal 

Real Property Council (FRPC) to develop guidance and establish asset management 

principles, collect specified inventory data elements, and performance measures for 

all federal agencies. The FRPC is composed of Senior Real Property Officers 

representing federal agencies and cabinet level departments and is chaired by the 

Office of Management and Budget (OMB). The Assistant Secretary for Management 

serves as VA’s Senior Real Property Officer. 

The FRPC is responsible for providing guidance and facilitating the implementation 

of agency asset management plans. This is accomplished through a myriad of 

committees and workgroups both external and internal to the Department. Some 

external committees include the FRPC Asset Management Planning Committee, 

FRPC Performance Measures Committee, FRPC Inventory and Systems Committee 

and the Federal Asset Sales Committee. Membership includes federal agencies and 
Asset Management Plan FY 2007

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the Office of Management and Budget. The following is a list of the guiding 

principles of the FRPC. 

FRPC GUIDING PRINCIPLES

1. Support agency 

missions and strategic 

goals.

2. Use public and 

commercial benchmarks 

and best practices.

3. Employ life-cycle costbenefit analysis.

4. Promote full and 

appropriate utilization.

5. Dispose of unneeded 

assets.

6. Provide appropriate 

levels of investment.

7. Accurately inventory and 

describe all assets.

8. Employ balanced 

performance measures.

9. Advance customer 

satisfaction.

10.Provide for safe, secure, 

and healthy workplaces.

Some internal workgroups include the Capital Asset Management System Business 

Group and the VHA Portfolio Workgroup. Membership includes VA 

administrations and staff offices, VHA analysts, and field Capital Asset Managers. 

These groups function as representatives for their respective administrations and 

work with the Office of Asset Enterprise Management to meet federal and agency 

performance and reporting requirements. Overall, VA portfolio performance is 

monitored by the VA Management Performance Review Board, chaired by the 

Deputy Secretary, where results are presented on a quarterly basis. 

Federal Real Property Council Performance Metrics 

In FY 2005, VA implemented the Federal Real Property Council (FRPC) Tier 1 

performance metrics and aligned them with VA corporate goals. Because much of 

the data needed to support the FRPC Tier 1 metrics were already embedded in the 

Department’s predefined corporate portfolio goals, the transition from VA’s 

corporate goals to the FRPC metrics was possible. Tier 1 metrics vary only in their 

broad approach to federal real property. In order to meet federal requirements and 

to provide VA-focused measures, the Department currently measures and maintains 

VA’s capital portfolio goals and the FRPC Tier 1 metrics. Where there was overlap, 

VA goals were modified accordingly. VA has four real property metric goals and 

they are discussed on the following page. 
Asset Management Plan FY 2007

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Decrease Underutilized Capacity/Percent of Space Utilization as compared to 

overall space (owned and direct-leased) 

Decreasing unused and underutilized space is one key factor leading the President’s 

decision to implement the Federal Real Property Asset Management Initiative. VA 

transitioned or modified this goal to be consistent with the following FRPC facility 

utilization index: Percent of Space Utilization as Compared to Overall Space (owned 

and direct-leased). This transition involved updating the vacant and underutilized 

facility baseline adjusting CAMS business rules and incorporating the FRPC 

definition of “ratio of occupancy to current design capacity.”

Decrease Operational Costs/Ratio of Operating Costs per Gross Square Foot (GSF) 

This goal was transitioned to be consistent with the Tier 1 Annual Operating Costs 

measure (Ratio of Operating Costs per Gross Square Foot (GSF)). VA’s CAMS tracks 

operating costs using many of the same cost elements the FRPC requires. These 

include utilities, recurring maintenance and repairs, cleaning/janitorial, and 

roads/grounds expenditures required to operate a facility. However, these costs are 

not captured at the constructed-asset level as planned by the FRPC. OMB approved 

a methodology for providing annual operating costs using an allocation model. 

VA seeks to minimize maintenance and operation costs through increasing the 

efficient use of space, decreasing the number of assets that have exceeded their useful 

life, and by lowering costs to commercial benchmarks for operating and 

maintenance. By decreasing operation costs, VA will be able to reinvest much 

needed funds in improving services to our Nation’s veterans. 

Percent Condition Index (owned buildings) 

VA performed condition assessments of all its medical facilities as part of the CARES 

study. These assessments include estimates of repair needs for each building. VA 

calculates condition index annually as the ratio of repair needs to plant replacement 

value. The higher the Condition Index the better the condition of the constructed 

asset. Condition Index helps identify assets most in need of repair and plan for 

upgrades or disposition. VA’s Capital Asset Inventory (CAI) database includes both 

variables needed to provide a facility condition index score, including the facility 

condition assessment and the plant replacement value for each building. The 

Department currently conducts assessment updates on one-third of owned buildings 

per year. 

Ratio of Non-Mission Dependent Assets to Total Assets 

Using the OMB approved methodology, VA determines whether each asset (owned 

and direct leased buildings, structures, and land parcel) is mission critical; mission 
Asset Management Plan FY 2007

 37

dependent/not critical; or not mission dependent. Mission dependency information 

is entered into the CAI, which feeds into CAMS for tracking and reporting purposes. 

Mission Dependency is determined by the FRPC Utilization Index. All VA assets that 

are 70-100% utilized are designated as mission critical. Assets that are 50-70% utilized 

are designated as mission dependent/not critical. Assets that fall below 50 percent 

utilized are designated as not mission dependent. 

Capital Asset Benchmarking 

A key measure of VA’s success is to compare asset performance to that of the private 

sector via benchmark analysis. CAMS provides VA the means and data to compare 

certain asset expenses to industry or commercial benchmarks for its leasing and 

energy programs. Benchmarking is also done within VA and encompasses 

comparisons across fiscal years and comparisons between similar VA facilities. 

CAMS currently holds performance data back to FY 2004. The system provides 

views that compare from one year to the next. VA can analyze and report increases 

or decreases in costs, utilization, and other goal performance from year to year and 

across individual stations, networks, and at administration levels. 

Lease Benchmarks 

With over a thousand operating leases (88 of which are over the $600,000 Strategic 

Management Council (SMC) threshold), VA considers it a priority to measure the 

value of such investments. From the outset, CAMS was designed to include 

benchmark analysis. Sources were studied and a selection was made on the basis of 

quality/cost. VA uses a combination of two nationally-recognized sources of lease 

rate benchmark data: BOMA (Building Owners & Managers Association) and 

LoopNet. LoopNet is an online commercial real estate listing service with over 

380,000 commercial properties for sale and for lease. VA will use an average of 

BOMA and LoopNet for FY 2007 benchmarking. The following graphic illustrates a 

lease benchmark view in CAMS. 
Asset Management Plan FY 2007

 38

Benchmarking is not an exact science. The outcomes are meant to lead to suggestions, 

not directly to consequences. Some of the inherent limitations of this process are: 

• BOMA data will always be at least a year old. 

• BOMA data pertain to generic office space. 

• Only the major metropolitan areas are covered. 

These are not precise comparisons. VA lease costs are a blend of central business 

district and suburban locations. Commercial benchmarks are by city where there can 

be significant variances within those markets. For example, the commercial 

benchmark in Tampa, Florida is $17.90. VA has eight leases in Tampa ranging from 

$14.23 to $33.00 per square foot and an average of $20.56 per square foot overall. 

VA lease benchmarks are updated annually, and benchmark data is shared across the 

system so that local asset managers can use it to VA’s benefit in lease negotiations. 

Internal Benchmarks 

Benchmarking is done within VA and encompasses comparisons across fiscal years 

and comparisons between similar VA facilities. CAMS currently holds performance 

data back to FY 2004. The system provides views that compare costs, utilization, and 

other goals from one year to the next. VA can analyze and report increases or 

decreases in performance from year to year at individual station, network, and 

administration levels. Performance comparisons are also provided across stations 

and networks. The following illustration is an example of one VHA VISN’s 

performance in comparison to the other 20 VISNs. 
Asset Management Plan FY 2007

 39

Energy Benchmarks 

In July 2003, VA established a comprehensive energy conservation program designed 

to achieve both federally mandated and internally established energy-related goals. 

Implicit to achieving these goals is more efficient and cost-effective management of 

energy assets. VA has recently begun an energy asset performance benchmarking 

initiative to help gauge current status and future progress in this area. The 

benchmarking effort encompasses two categories: 1) internal benchmarking, to 

measure improvements over past performance; and 2) external benchmarking, to 

compare VA performance with other similar facilities. 

VA is tracking and comparing both energy consumption and energy expenditures 

with internal and external benchmarks, as follows. Internal benchmarking with 

calculations down to the facility level is in the following table. 

Table 4-1: VA Facilities: Internal Energy Asset Performance Benchmarking 

MEASURE 

Consumption Expenditures Benchmark/Goal 

VA Energy Management Program

Btu per square foot 

kWh per square foot 

Total energy cost per square foot

Electricity cost per square foot 

Electricity cost per kWh 

Natural gas cost per Btu

Period-to-Period Reduction in 

Unit Consumption/Unit Cost
Asset Management Plan FY 2007

 40

Federal Mandate: Executive Order 13423

Btu per square foot – all facilities 3% reduction annually through 

FY 2015 beginning in FY 2006, 

or 30% reduction by FY 2015, 

relative to FY 2003. 

Reduction in greenhouse gas 

emissions 

Water consumption intensity (measure TBD) 2% reduction annually through 

FY 2015, beginning in FY 2008, 

or 16% by FY 2015, relative to 

FY 2007 

Federal Mandate: Energy Policy Act of 2005

Btu per square foot – all facilities 2% reduction annually through 

FY 2020 beginning in FY 2006, 

for a total 30% reduction by 

2020, relative to FY 2003 

baseline 

Federal Mandate: EO 13123

Btu per square foot – 

commercial facilities 

30% reduction by FY 2005 

35% reduction by FY 2010 

vs. 1985 baseline 

Btu per square foot – 

industrial facilities 

20% reduction by 2005 

25% by 2010 

vs. 1985 baseline 

External Benchmarking 

VA has focused in FY 2006 on ensuring that energy cost and consumption 

information for its major healthcare facilities is entered into EPA’s Energy Star 

Buildings database so that VA facility energy use can be benchmarked quarterly 

against all healthcare facilities in the Energy Star database. VA now downloads its 

data electronically to the database, with benchmark results for each facility returned 

electronically to VA. Based on these results, facilities may apply for the Energy Star 

building label. 

Energy Star benchmarking for healthcare facilities is limited to acute care facilities 

and medical office buildings. Also, the Energy Star hospital model is based on a 

dated survey conducted by the Electric Power Research Institute (EPRI). EPRI has not 

updated the survey since 1997. VA plans to continue working with the Energy Star 

database to potentially expand benchmarking opportunities. VA also plans to 

evaluate other potentially promising benchmarking databases such as the Energy 

Information Administration’s (EIA) Commercial Building Energy Consumption 

Survey (CBECS). CBECS is a periodic national sample survey that collects 

information on the stock of U.S. commercial buildings, their energy-related 

characteristics, and their energy consumption and expenditures. It is now conducted 
Asset Management Plan FY 2007

 41

every four years. The 2003 survey, the most recent, is the eighth survey in the series 

begun in 1979. The next survey is scheduled to take place in 2007. 

CBECS statistics in CBECS reports include energy expenditure per square foot and 

energy consumption per square foot, with summary statistics by facility type, major 

Census region, size and age of facility, and energy source. Limitations of current 

CBECS statistics as contained in EIA’s standard reports with respect to benchmarking 

VA facilities include: 1) healthcare facility data is contained in two different 

categories: healthcare (with in-patient and out-patient subcategories), and lodging 

(includes nursing homes/skilled nursing facilities); 2) minimal regional specificity; 

and 3) long time interval between surveys. 

Real Property and Energy Management Scorecards

Externally, progress on how well agencies manage their capital assets and implement 

the elements of real property found in the PMA are tracked quarterly via scorecard 

by OMB. The scorecard provides two ratings. The first rating reflects an overall 

status in how effectively VA is managing its real property. The second rating applies 

to the progress the Department makes each quarter in implementing specific actions 

toward ongoing improvements in real property. The actions are planned and agreed 

upon between VA and OMB each quarter. VA is one of the leaders in real property 

management as it achieved a “Green” status for real property initiatives in the third 

quarter of FY 2006. Only two other agencies had received this real property status. 

OMB has also created a (non-PMA) semi-annual scorecard for tracking federal 

agency energy management performance. As with the real property scorecard, 

agencies receive both a status and progress rating. Agency actions are planned and 

agreed upon with the Department of Energy. VA is currently a leader in energy 

management, having received a “Green” rating for both status and progress achieved 

as of the end of fiscal year 2006. 

Consistent with PMA practices, VA developed an internal real property scorecard 

that captures more detailed level data. The scorecard employs the same, simple 

grading system: green for success, yellow for mixed results, and red for 

unsatisfactory. The scorecards are updated quarterly and guide the Department in 

making management decisions that facilitate progress on this initiative. 

Real Property Performance Results 

VA regularly monitors real property performance and reports to the Office of 

Management and Budget on Federal Real Property Council Tier 1 Measures. VA also 

reports energy cost and consumption and other performance statistics to the 

Department of Energy. In response to the Energy Policy Act of 2005 and the 

Strengthening Federal Environmental, Energy, and Transportation Management 
Asset Management Plan FY 2007

 42

Executive Order, VA re-baselined 2003 energy consumption data for determining 

cumulative percentage decrease in facility traditional energy consumption per gross 

square foot. 

The table below reflects the level of change in each performance area from the 

baseline years. 

Table 4-2: Real Property Performance Results 

 Results Targets 

Organization/Program/Measure

(Key Measures in Bold) 2003 2004 2005 2006 2007 

(Final)

2008 

(Initial) 

Strategic

Target

Percent of space utilization as 

compared to overall space 

(owned and direct-leased) 

N/A 80%

Baseline 98% 100% 95% 95% 95%

Percent Condition Index (owned

buildings) N/A N/A 82%Baseline 79% 84% 85% 87%

Ratio of non-mission dependent 

assets to total assets N/A N/A 22%

Baseline 15% 16% 13% 10%

Ratio of operating costs per 

gross square foot (GSF) N/A $4.52 $4.85 $5.59 $4.52 $4.52 $4.52

Cumulative percentage decrease

in facility traditional energy 

consumption per GSF from the 

2003 baseline 

EPAct 2005 

EO 13423 

Baseline

Baseline

N/A

N/A

N/A

N/A

4.4%

4.4%

4%

6%

6%

9%

20%

30%

Utilization

VA’s FY 2004 baseline performance is 80%; FY 2006 performance was 100%, 

exceeding the target of 95% by 2010. VA changes that resulted in improved 

utilization of space are: 

• VA out-leased 5.2 million square feet in 2006 

• VA generated annual recurring revenue in excess of $900,000 in FY 

2005 and $1.2M in FY 2006 

• VA generated one-time payments of $28M in 2005 and $22.5M in 2006 

• VA reduced vacant space by 15% or 1,301,305 SF between 2004 and 

2005 (Vacant space went up slightly (4%) in FY 2006) 
Asset Management Plan FY 2007

 43

Condition

VA’s FY 2005 baseline performance is 82%; FY 2006 performance was 79%, with a 

target of 87% by 2010. Condition Upgrades are pursued through 

projects/investments as follows: 

• Major (FY 2006 $532M CARES) 

• Minor (FY 2006 $155M CARES) 

• Non-recurring Maintenance (FY 2006 $493M) 

Mission Dependency

VA’s FY 2005 baseline performance is 22%; FY 2006 performance was 15%, on track 

with the target of 10% by 2010. VA changes that resulted in a decrease in non-mission 

dependent assets are: 

• In FY 2006, VA disposed of 6 buildings (658,182 GSF) via sales, 19 buildings 

(124,946 GSF) via demolition and 52 buildings (400,609 GSF) via enhanced-use 

leasing 

• VA completed 12 disposals in FY 2004 and 67 disposals in FY 2005 

Operating Cost

VA’s FY 2004 baseline performance is $4.52 per GSF. For FY 2006, VA’s GSF was 

$5.59, and has a target of $4.52 GSF by 2010. 

Overall, VA’s space requirements exceed the space currently available. VA continues 

to assess current and future real property needs through these management 

initiatives and tools to ensure the Department meets its infrastructure requirements in 

a cost effective manner. 
Asset Management Plan FY 2007

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CHAPTER 5: DISPOSAL 

Disposal is always challenging because of the many parties involved. The local 

community, being one of the important parties to the post-federal use, is also one of 

the keys to the success of VA’s disposal program. Partnering with the local 

community through local private entities, local governments or a combination of both 

allows the orderly transfer of federal property to non-federal use without devastating 

local economies. VA enters into public private ventures with local entities which find 

a compatible reuse purpose for the property and/or buildings as well as providing 

economic, developmental, and environmental aspects to the local communities in the 

form of a potential tax base and compliance with local codes and regulations. 

VA’s Disposal Authority 

Public Law 108-422, signed in November 2004, authorized VA [independent of the 

General Services Administration (GSA)] to dispose of real property and to deposit 

proceeds from the sale, transfer or exchange of VA assets into the Capital Asset Fund 

(CAF). The public law provides VA with much needed incentive by making it 

economically attractive to pursue disposal activities. 

The CAF can be used for current and future disposal transactions, improvements or 

renovations to medical projects with an estimated cost of less than $7 million, and/or 

to appropriate historic properties. The legislation also provides authority for $10 

million to capitalize the expenditure costs associated with the disposal of property 

such as demolition, environmental clean-up, and repair. The authority requires VA 

to comply with Section 11411 of the McKinney-Vento Act, through which the U.S. 

Deptartment of Housing and Urban Development (HUD) surveys all Federal 

landholding agencies (including VA) quarterly, to identify for Congress, the public, 

and private-sector homeless service providers, surplus Federal properties that are 

available for future Federal permits, leases, and transfers to private-sector entities 

(e.g., applicants), so such applicants can use the properties to provide suitable 

homeless services. Additionally, VA is required to submit disposal plans to Congress 

annually, per Public Law 108-422 and accompanying report language. The VA 

disposal plan has two parts: short-term (one year) and long-term (five year). CAMS 

will collect this disposal information from across the capital portfolio. 

VA’s Disposal Policy 

VA developed a real property disposal policy, Managing Underutilized Real 

Property, Including Disposal (VA Directive and Handbook 7633), which provides a 

standard methodology and criteria for identifying appropriate underutilized assets 

for divestment. This policy provides procedures for appropriate management of 

underutilized property including the available options (or authorities) VA may use 

to maintain the highest and best use for its real property portfolio. When a property 
Asset Management Plan FY 2007

 46

is proposed for disposal, other VA entities are given the opportunity to express 

interest in it for an alternative use. 

Other disposal modalities are also evaluated in priority order including enhanceduse leasing, sharing, out-leasing, licenses, permits, easements and transfers (i.e., 

disposal via enhanced-use leasing authority, capital asset fund, state home, and GSA 

authority) as well as like-kind exchanges. If none of these options prove viable, VA 

will make the property available for reuse by other federal agencies. If no other 

agency is interested, VA may utilize deconstruction, mothballing and demolition. 

The capability for initiating, justifying, and monitoring proposals for divestment of 

assets is implemented through CAMS. The disposal policy also provides guidance 

for navigating the complex processes of federal real property disposal. These steps 

include screening for homeless use, environmental and historical status evaluations, 

as well as various notifications to GSA and Congressional committees. 

The disposal stage is not just an afterthought for the Department, as VA must include 

an exit strategy early in the formulation of the project and it is one of the sub-criteria 

found in the capital investment business model. VA has developed guidance and 

protocol for implementing an exit strategy that: 

1. Achieves the fullest possible use of the buildings and land without 

degradation, or undesirable and unintended consequences; 

2. Preserves historic, cultural, and natural aspects of our national heritage; 

3. Achieves a balance between the use and development of scarce 

resources; and 

4. Enhances the quality of renewable resources while working toward the 

maximum attainable recycling of nonrenewable resources. 

Please see Appendix C for tables that summarize actual disposals for FY 2005 and FY 

2006, and planned disposals for FY 2007 and FY 2008. 

As part of the disposal process, VA utilizes a unique capital asset management tool 

called enhanced-use (EU) leasing. 

Enhanced-Use Leasing Program 

 The results of this program include significant cost savings, substantial private 

investment, new long-term sources of revenues as well as jobs or tax revenues for the 

local, state and federal sectors. EU leasing supports the President’s Management 

Agenda by improving VA financial performance and demonstrating 

budget/performance integration. 

Under the enhanced-use leasing authority, VA may lease land or buildings to the 

private sector for up to 75 years. The leased property may be developed for non-VA 
Asset Management Plan FY 2007

 47

uses that are consistent with the mission of the Department. The leased property may 

be developed for non-VA and/or VA uses, and in return for the lease, the Department 

obtains fair value in the form of revenue, facilities, space, services, or other 

considerations. VA continuously explores ways of expanding the use of this integral 

capital asset management tool and streamlining the process. For example, in 

response to a recommendation by the CARES Commission, VA developed a plan to 

re-delegate the authority to execute smaller and less complex enhanced-use leases to 

the regional capital asset managers. A national contracting mechanism was put in 

place to provide these asset managers with the tools (e.g., financial, real estate 

advisement, market analysis, legal support, etc.) they need to successfully implement 

these leases. Other process improvements included the implementation of 

standardized concept plans and templates for common milestones such as public 

hearings and notices to Congress and the public. VA is currently performing 

additional studies at sites where health care delivery options have been realigned 

through the CARES process. These studies are evaluating outstanding health care 

issues, developing capital plans, and determining the highest and best use for the 

unneeded VA property. VA will utilize its enhanced-use lease authority to maximize 

the value of unneeded real property. 

EU Authority

The Department of Veterans Affairs uses a unique capital asset management tool 

called enhanced-use (EU) leasing. The authority to use this mechanism was originally 

enacted in 1991, under Section 8161 through 8169 of Title 38, United States Code (38 

U.S.C. §§ 8161-8169). Renewed in 2001, VA has authority to continue using this 

process until 2011. While this authority allows VA to lease land or buildings to both 

private and/or non-profit sector for up to 75 years, the use of this property must be 

consistent with VA’s mission. Leased property may be developed for non-VA uses, 

and/or VA uses that will enhance the property. 

Though, Congress chose to exempt the EU leasing authority from an array of 

restrictive federal statutes to help provide flexibility in its application. VA must abide 

by all federal environmental laws (e.g., the National Environmental Policy Act and 

the National Historic Preservation Act.) VA is not required to follow typical federal 

acquisition rules when selecting the EU lessee, but VA must use procedures that 

ensure selection process integrity. 

Benefits to VA

The initial results of this program include significant cost savings. VA’s EU leasing 

program is unlike those of traditional government, which offers little more than a 

revenue return in proportion to the depletion of the leased asset. VA’s EU leasing 

program encourages innovative public/private partnerships. In return for the lease, 
Asset Management Plan FY 2007

 48

VA must obtain fair consideration (monetary and/or in-kind) in various forms 

including but not limited to revenue, facilities, space, or services. 

Generally, when an agency generates revenue connected to real property, proceeds 

must be deposited in the U.S. Treasury. Under the EU program, funds received as 

consideration do not have to be returned to the Treasury, but may be kept by VA. 

This provides incentives necessary to encourage government property managers to be 

creative and aggressively pursue opportunities to partner with both private and nonprofit entities. 

The success of the EU lease program depends on sound development of economics. 

The program works best when government requirements can be defined in business 

terms. This allows the private and non-profit sector to construct and operate in its 

customary manner. VA then benefits from the efficiencies of organizations and 

delivery processes that reflect best practices. VA continually improves its process to 

deliver the highest and best use for its assets over time. 

Benefits to Developers and Local Community

An EU lease provides the developer (lessee) with the long-term property interest 

necessary to secure financing through the capital markets, and allows the developer 

to amortize any capital investment made to the property or facility. Although the 

underlying land is still federal property, the facility is subject to State and local taxes, 

which results in an increased tax base for the local community. This in turn, 

facilitates the local community’s ability to provide needed services along with 

substantial private investment, new long-term sources of revenues for the local 

economy, jobs, and tax revenues for the local, state and federal sectors. 

Transparency

A key component of the EU leasing program is close coordination with and 

involvement of the local government and community as full partners in the 

development process. For example, VA must hold a public hearing at the location of 

any proposed EU lease to obtain veteran and local community input. VA also must 

provide a notice to its Congressional oversight committees prior to entering into an 

enhanced-use lease. Close collaboration with community leaders and interested 

stakeholders enables VA to address concerns early in the planning and development 

process. 

Project Types

VA’s variety of projects since the enactment of the EU leasing statute includes: office 

buildings, parking facilities, low-cost senior housing, co-generation (heat and 
Asset Management Plan FY 2007

 49

electricity) energy facilities, single room occupancy housing (homeless shelters), and 

child care and mental health centers. 

VA is currently exploring ways to expand the use of this capital asset management 

tool in the Department and continually working to streamline the complex EU 

process. 

Recent Enhanced-Use Lease Successes 

VA has completed a variety of projects since the enactment of the enhanced-use 

leasing statute, including office buildings, parking facilities, low-cost senior housing, 

co-generation energy facilities, single room occupancy housing (homeless shelters), 

and child care and mental health centers. 

Fort Howard, MD – Life Care Community

In the fall of 2002, Fort Howard inpatient care services were consolidated to other 

campuses within the VA Maryland Health Care System (VAMHS), allowing VA to 

transform the 100-acre campus into a Life Care Community (LCC) through an 

enhanced use lease. The LCC approach includes independent living, assisted living, 

a skilled nursing facility component, and a small community center. 

On September 29, 2006, VA executed an enhanced-use lease with Fort Howard Senior 

Housing Associates, LLC to finance, design, and develop a continuum of senior 

housing totally approximately 1,300 units. This supports the predominant trend in 

senior housing today which is to help seniors stay in one location for as long as 

possible – commonly referred to as aging in place. Veterans and their spouses will 

receive priority placement on all 1,300 units and discounts on 40% of units. In 

addition, the developer will replace the current VA Outpatient clinic with a new 

facility, and hold 10-acres for potential future use as a Maryland State Veterans 

home. 

Through this lease, VA will provide additional affordable housing for veterans and 

senior citizens in the State of Maryland, obtain a new 10,000 square feet outpatient 

clinic, and eliminate current VAMHCS maintenance, repair, and utility costs 

associated with the Fort Howard campus. This project will save VA an estimated 

$1,500,000 in construction cost savings as well as a cost avoidance of approximately 

$1,000,000 annually. The current waiting list to join the LCC is over 500 veterans. 

Leavenworth, KS Mixed-Use Development

On August 5, 2005, VA signed an enhanced-use lease with the Eisenhower Ridge 

Association (ERA) to renovate 38 underutilized buildings and to adaptively reuse 

historic properties located on approximately 50 acres of land. This mixed-use 
Asset Management Plan FY 2007

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development will provide services and accommodations relating to affordable senior 

housing, long-term care, transitional veterans housing with supportive services, 

long-term veteran housing, educational and community support facilities. 

This lease will result in the reuse of buildings listed on the Federal National Register 

of Historic Places as well as expansion of services to veterans. The project will also 

result in additional land (without historical buildings) to become available to the 

Leavenworth National Cemetery for additional gravesites for veterans and for a 

columbarium. 

Current Enhanced-Use Leasing Projects 

Secretary’s Approved Priority List and Awarded Enhanced-Use Leases

Enhanced-use lease projects that have been identified as Departmental priorities by 

the Secretary represent concepts that will be further developed to leverage VA assets 

to engage private business to meet VA requirements and needs. A listing of the 

Secretary’s approved priority list of enhanced-use leasing projects can be found in 

Appendix D. As further analysis is conducted, projects may be added, modified or 

deleted from this list. There are additional projects, particularly in light of the 

CARES decisions, that VA continuously assesses for potential priority consideration. 

These projects will require notification to Congressional oversight committees prior 

to entering into an enhanced-use lease. 

Awarded Enhanced-Use Leases

A list of enhanced-use lease projects that have been awarded since the inception of 

the program can also be found in Appendix D. 

Capital Asset Realignment for Enhanced Services 

The Capital Asset Realignment for Enhanced Services (CARES) initiative—a 

strategic planning process—provided a data-driven assessment of veterans’ health 

care needs within geographic markets, assessed the condition of the infrastructure, 

and produced recommendations for the strategic realignment of capital assets and 

related resources to better serve the needs of veterans. This process identified the 

necessary infrastructure to provide high-quality health care to veterans where it is 

most needed now, and in the future. 

Through CARES, VA bases its plan for enhanced health care services on objective 

criteria and analysis as well as cost-effectiveness, and in some cases, significant 

capital asset restructuring. These plans take into account future directions in health 

care delivery including changes in technology, demographic projections, physical 
Asset Management Plan FY 2007

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plant capacity, community health care capacity, facility condition assessments, and 

workforce requirements. 

CARES has been completed for all but the 18 follow-up studies in June 2004. The 

CARES process advances VA’s efforts to ensure the continued availability of 

quality health care for our nation’s veterans. 

All VA sites, except for the 18 sites selected for follow-up studies, have approved 

CARES missions and VA is implementing its capital asset management philosophy 

to meet the current and future demands. 

CARES Re-use Studies 

Background

As part of VA’s continued CARES effort to realign its medical campuses to better meet 

the healthcare demands of veterans, VA has been conducting the CARES studies in 

pursuit of creating efficient, cost-effective and appropriately sized footprints for its 

campuses thereby identifying enhanced-use leasing opportunities. The original 18 

CARES site studies pursued evaluating outstanding health care issues, developing 

capital plans, as well as determining the best use for the underutilized and excess land 

and vacant buildings on each site. There were nine sites evaluated for general reuse and 

nine sites evaluated for comprehensive reuse. 

The Office of Asset Enterprise Management was charged with hiring a real estate 

advisor to conduct a three-phase analysis on the nine comprehensive reuse sites. 

The three phases of the study include: 

3⁄4 Phase 1 Data Collection and Planning Analysis 

3⁄4 Phase 2 Reuse/Redevelopment Potential 

3⁄4 Phase 3 General Reuse/Redevelopment Option 

Status

Following is a summary chart of the status of each of the CARES Reuse Sites: 
Asset Management Plan FY 2007

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CARES SITES

SECRETARY'S 

DECISION 

Closed 

@ 

Stage 1

Continue 

with 

Stage 2

Reuse 

Opportunities

4 Canandaigua, 

NY 5-Oct-06 No Yes Yes

6

Lexington, KY 30-May-07 No No Yes

17 West Los 

Angeles, CA 1-Feb-07 No

Yes, but 

without reuse 

Phase 3 Yes

7

Livermore, CA 13-Jul-06 No Yes Yes

10

Montrose 

Castle Point, NY 1-Feb-07 No Yes Yes

12

Perry Point, MD TBD Yes No Yes

14

St. Albans, NY 11-Aug-06 Yes

No, joint 

memo issued 

incl. OAEM Yes

18

White City, OR 22-Jul-06 Yes

No, joint 

memo issued 

incl. OAEM Yes

5

Gulfport, MS 

1

Big Spring, TX 20-Apr-06 Yes No No

2

Boston, MA 29-Jul-06 Yes

Yes, further 

study Yes

3 Brooklyn/ 

Manhattan, NY 11-Aug-06 Yes

No, joint 

memo issued No

8

Louisville, KY 30-Jun-06 Yes No Yes

9 Montgomery, 

AL 13-Jul-06 Yes No No

11

Muskogee, OK 21-Dec-06 Yes No No

13 Poplar Bluff, 

MO 21-Dec-06 Yes No No

15

Waco, TX 1-Dec-06 Yes No Yes 

Develop Capital Investment proposal to Yes, OAEM is 

Submit Capital Investment proposals 

(BPO3): combination of new construction and 

renovation of DOM, some demolition

CARES study ended due to Hurricane 

Katrina; PL 109-234 Sec. 234 directs the 

Secretary to transfer property to City of 

Gulfport

General Reuse

Inpatient services to remain and consider 

expanding mental health services

Retain existing medical centers in both 

Brooklyn and Manhattan. Prepare plan for 

continued service integration

Build a new hospital; site selection 

committee established by the USH

Continue inpatient services and modernize 

the facility

Keep facility and implement increase in 

psychiatric beds

Secretary's Decision Made at LAP 2 to keep 

the facility

Retain all current services. Create Center for 

Excellence for Post Traumatic Stress 

Disorder. Pursue re-use of vacant land and 

buildings through Enhanced Use Leases(s)

Study five options at Montrose for new 

construction and/or relocation of residential 

and ambulatory care facilities and two 

options at Castle Point for replacement 

facility and new nursing home

Upgrade entire campus, continue nursing 

home project, and complete reuse plan

Develop Capital Plan for New Construction 

(BPO4): New residential and outpatient/clinic 

building, new nursing home, domicilliary, 

some demolition, and reuse plan for the 

campus

CARES Comprehensive Reuse Site Status

Rejected proposal to consolidate all services 

to one facility. Consider several options to 

modernize facilities

Secretary's Decisions

Comprehensive Reuse

Study five options: replace inpatient and 

outpatient services in new and/or renovated 

facility,

Replace the inpatient and outpatient 

facilities; all new construction will be on SE 

portion of campus. Existing buildings and 

part of campus will be available for reuse 

after construction is completed.

Decision made to move forward into Stage 2 

on the capital planning reuse portion of study 

placed on hold 

Study three options: Renovate or relocate 

NHCU on campus or colocate new facility 

with CBOC in Central Valley

16

Walla Walla, WA 7-Jul-06 Yes

No, joint 

memo issued

working with the 

VISN

construct new CBOC for primary, specialty 

and mental health care
Asset Management Plan FY 2007

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Outside firms were awarded contracts to assist the Secretary in reaching a decision by 

assessing the health care, capital planning and reuse options for each site. CARES 

reuse sites were identified early on as being either general or comprehensive reuse. 

Those general sites in which only the health care delivery options needed further 

analyses were Big Spring, TX; Boston, MA; Brooklyn/Manhattan, NY: Louisville, KY; 

Montgomery, AL; Muskogee, OK; Popular Bluff, MO; Waco, TX; and Walla Walla, 

WA. Those comprehensive sites requiring the development of a comprehensive 

capital plan were Canandaigua, NY; Lexington, KY; West LA, CA; Livermore, CA; 

Montrose/Castle Point, NY; Perry Point, MD; St. Albans, NY; White City, OR; and 

Gulfport, MS. 

The OAEM website contains the completed reuse reports. More will be posted as 

they become available. 

Another form of disposal is the federal asset sales initiative. 

Federal Asset Sales Initiative 

Background

Each year, the federal government sells personal and real property assets to the 

public, valued at billions of dollars. The Federal Asset Sales (FAS) initiative was 

added to the President’s Management Agenda (PMA) on E-GOV to address the 

currently decentralized approach of federal agencies using individual methods to sell 

these assets and provide related-asset sale information The FAS initiative intends to 

identify a centralized sales and reporting environment for federal real property and 

personal property assets. VA is among the few federal agencies with the authority to 

sell its real property assets independent of the General Services Administration 

(GSA). VA also reports asset disposals—including sales—in the annual FRPC 

reporting requirements. 

Current VA Environment

VA had already migrated to GSA (a designated FAS Sales Center) to sell VA surplus 

personal property. GSA is the sales agent for VA personal property and has 

responsibility for reporting. 

VA does not market residential loan guaranty properties directly through GSA and 

cannot do so due to contract restrictions with their loan servicing company. VA is the 

sales agent for residential real property. VA listings are linked to the FAS website. 

No reporting of residential sales is currently provided. 

Using its authority, VA has responsibility for the sale of buildings and land real 

property. All VA facility disposals are reported for FPRC purposes annually. There 
Asset Management Plan FY 2007

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is no link to the FAS website. Currently, there is no reporting of these sales to GSA 

for FAS purposes. 

In FY 2006, VA developed a Federal Asset Sales GSA Summary and VA Strategy; 

provided a strategy to OMB; and developed FAS implementation milestones for VA 

real property. VA has proposed to maintain its residential, buildings, and land real 

property sales authority independent of the FAS initiative. VA will continue to link 

residential sales to the FAS web site. VA will comply with additional FAS reporting 

requirements either through electronic reporting or manual entry to the FAS 

database. 
Asset Management Plan FY 2007

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CHAPTER 6: MANAGEMENT TOOLS AND INITIATIVES 

Capital Asset Management System 

In September 2004, VA completed implementation of a state-of-the-art capital asset 

management system (CAMS). The CAMS has the inter-portfolio capability to view 

assets by their life cycle stage and across different asset type portfolios. Data is 

captured at the individual site level and structured in a relational database so that a 

full range of views, such as alpha and numeric sorts and roll-ups are possible. 

One of the more successful features of CAMS is its ability to use existing source 

systems data. Local data managers can continue to use already familiar systems, and 

CAMS performs regular electronic extracts of that data for analysis and reporting 

purposes. VA’s Office of Asset Enterprise Management (OAEM) has worked in close 

collaboration with other VA offices to ensure the validity and integrity of the data 

sources that feed into CAMS. OAEM issues periodic data calls supported by Q&A 

teleconferences and written guidance posted to the OAEM web site. CAMS extracts 

the following key capital asset-related data from several Departmental and VA 

Administration data sources: 

• General – Inventory 

• Condition 

• Financial Data 

• Workload (projections, planned, actuals) 

• Utilization 

• Energy Usage 

CAMS allows for web-based input of concept papers, planning, and acquisition 

business case applications. The data is organized, analyzed, and presented to track 

and monitor VA’s assets against performance goals within and across asset types and 

administrations. Crystal reports can be created, providing polished reports for 

viewing and presentations. 

CAMS provides several outcomes that result in improved service delivery to veterans 

and increased financial accountability to the general public. The impact of this 

innovative technology is demonstrated by CAMS ability to: 

• Integrate asset management and governance at multiple levels 

• Improve financial and analytical capability 

• Improve performance management 

• Provide for increased and better-informed decisions 

• Improve service delivery 

The CAMS initiative supports the President's Management Agenda and Executive 

Order 13327, Federal Real Property Asset Management, the Energy Policy Act of 2005 
Asset Management Plan FY 2007

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and Executive Order 13423, Strengthening Federal Environmental, Energy, and 

Transportation Management, and the Federal Asset Sales Initiative. In FY 2005, VA 

implemented the FRPC Tier 1 goals and aligned VA and FRPC goals. In FY 2006, VA 

incorporated the additional disposal data elements required for FRPC reporting and 

implemented environmental and life safety performance measures to show 

compliance of VA buildings. Also in FY 2006, automated Energy Star quarterly 

reporting and EPAct2005 Annual Energy Performance reporting were integrated with 

real property management. Disposal reports, including actual and planned assets for 

disposal, were generated from CAMS in FY 2006, and Federal Asset Sales reporting is 

being added in FY 2007. These improved integrations promote consistent data and a 

complete picture of real property performance. 

Electronic reporting is also feasible and has been demonstrated. VA submitted an 

XML file to the GSA in FY 2005 and FY 2006, reporting FRPC requirements. In FY 

2006, VA also submitted an electronic file for Energy Star ratings to Department of 

Energy (DOE) and received ratings in return. Annual Energy Consumption Reports 

are now created in CAMS. VA’s goal is to electronically submit those in the future. 

CAMS is the main factor that allows VA to comply with this type and degree of asset 

performance measurement. VA is one of the leaders in real property management as 

it achieved a “Green” status for real property initiatives in the third quarter of FY 

2006. Only two other agencies have received this real property status. Within VA, 

CAMS has already had an impact on capital asset data management. Inventories 

have been improved, related costs are being more accurately tracked and numerous 

pre-existing asset-related databases have been linked and coordinated. The CAMS 

process has generated a renewed focus on capital asset matters at all levels of the 

Department. 

Reporting 

CAMS is the Department’s recognized system for tracking and reporting capital 

assets across their lifecycle. CAMS is a web-based portfolio management system that 

facilitates asset management at all strategic levels within the organization. Each 

organizational level may be interested in viewing specific performance goal and 

various health measure reports. The system is designed to provide these views for 

each level in order to facilitate the management of assets and produce an improved 

portfolio of assets. Current performance and trends in asset performance can be 

determined using available system tools such as scorecards and investor maps. 

VA senior managers and administration authorities have the ability to access the 

system and review performance of various asset categories in their network. They 

take a front-line approach to ensuring that assets are performing as expected. 

Performance achievement is quantified in the system and can be measured to 
Asset Management Plan FY 2007

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determine if goals and expected gap closures are being met. The frequency of this 

review can be determined by the field users. 

Higher level management at the Administration and Department level is more 

concerned with performance at a more global level of review. Performance of entire 

categories of assets can be compared and viewed. If performance issues arise, 

information can be drilled down to determine the specific asset for which corrective 

action may need to be taken. Portfolio management decisions can be determined 

based on reports generated at this level. For instance, decisions such as identifying 

assets for disposition based on investor maps derived from CAMS. 

VA reports capital asset performance in executive-level (Deputy Secretary) monthly 

performance reviews on a quarterly basis. The report highlights asset performance on 

VA’s portfolio goals and on FRPC and energy measures. The report identifies regions 

with asset performance outside 10% of VA’s strategic targets. Explanations or action 

plans to address outlying performance are included in the report. VA provides 

regular asset performance reports to the Office of Management and Budget for the 

President’s Management Agenda Real Property and Energy Initiatives. CAMS 

enables VA to respond to ad hoc report requests from Congress, the Government 

Accountability Office, and others. 

VA Human Capital Strategy 

The Department has taken several actions to ensure project managers, capital asset 

managers, and procurement officials have the proper training and skills necessary in 

order to carry out their positions effectively. The actions are as follows. 

Training

Training is an integral part of human capital strategy. VA staff receives the necessary 

capital training both in-house and through the private sector. One example of inhouse training is the instruction provided on CAMS, which is essential for capital 

asset managers to implement sound operational policies for the effective management 

of departmental assets. The goal of this training is to orient staff of the new Capital 

Asset Management Offices to their roles in VA’s capital investment process and 

provide any user with a working understanding of VA’s CAMS. The training session 

is also used to create a mindset of monitoring assets based on their performance and 

identifying when an asset is no longer fit to operate. 

Another example of instruction provided by VA is the comprehensive training 

seminars on the preparation of the Exhibit 300 business cases to ensure each 

application is completed consistently and successfully. VA has also developed a 

Capital Investment Methodology Guide to serve as a reference for preparing capital 

investment applications. This guide is available online to all VA users and explains 
Asset Management Plan FY 2007

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the investment process, decision-making criteria, and step by step instructions on 

how to complete VA business cases. The specific link is provided in Appendix F. 

Contracting Specialists also receive training in order to perform VA acquisitions for 

leases, agreements and construction. Mandatory courses include acquisition 

planning, contract formulation, price analysis, contract negotiation techniques, cost 

analysis, contract administration, and contract law. 

VA sets high standards for its capital asset managers, project managers and other 

positions that have a capital-related function. For example, VBA Facilities 

Management staff have, or are in the process of completing, Project 

Management training, a seven-course curriculum associated with George Washington 

University, resulting in formal certification. Procurement and contracting officials 

above the GS-13 grade, are required to have warrants to enter into contracts and hold 

a 4-year bachelor’s degree supplemented by at least 24 semester hours in any 

combination of the following fields: accounting, business, finance, law, contracts, 

purchasing, economics, industrial management, marketing, quantitative methods, or 

organization and management. Contracting staff who do not meet these educational 

prerequisites will have to meet the basic requirements in order to qualify for 

promotion to a higher grade. Waivers can be granted if an applicant can demonstrate 

specialized experience and the applicant possesses significant potential for 

advancement to levels of greater responsibility. 

Guidance and Policies

VA has established capital policies that provide VA staff the rules, appropriate 

procedures and management tools related to effective capital asset management. This 

includes the key directive, Capital Asset Management. This directive was issued in 

August 2003 and established a uniform framework for VA’s capital asset policies, 

standards, and business practices. The VA-wide Capital Asset Management policy 

requires all offices to ensure decisions and initiatives are planned and executed with 

the goal of constructing a corporate capital asset portfolio of maximum functional and 

financial value. It also assists in ensuring all VA capital asset management policies 

complement the Department-wide framework. The policy incorporates common 

government-wide terminology (such as “portfolio management,” “life-cycle 

management,” and “cost-effectiveness analysis”) to ensure consistency and a uniform 

capital investment process. In addition, the policy states that decisions regarding 

investment, management, and disposal of VA’s capital assets will be based on a 

corporate capital asset programming framework built from a uniform set of key 

components, reflective of the following four principles: 

Life-Cycle Management. Policies, procedures, and business practices should 

facilitate effective management of capital assets at all life-cycle stages (formulation, 

execution, steady state, and disposal). A life-cycle management approach 
Asset Management Plan FY 2007

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incorporates asset management practices to monitor and assess asset performance 

using operational and financial criteria (e.g. utilization, functionality, condition, 

value, and cost of asset ownership). 

 

Empowerment of Accountable and Qualified Asset Decision-Makers. All VA 

offices must internally identify the specific offices and/or positions within their 

organization, as well as their scope of responsibility and level of accountability that 

provide capital asset-related functions and skills. The goal is to ensure VA has the 

professional staff with sufficient knowledge, training, skills, and expertise to ensure 

the integrity of VA’s capital asset management system. 

Due Diligence. Stewardship of VA’s capital asset portfolio requires “good-faith” 

compliance with applicable laws, regulations, policies, and procedures; full 

accounting of all costs; prudent oversight and evaluation; and strong administrative 

controls. “Due diligence” reviews will be conducted by the Administrations and staff 

offices. Reviews will cover a wide range of issues (e.g., checklists and protocols for 

environmental requirements; assessments; liabilities; impacts; property entitlements 

or encumbrances; and closing documentation needs) as appropriate. 

 

Maximizing Benefits to Veterans. Maintaining VA’s capability to perform missioncritical functions and seeking to effectively and efficiently maximize benefits to 

veterans should always be the primary consideration in every capital asset-related 

decision. 

Energy Initiative 

Background

Prior to 2005, the Energy Policy Act of 1992 and a series of five executive orders (the 

“Greening the Government” series) served as the impetus for urging the nation’s 

largest energy consumer, the federal government, to significantly improve its energy, 

environmental and transportation fleet (EE&T) management. The purpose of these 

mandates was to save taxpayer dollars, encourage development and deployment of 

new and improved technologies, reduce energy consumption intensity, and reduce 

emissions that contribute to air pollution and global climate change. 

Changing Policy Landscape

On August 28, 2005, the President signed the Energy Policy Act of 2005 (EPAct 2005), 

adding a new and stronger focus to federal agencies’ efforts. The significant 

requirements from EPAct 2005 include: 

• reducing energy consumption intensity by 2% annually from FY2006 through 

FY2020 (compared to a FY2003 baseline); 
Asset Management Plan FY 2007

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• metering of electricity in all federal buildings to be in place by 2012; 

• reaching a renewable electricity goal of 3% of total electricity consumption for 

FYs 2006-2009, 5% in FYs 2010-2012, and 7.5% each fiscal year thereafter; 

• requiring new buildings to be 30% more efficient than industry standards for 

heating/cooling (ASHRAE 90.1-2004); and 

• installing 20,000 solar photovoltaic systems on federal buildings by 2010. 

Federal agency reporting on these and other EPAct 2005 requirements began in FY 

2006. 

In January 2007, OMB issued executive order (EO) 13423, which supersedes and 

consolidates all previous “Greening the Government” EOs. EO 13423 imposes new 

and more stringent mandates in the areas of EE&T. The Office of the Federal 

Environmental Executive (OFEE) issued accompanying detailed instructions for 

implementation in March 2007. These instructions are an integral part of the EO and 

implementation is mandatory. Related guidance from DOE on renewable energy and 

several other topics, originally due by mid-April, is now due at the end of June. 

Water conservation guidance is due at the end of September. These guidances contain 

significant details and will impact how agencies address the new reporting 

requirements and performance metrics. 

EO 13423 imposes the following new energy mandates: 

• Reduction in greenhouse gas emissions via 3% annual reduction in energy 

consumption intensity beginning in FY 2006, or 30% by 2015, vs. FY 2003 

baseline. 

• Reduction in annual water consumption intensity by 2% beginning in FY 

2008, or 16% by 2015, vs. 2007 baseline. 

• Requirement of 50% renewable energy consumption to come from new 

sources (in service date of January 1999 or later). 

Energy Management Program 

Energy Management Task Force and Action Plan

Efficient energy management and increased energy conservation allow more of VA’s 

limited resources to be directed toward providing high quality services to veterans. 

In response to EPAct 2005, VA established a Department-wide Energy Management 

Task Force to meet the new requirements by accelerating the adoption of energy 

efficiency practices, prudent energy investments, and sustainable design and practices 

throughout VA. The Energy Management Action Plan authored by this new task 

force and approved in September 2006 serves as VA’s blueprint for meeting federal 

mandates and achieving internal goals. The task force is addressing the new 

mandates of EO 13423 by updating the Action Plan and coordinating implementation. 
Asset Management Plan FY 2007

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The Action Plan addresses VA’s five major energy challenges: 1) identifying what 

types of energy VA uses and their associated costs; 2) optimally managing energy 

systems; 3) purchasing energy wisely; 4) making prudent energy investments; and 5) 

implementing renewable and alternative energy purchasing and projects. For each 

challenge, there is a working subcommittee that has already made noteworthy 

progress in defining the challenge, deciding how best to meet it, coordinating efforts 

across VA, and improving the quality of existing initiatives. 

Reporting

In FY 2004, VA began reporting agency-wide energy achievements in concert with 

VA’s commitment to portfolio management. With the Department-wide energy 

management program and energy management task force in place, VA is better 

positioned than ever before to meet its energy challenges successfully. 

In FY 2006, VA made several system changes to more precisely report energy costs 

and consumption to the Department of Energy (DOE). New energy-related budget 

object codes (BOCs) were created and existing energy-related BOCs were revised to 

collect and report a variety of energy costs. New reporting categories were created in 

CAMS to separate building, non-building and total energy costs. Finally, new 

categories of energy consumption data were added to the VHA Support Service 

Center database to collect and report increased consumption details. The expanded 

energy data will be reported to DOE in FY 2007. 

Benchmarking

In FY2006, VA began an automated benchmarking process in partnership with the 

EPA Energy Star program. Using online tools and computer programming, VA has 

implemented quarterly energy benchmarking of all its hospitals. 

Resources

VA’s 2008 budget includes $25 million in the Medical Care appropriation to improve 

the Department’s ability to better manage its assets to improve energy efficiency. 

These resources will be allocated in accordance with the recommendations of the VA 

Energy Management Task Force and Action Plan. 

VA Energy Program Management

OAEM continues as the lead energy policy and program office. OAEM is 

participating in intra-agency workgroups and related sub-group meetings including 

the Inter-Agency Energy Management Task Force, the Federal Energy Savings 

Performance Contracts (ESPC) Steering Committee, the Federal Energy Management 

Advisory Committee, and several sustainability working groups. OAEM is updating 

the existing energy management program, policies, directives, and handbooks that 

provide guidance on energy issues to reflect the EPAct 2005 environment and lessons 

learned to date. With EO 13423, a number of additional updates are now necessary 

as well to reflect those new mandates, pending finalized instructions and guidance 

from OFEE and DOE, respectively. 
Asset Management Plan FY 2007

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VA Created National Energy Contracting Office

Accomplishment of VA’s energy program activities is being facilitated with services 

provided by VA’s new Cleveland-based National Energy Business Center (NEBC), 

dedicated to serving all of VA’s energy contracting needs, such as contracting for 

energy assessments, for ECM implementation via alternative financing, and for 

measurement and verification of energy savings. The Center will also facilitate 

implementation of on-site renewable energy projects and other renewable energy 

initiatives. Based on results of feasibility studies, VA will solicit proposals for sites 

where significant savings are projected on a national basis. 

Sustainability/Alternative Fuel Vehicles

As a signatory to the 2006 Sustainability Memorandum of Understanding (MOU), VA 

was already on its way to incorporating sustainability-based improvements in facility 

design and operation when EO 13423 mandated that agencies abide by the MOU. An 

internal working group drafted a Green Buildings Action Plan, the implementation of 

which is now the responsibility of a new Department-wide Green Buildings Council, 

and an updated sustainability design guide is under development. 

Likewise, VA has jumpstarted its alternative fuel vehicle fleet efforts by implementing 

forward-looking purchasing and a database that will help track efforts to meet the 

alternative fuel consumption mandates set in EO 13423. 

Collaboration with Department of Defense

There have been many efforts by Congress and the Executive Branch to target 

increasing cooperation and sharing between VA and the Department of Defense 

(DoD) in order to improve the efficiency and cost-effectiveness of health care 

delivery for beneficiaries. 

The President established a task force to identify the forces that present challenges to 

cooperation. The President’s Task Force to Improve Health Care for Our Nation’s 

Veterans was established by Executive Order 13214 on May 28, 2001. To formalize 

this goal and institutionalize collaboration between Departments, the President made 

“Coordination of Veterans Affairs and Defense Programs and Systems” one of the 15 

management initiatives in the President’s Management Agenda. The Task Force was 

charged with identifying opportunities for improved coordination between the two 

departments as well as barriers and challenges that impede VA/DoD coordination. 

The Task Force completed its work and submitted the final report to the President in 

May 2003. In pursuit of the President’s Management Agenda and in concert with the 

Task Force’s organizing principles, the VA/DoD Construction Planning Committee 

(CPC) was created under the VA/DoD Joint Executive Council (JEC). The CPC was 

established to provide formalized structure to facilitate cooperation and 
Asset Management Plan FY 2007

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collaboration in achieving an integrated approach to capital coordination that 

considers both short-term and long-term strategic capital issues and is mutually 

beneficial to both departments. The primary focus of this group is to ensure 

collaborative opportunities for joint capital asset planning are maximized. The CPC 

also serves as the clearinghouse for the final review of all joint capital asset initiatives 

submitted by any element of the JEC. The CPC is comprised of individuals with 

comprehensive knowledge of relevant policy issues within their respective agencies 

with regard to capital asset planning, investment, and management. 

The CPC identified opportunities and challenges to capital collaborations for FY 2006 

through 2010 and is working to establish overarching funding principles applicable 

to joint collaborations. The CPC assesses DoD’s excess real property identified 

through the Base Realignment and Closure (BRAC) program in meeting VA 

requirements. The CPC also serves as the clearinghouse for review of construction, 

leasing, and real property dispositions proposed by any element of the VA/DoD JEC 

structure. 

VA/DoD Joint Strategic Plan 

The VA/DoD Joint Strategic Plan targets the improvement of management of capital 

assets, procurement, logistics, financial transactions, and human resources. The CPC 

has a need to identify collaborative construction initiatives and pilot a core group on 

three sites identified through the CARES and BRAC processes. This core group will 

facilitate the successful formulation of three major initiatives. 
Asset Management Plan FY 2007

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CHAPTER 7: RECENT ACCOMPLISHMENTS AND FUTURE GOALS 

Since the publication of VA’s first AMP, the Department has made increased progress 

in managing its real property at strategic and programmatic levels. In keeping with 

guidance from the FRPC, the Energy Policy Act of 2005 and other federal mandates, 

VA accomplishments address the specific areas of: 1) capital projects leading to 

increased asset performance; 2) asset disposal; 3)improving energy efficiency and 

reducing environmental impact; and 4) performance measures and reporting. Below 

is an overview of recent strategies and their respective program and technical 

accomplishments that shows recent VA progress. 

Recent Accomplishments 

Capital Projects Leading to Increased Asset Performance

Capital Asset Realignment for Enhanced Services (CARES) 

• Implemented CARES Program – thirty-six projects, not including Gulfport 

or New Orleans, are in process: 

o One project is complete; 

o One project is on hold awaiting further cares study; 

o The status of the remaining thirty-four is as follows: 

 Construction documents – 6, 

 Construction – 14, 

 Schematics/Design Development – 14, 

o Eighteen Sites were selected for further study with one site (Gulfport), 

lost to Hurricane Katrina. 

• Nine General Reuse site studies have completed their Stage I review with 

some final decisions: 

o Five sites: Big Spring, TX; Brooklyn/Manhattan, NY; Montgomery, AL; 

Muskogee, OK; and Poplar Bluff, MO, via the Secretary’s decision have 

concluded their study with no change to current operations. 

o Current services at Waco, TX are being retained and meet requirements 

for a Center of Excellence for Post-Traumatic Stress Disorder. 

 Waco, TX was also directed to pursue reuse of vacant buildings 

and land through VA’s Enhanced-Use Lease Program. 

o The Secretary directed Walla Walla, WA to use existing contracting 

authority to provide inpatient and nursing home care and to explore 

partnerships and other opportunities to utilize the historic campus. 

o Louisville, KY’s decision is not going to Stage 2 as it is a replacement 

hospital. 

o Boston, MA is proceeding to Stage 2. 

• Eight Comprehensive Reuse sites are being assessed; the ninth site, 

Gulfport, MS, was removed from the study due to Hurricane Katrina: 

o West Los Angeles, CA has not had the Secretary’s decisions announced. 
Asset Management Plan FY 2007

 66

o Three sites: Livermore, CA; Canandaigua, NY; and Montrose/Castle 

Point, NY, have been or are being evaluated under the Price 

Waterhouse Cooper’s Stage 2 contract. 

o In White City, OR, the Secretary directed that a capital plan be 

developed that: 1) combines new construction and renovation; 2) 

replaces several domiciliary buildings through new construction; and 

3) expands ambulatory specialties and outpatient mental health 

services. 

 The Master Plan should consider enhanced-use leasing 

opportunities that are currently being looked at by the Reuse 

Contractor under Phase 3 Reuse/Redevelopment. 

o In St. Albans, NY, the Secretary directed that a capital plan for new 

construction be developed for the new nursing home, domiciliary and 

outpatient clinic. 

 The site is leading the effort, designing the new medical 

components of the campus and the Reuse Contractor has 

developed the Phase 3 Reuse/Redevelopment Report. 

o In Lexington, KY, the Secretary directed that the inpatient and 

outpatient facilities be replaced; all new construction will be on the 

southeast portion of campus. Existing buildings and part of campus 

will be available for reuse after construction is completed. 

o VA acquired 4.3 acres of land adjacent to the James A. Haley Veterans’ 

Hospital, Tampa, Florida to relocate ambulatory care and 

administrative services to existing buildings on the site and expand the 

hospital parking. 

o A lease contract for 28,000 square feet of clinic space for the Knoxville, 

Tennessee, outpatient clinic was awarded. 

Enhanced-Use Leasing 

• Created the Concept Proposal Review Committee (CPRC) to streamline 

internal concurrences for EUL projects. 

• Awarded EUL projects of various complexities. 

• Developed “templates” EUL agreement, request for proposal, and bid 

terms agreement to streamline the selection process as well as reduce 

negotiation time. 

• Assisted with CARES sites for Reuse coordination and evaluation with 

proposed capital improvements at nine VAMC sites. 

• Developed Post Transaction Oversight Tool (PTOT) – Desktop tool to 

efficiently and effectively monitor and comply with the terms of the 

executed EU leases. 

Physical Security - Progress has been made by VHA in the area of physical 

security for federal real property assets, demonstrating leadership in multi-hazard 

protection of VA facilities. Accomplishments are as follows: 
Asset Management Plan FY 2007

 67

• Developed Physical Security Assessment Methodology for VA Facilities, 

September 2002. 

o This multi-hazard risk assessment process includes identifying and 

ranking risks and vulnerabilities, with suggested remedial actions to 

mitigate the major vulnerabilities at prioritized mission critical 

facilities. 

• FEMA requested VA assistance to evolve VA’s assessment process into a 

system suitable for both private and other public facilities: 

o This collaborative effort resulted in FEMA’s Reference Manual to 

Mitigate Potential Terrorist Attacks Against Buildings (FEMA 426; 

Published December 2003) and Risk Assessment: A How-To Guide to 

Mitigate Potential Terrorist Attacks (FEMA 452, Published January 

2005). The Department of Homeland Security took the unusual step of 

placing VA’s seal with theirs on the cover of FEMA 452 to express’s 

their appreciation of VA’s assistance. 

• Beginning in FY 2005, VA included funding for Physical Security 

Enhancements in the Major Construction Program budget request. 

• Completed Physical Security Assessments of 140 VA’s most mission critical 

facilities in 2006 

• Secretary concurred in VA Physical Security Strategies Report in May 2006. 

o The report outlined 24 elements to enhance the protection of VA 

facilities and improve their ability to remain in operation and protect 

the safety of veterans, staff, and visitors. This program includes 

requirements for four categories of VA facilities, both new and existing, 

mission critical, which must remain in operation, and life safety 

protected facilities. 

• Completed final draft of Physical Security Design Manual in December 

2006. 

o The manual is based on the Physical Security Strategies Report. 

Physical Security Design Manual and related Design and Construction 

Standards are to be issued in the second quarter of FY 2007. 

Hurricane Assessments 

VA has conducted hurricane assessments of its medical centers and major clinics 

located in hurricane prone locations. These assessments identified current 

capabilities, deficiencies and recommended mitigations to upgrade infrastructure to 

improve the capability of the facilities to remain in operation after a major hurricane 

and related flooding emergencies. Estimated strategic budget projections to 

remediate deficiencies were also included in the report. Major infrastructure systems 

and cost breakdowns included: 

• Standby power; full electrical system and fuel storage; 

• Water: potable, industrial, sewage – supply and/or storage; 

• Enclosure: building skin, glazing, roof, canopies, etc.; and 

• Flood protection. 
Asset Management Plan FY 2007

 68

Asset Disposal

• Developed a real property disposal policy, Managing Underutilized Real 

Property, Including Disposal (VA Directive and Handbook 7633). The real 

property disposal policy provides a standard methodology and criteria for 

identifying appropriate underutilized assets for disposal. 

• Disposed of 67 buildings in FY 2005, 77 buildings in FY 2006, and nine 

buildings in FY 2007 (year-to-date). 

Improving Energy Efficiency and Reducing Environmental Impact 

• Developed an Energy Management Action Plan that is serving as a blueprint 

for meeting federal mandates and achieving internal goals. 

• Established a National Energy Acquisition Office to provide energy-related 

contracting services for all of VA. 

• Prepared a Green Buildings Action Plan, established a Green Building Council 

to facilitate implementation, and began development of updated sustainability 

design guidance. 

• Significantly increased acquisition of alternative fuel vehicles, and created an 

enhanced database to help track efforts to meet all fleet alternative fuel 

mandates. 

• Developed placement plan and position description for energy managers to be 

added in locations around the country. 

Performance Measures and Reporting

• Fully complied with FRPC requirements to track and report asset inventory 

and performance at the constructed-asset level in FY 2005 and FY 2006. 

• Implemented a capital asset performance review on a quarterly basis in 

Monthly Performance Reviews at the executive-level. 

• Updated data source systems to comply with additional FRPC reporting 

requirements. 

• Updated CAMS to meet energy reporting requirements. 

• Updated CAMS to track and report environmental and life safety compliance. 

• Updated lease benchmarks. 

Veterans Health Administration

• Facility Condition Assessments were completed for 31 VAMCs 

• The steady-state space model (SpaceDriver) was updated using the latest 

workloads for all VAMCs. 

National Cemetery Administration

• Completed Phase I of NCA facility condition assessments (FCA). 

• Reviewed, updated and corrected the status of all NCA assets for the Capital 

Asset Inventory (CAI). 
Asset Management Plan FY 2007

 69

Veterans Benefits Administration

• Completed new certified Leadership in Energy and Environmental Design 

(LEED) regional office in Reno, NV and Ft. Harrison, MT. 

 

Current and Future Goals/Milestones 

To maintain the momentum and build on the recent accomplishments, VA has plans 

in place for continuing improvements toward maintaining the right number of assets 

at the right costs. Planned action over the next two years includes:

FY 2007

• Continue with planning and construction of the VA capital initiatives 

contained in VA’s 5-year Capital Plan; 

• Achieve significant reduction in underutilized and vacant space for the 

Department through implementation of the disposal plans; 

• Execute identified actions including enhanced-use leasing, disposal, etc. 

(second quarter); 

• Complete OAEM Phase 3 Reuse reports and CARES Stage 2 studies (first 

quarter); 

• Initiate procurement actions to solicit interest in the reuse/development 

parcels of each site (first and second quarter); 

• Refine asset condition information to reconcile FCA and financial statement 

deferred maintenance costs and take into account all of our disposals and 

investments in the pipeline, to address the backlog estimate; 

• Participate in interagency and intra-agency workgroups and related subgroups on energy issues; 

• Draft a Green Buildings Action Plan to implement the Sustainability MOU, and 

establish a Green Buildings Council to coordinate accomplishment of the 

Action Plan and related activities. 

• Pursue implementation of on-site renewable technologies at selected highpotential facilities through site visits and feasibility studies; 

• Implement CAMS enhancements, which include data store/data warehousing 

and Business Intelligence capabilities; 

• Provide periodic CAMS training; 

• Develop annual call for FRPC inventory and performance measure updates; 

• Implement Federal Asset Sales reporting strategy for VA real property; 

• Develop a Sales Report (XML file) from VBA’s Centralized Property Tracking 

System for FAS Quarterly Reporting.; and 

• Enter FAS reporting requirements into VA’s Capital Asset Inventory (CAI) 

System and GSA’s Federal Asset System as they occur. This will continue 

annual FRPC reporting and implement quarterly Federal Asset Sales reporting. 

 FAS data entry is dependent on the FAS database implementation schedule. 
Asset Management Plan FY 2007

 70

Sustainability Principles for Design of New and Renovated VA Facilities

• Draft VA plan to implement MOU described in Executive Order 13423. The 

plan provides budget guidance, directs the use of sustainable design 

principles, outlines time lines for achieving MOU goals, and identifies 

responsibilities for VA offices. It also establishes the FY 2009 as the base year 

for inclusion of funding for implementation of the MOU goals in the Major 

Construction Program. 

• Establishment of a VA Advisory Council on Sustainable/Green Buildings. The 

Advisory Council comprises members from each of the VA Administrations 

and key staff offices to provide advice, coordination, and recommendations 

related to the implementation of the sustainability construction projects for 

VA. Advisory Council members reflect expertise in the areas relating to the 

five Guiding Principles of the MOU. The Council will operate at and maintain 

a Department-level focus. 

• Complete development of VA Sustainability Design Manual. This manual will 

include energy studies and cost analysis to determine the cost ranges for full 

implementation of the MOU. Energy studies will also determine the 

percentage energy usage reductions that are life cycle cost effective for VA 

medical facilities. 

• A/E consultants for major projects are selected considering their experience 

with the principles of energy conservation and sustainability 

Veterans Health Administration

• Facility Condition Assessments will be completed for 62 VAMCs 

National Cemetery Administration

• NCA is implementing a Facility Condition Assessment (FCA) program 

modeled on the VHA system. 

o It is expected the FCA will be completed annually by every cemetery 

director for each of the cemeteries under his/her management. 

o Assessments will be reviewed by the MSN engineers to ensure accuracy 

and standardization. 

o NCA will use the completed FCAs as part of the minor construction 

prioritization process to ensure projects with the greatest need are 

funded. 

• In addition, NCA will utilize the FCA in the Organizational Assessment and 

Improvement (OAI) Program. 

o The OAI is an internal process of annual self assessment against national 

operational standards that is validated during periodic visits by 

independent teams of trained NCA employees. 
Asset Management Plan FY 2007

 71

o The FCA will provide a scorecard for cemetery facilities that meets the 

requirements the OAI Program and the National Shrine Scorecard. 

o OAI team visits to select cemeteries every year will validate the FCA as 

part of the OAI program.

Veterans Benefits Administration

• Facility Condition Assessments are in the final phases of completion for four 

regional offices (Jackson, MS; Little Rock, AR; Houston, TX; and St. 

Petersburg, FL); 

• Recommendations will be analyzed to ensure projects will receive the proper 

attention. 

FY 2008

• Continue CARES implementation; 

• Align capital investments to FRPC Tier 1 measures; 

• Work towards improved collaboration and partnership with the Department of 

Defense regarding capital projects; 

• Expand facility and asset benchmarking to ensure costs align with market 

rates; 

• Issue VA Physical Security Standards to include a Physical Security Design 

Manual addressing new and existing, mission-critical and life safety protected 

VA facilities; 

• Implement a VA process and strategy for Department review of progress in 

addressing physical security vulnerabilities in facilities that have had a 

physical security assessment completed;

• Complete energy assessments of approximately. 60 facilities in six VISNs; 

• Award contracts for energy assessments in an additional three VISNs 

(approximately 30 facilities); 

• Award contracts for implementation of energy and water conservation 

measures in seven VISNs; 

• Hire 60 new energy managers to serve VA facilities; 

• Implement renewable projects at pilot sites; 

• Complete feasibility assessments of renewable energy projects at an additional 

30 sites; 

• Implement sub-metering for VA sites based upon results of pilot; and 

• Continue annual FAS reporting. 

Veterans Health Administration

• Facility Condition Assessments will be completed for 55 VAMCs 

National Cemetery Administration

• Implement FCA across NCA. 

• Incorporate FCA into: 
Asset Management Plan FY 2007

 72

o Organizational Assessment & Improvement (OAI) Program 

o Minor Construction Prioritization Process (MCPP) 

Veterans Benefits Administration

• New Boise, ID regional office is planned as an additional/alternate LEED 

certification. 

Future Federal Real Property Asset Management Goals

To support the implementation of Executive Order 13327 and the Real Property Asset 

Management Initiative, the Federal real property community has undertaken a series 

of improvement efforts intended to strengthen key areas of asset management to help 

ensure success. VA already complies with some of the priority actions and is in the 

early stages of developing a plan to comply with the rest of the initiatives. 

Government-wide reform activity initiatives are listed below. 

Decision Analytics

Strategic Goal: 

• Utilize available and reliable inventory and performance data to improve 

decision-making. 

Interim Objectives: 

• Review available inventory and performance data to determine the business 

questions that can be answered and which may be beneficial to agency 

management in decision-making. 

Priority Actions: 

• Identify the most eligible properties for sale in accordance with Section 408 of 

the DC Lands Act. 

• Increase sharing of information among agencies on unneeded assets. 

• Ensure use of asset specific performance data in their decision-making process. 

• Incorporate the Performance Assessment Tool (PAT) or the approved 

equivalent as one part of the process for portfolio management decisionmaking. 

• Prioritize condition improvement investment actions based upon FRPP and 

agency specific data. 

Legislative Agenda

Strategic Goal: 

• Enact legislative remedies or other reforms to encourage business – like 

decisions throughout the life-cycle of real property assets as well as methods 

for streamlining the asset disposition process. 
Asset Management Plan FY 2007

 73

Interim Objectives: 

• Obtain legislative authority to reform asset management and disposition, 

including the retention of sales proceeds. 

Priority Actions: 

• Enact the President’s legislative proposal to allow Executive agencies to retain 

a portion of the net proceeds of sale which would be directed toward the 

agency’s real property capital asset needs. 

• Capture disposal results of agency specific disposal authorities already in 

place. 

• Develop processes for identifying those unneeded assets suitable for 

disposition through an enacted President’s disposal pilot. 

• Analyze real property budget scoring issues. 

• Identify potential remedies to streamline both the Federal transfer process and 

the application of the McKinney-Vento Act and National Environmental Policy 

Act. 

Inter- and Intra- Agency Coordination

Strategic Goal: 

• Improve coordination of crosscutting real property activities within and 

among Federal agencies. 

Interim Objectives: 

• Increase coordination of Federal Councils and Committees with real property 

related responsibilities including, Interagency Security Council, Advisory 

Council on Historic Preservation, and the National Capital Planning 

Commission. 

• Identify and share, as appropriate, FRPC government-wide asset management 

activities with other governmental bodies that may leverage the guidance or 

activities. 

Priority Actions: 

• Increase sharing of information among Executive agencies on unneeded assets 

as required under Section 408 of the DC Lands Act. 

• Identify other real property related requirements, (e.g. historic preservation, 

sustainable design) and review for opportunities to increase coordination. 

• Assist the Interagency Security Council in their efforts to establish risk 

management policies and other measures. 

• Encourage other government organizations to leverage FRPC definitions and 

reporting schema to meet other government-wide real property related needs. 
Asset Management Plan FY 2007

 74

• Formulate economic development case studies showing the benefits that third 

party stakeholders can receive through the disposal of unneeded and 

underutilized real property. 

• Review FRPC approved guidance to determine what information can be 

shared with a wider audience (e.g. public). 
Asset Management Plan FY 2007

 75

CHAPTER 8: CONCLUSION 

The AMP documents the Department’s philosophy for managing its capital assets, 

showing the process VA follows, from acquisition/justification, funding, 

maintenance, and disposal. The AMP provides guidance for all administrations 

across the Department to ensure capital investments are based on sound business 

practices to provide quality and cost-effective services to veterans. As a result, VA is 

able to: 1) provide a standard process for capital planning and needs assessments; 2) 

apply sound business practices to analyze capital acquisitions; 3) analyze the process 

and performance of its capital assets; and 4) evaluate the effectiveness of VA’s 

policies, principles, and standards for capital asset management. 

VA adheres to FRPC guidelines, OMB Circulars, and Presidential Management 

Initiatives in implementing its capital asset management program. The concepts and 

requirements of these guidelines are incorporated to provide a consistent approach to 

asset management across VA. 

VA uses a life-cycle approach to manage its capital assets. Capital assets start in the 

formulation stage, where a concept definition and business case is developed to 

justify the capital asset. The formulation stage also includes business case approval 

and budget appropriation. For VHA, capital assets are part of the CARES process, 

which is VA’s plan for aligning health care needs to areas experiencing greatest 

demand in services, improving the condition of facilities providing care, and reducing 

the quantity of underutilized and/or costly infrastructure. Next is the execution 

stage, where capital assets are monitored through the construction process according 

to time and cost schedules. After a project is completed and the asset becomes 

operational, it enters the steady state stage. Operational assets are no longer tracked 

separately, but monitored for performance within the context of the facility or station. 

Steady state assets are monitored and reported for decision making based on cost, 

utilization, condition, and energy performance. Assets determined to be no longer 

needed enter the final stage of an asset’s life cycle – the disposal stage. This is when 

VA considers removing the asset from its portfolio if the asset is determined to be 

underutilized, in too poor of condition, and/or too costly to maintain. 

VA has different funding mechanisms to fund its capital asset requirements, such as 

Major Construction, Minor Construction, Non-Recurring Maintenance funds, and the 

Sustainment Model. Each of these funding tools provides unique means to address 

both future capital asset requirements, as well as maintain assets in their existing 

condition to prevent further deterioration. 

VA has many tools for managing its significant portfolio of assets. VA’s Capital Asset 

Management System is the Department’s recognized system for monitoring and 

reporting on asset performance. The Department has multiple human capital 

strategies for ensuring VA personnel are effectively prepared for capital asset 
Asset Management Plan FY 2007

 76

management responsibilities. VA is establishing a variety of strategies and programs 

to significantly improve energy, environmental and transportation fleet management. 

Using its unique authority, VA employs a number of approaches to dispose of assets 

to benefit veterans. VA can create an enhanced-use lease or other agreement that 

maximizes the value of an excess asset The Department also could elect to sell an 

asset and retain any proceeds for improved veteran services. VA reports asset 

disposals in keeping with FRPC requirements and the recent Federal Asset Sales 

Initiative. 

In summary, VA has made many advances in its capital asset programs. VA has 

incorporated a disciplined, tiered approach to strategically aligning assets to the 

needs of veterans based on sound business principles and cost effectiveness. VA 

continues to seek out best practices in capital asset management to improve the 

quality of services to veterans in a cost effective manner. 
Asset Management Plan FY 2007

 77

APPENDIX A – CAPITAL DECISION CRITERIA

Departmental Alignment 

This criterion is comprised of priorities from the President’s Management Agenda 

and Secretary’s goals for improved management and performance across the 

Department (e.g., DOD collaboration, strategic realignment and intra-agency 

projects). 

Service Delivery Enhancements

This criterion addresses how the capital investment meets CARES market plan 

implementation. It focuses requirements on improving customer service, access to 

quality health care, and identifying opportunities for maximizing the volume of 

veterans served to effectively reduce gaps in projected workloads. 

Financial Priorities 

This criterion addresses the specific financial metrics, benefits and risks of the 

selected acquisition when compared to other explored alternatives (e.g., comparing 

the life cycle costs and net present value of leasing versus building). 

Capital Portfolio Goals

This criterion addresses how the capital investment meets VA’s capital portfolio 

goals such as increasing intra- and interagency and community-based sharing and 

decreasing underutilized assets and operating costs while enhancing revenue 

opportunities. 

Safeguard Assets

This criterion addresses how well the capital investment results in a decrease in 

designated high-risk assets or increases the Department’s compliance with safety, 

security, accessibility, and/or accreditation laws and regulations including seismic, 

life safety, and homeland security projects. 

 

Customer Service

This criterion addresses the extent to which VA is providing quality customer 

service, which can be measured by evaluating the following criteria: Increase in New 

or Existing Customers, Customer Satisfaction, and Customer Access. 

Special Emphasis

This criterion gives preference to those capital investments that substantially support 

special emphasis programs and services including: spinal cord injury and disorders; 

blindness; traumatic brain injury; serious mental illness; prosthetics/amputation; and 

post-traumatic stress disorder. 
Asset Management Plan FY 2007

APPENDIX 

B

–

CAPITAL INVESTMENT 

DECISION 

MODELS

Figure 1: FY 2007 Non-CARES Capital Investment Decision Criteria – Acquisition Model with Priority Weights 

Non-CARES

Project

with the

Highest Score

Goal Criteria 

* Safeguard Assets is one of the 7 approved portfoliogoals but is scored as a separate criteria in this model.

Presidential/

Secretarial Priorities

S

VHA/V

Incre

Increase 

Increa

Customer Service

Safeguard Assets*

Capital Asset

Priorities/Portfolio

Goals

Decrea

Decre

I

Red

Increas

Maximi

Financial Priorities

Cost

A

Savin

.346.168

.067

.059.360

78 
Asset Management Plan FY 2007

Figure 2: FY 2007 CARES Capital Investment Decision Criteria – Acquisition Model with Priority Weights

CARES Project

with the

Highest Score

Goal Criteria Sub-criter

Realignment/Mission Change

Service Delivery

Enhancements

Quality - Infrastructure Enhancements

Access to Health Care

Safeguard Assets

Security/Infrastructure Security

Seismic

Special Emphasis

Yes

No

Capital Asset

Priorities/Portfolio

Goals

Decrease Underutilized Capacity

Decrease Operational Costs

Increase in Sharing

Reduce Energy Utilization

Increase Revenue Opportunities

Maximize Highest and Best Use

Departmental

Alignment

DoD Collaboration

Strategic Alignment

Financial Priorities

Cost-effectiveness Analysis

Exit Strategy

Alternatives Analysis

Risk Analysis

Risk Control Plan

VBA/NCA Opportunities

Safety

.388.226.220.092.039.035

Volume of Veterans Served/Services Provided

Size of Gap/Demand 

79 
Asset Management Plan FY 2007

80 

Figure 3: FY 2007 VHA Decision Criteria – Minor Projects Model with Priority Weights

CARES Project

with the

Highest Score

Goal Criteria Sub-criter

Realignment/Mission Change

Service Delivery

Enhancements

Quality - Infrastructure Enhancements

Access to Health Care

Safeguard Assets

Security/Infrastructure Security

Seismic

Special Emphasis

Yes

No

Capital Asset

Priorities/Portfolio

Goals

Decrease Underutilized Capacity

Decrease Operational Costs

Increase in Sharing

Reduce Energy Utilization

Increase Revenue Opportunities

Maximize Highest and Best Use

Departmental

Alignment

DoD Collaboration

Strategic Alignment

Financial Priorities

Cost-effectiveness Analysis

Exit Strategy

Alternatives Analysis

Risk Analysis

Risk Control Plan

VBA/NCA Opportunities

Safety

.388.226.220.092.039.035

Size of Gap/Demand 

Volume of Veterans Served/Services Provided 
Asset Management Plan FY 2007

 

APPENDIX C – ACTUAL AND PLANNED DISPOSALS

FY 2005 and FY 2006 Disposal Report 

Program VISN Building/

Land Station Name Disposal Modality 

Disposal 

Complete 

Date 

FY 2005 

NCA 1 2 Total Calverton, NY Demolition 06/27/2005

NCA 1 2 Total Long Island, NY Demolition 06/27/2005

NCA 1 2 Total Loudon Park, MD Demolition 06/27/2005

NCA 1 3301 City Point, VA Demolition 06/27/2005

NCA 1 3001 Alexandria, VA Demolition 06/27/2005

NCA 1 2 Total Ft. Harrison, VA Demolition 06/27/2005

VHA 1 13 VACHS, West Haven Demolition 06/01/2005

VHA 1 5 Total White River Junction Demolition 12/01/2004

VHA 5 10H Perry Point Demolition 12/06/2004

VHA 8 7 Total Tampa Demolition 06/01/2005

VHA 9 10 acres Murfreesboro Transfer - State 

Home 09/27/2005

VHA 9 T2 Louisville GSA Disposal 11/20/2004

VHA 15 38 Total Leavenworth EUL 08/05/2005

VHA 12 158 Hines Outlease 07/01/2005

VHA 15 24 Kansas City Demolition 09/15/2005

VHA 15 2 Total Marion, IL GSA Disposal 08/26/2005

VHA 16 T2 Jackson Demolition 03/01/2005

VHA 17 4 Total Temple Demolition 10/01/2004

VHA 20 3 Total Vancouver Demolition 02/28/2005

VHA 21 2 Total Fresno Demolition 09/05/2005

VHA 21 C Reno Donated 07/15/2005

FY 2006 

VHA 1 TR4 Providence Demolition 05/30/2006

VHA 4 9 Total Pittsburgh, Aspinwall Demolition 05/30/2006

VHA 5 45 Total Fort Howard CBOC EU 09/29/2006

VHA 7 133 Tuscaloosa Demolition 10/18/2005

VHA 10 8 Chillicothe EU 05/01/2006

VHA 10 TE Cincinnati Demolition 01/01/2006

VHA 11 2 Total Saginaw Demolition 08/05/2006

VHA 12 7 Chicago, Jesse Brown Demolition 12/31/2005

VHA 12 4 Total Chicago, Lakeside Sale 10/01/2005

VHA 15 2 Total Marion, IL GSA Disposal 05/20/2006

VHA 19 6 Total Salt Lake City EU 09/22/2006

VHA 20 2 Total White City Demolition 09/12/2006

VHA 20 T2239 Vancouver Demolition 01/15/2006

VHA 21 UST1 Fresno Demolition 01/11/2006

81
Asset Management Plan FY 2007

 

 Summary of FY 2007 Planned Disposals 

Program VISN Building/

Land Station Name Total GSF 

Disposal 

Modality 

VHA 1 TR6 Providence 720 Demolition 

VHA 2 2 Total Canandaigua 3,200 Demolition 

VHA 2 2 Total Albany 4,120 EU 

VHA 4 2 Total Butler 9,808 Demolition 

VHA 6 13 Beckley 1,200 Demolition 

VHA 10 Stadium Chillicothe EU 

VHA 10 36 Total Cleveland, Brecksville 796,439 EU 

VHA 10 3 Total Dayton 33,945 Other 

Agreement 

VHA 10 2 Total Dayton 66,901 EU 

VHA 10 6 Total Dayton 31,025 Other VA Reuse

VHA 10 6 acres Dayton EU 

VHA 11 145 Battle Creek 53,361 EU 

VHA 11 3 Total NIHCS, Marion 61,109 EU 

VHA 15 2 acres St Louis, John Cochran Division EU 

VHA 15 T 111 Marion, IL 720 GSA Disposal 

VHA 16 28 Total Gulfport, MS 501,843 Other 

Agreement 

VHA 16 4 Total Houston 9,700 EU 

VHA 17 9 Total Temple (Marlin) 207,848 GSA Disposal 

VHA 18 T34 Amarillo 2,841 Demolition 

VHA 18 52 Tucson 2,520 Demolition 

VHA 20 19 Total Vancouver 109,519 Demolition 

VHA 20 T-12 Roseburg 2,112 Demolition 

VHA 21 324 Menlo Park 80,300 Demolition 

VHA 21 H Reno 9,425 Demolition 

VHA 22 2 Total Sepulveda 137,022 EU 

VHA 22 2 Sepulveda 131,313 Demolition 

Summary of FY 2008 Planned Disposals

Program VISN Building/

Land Station Name Total GSF 

Disposal 

Modality 

VHA 2 3 Batavia 17,520 EU 

VHA 4 4 Total Butler 14,594 Demolition 

VHA 4 2 Total Pittsburgh, Aspinwall 50,610 Demolition 

VHA 6 3 Total Hampton 81,842 Transfer - State 

Home 

VHA 10 42 Chillicothe 800 Demolition 

VHA 10 18 Total Cincinnati, Fort Thomas 80,839 Transfer - CAF 

VHA 10 11 acres Cincinnati, Fort Thomas Transfer - CAF 

VHA 12 6 Total Milwaukee 337,227 EU 

VHA 12 37 acres Milwaukee EU 

82
Asset Management Plan FY 2007

 

VISN Building/

Land Station Name Total GSF 

Disposal 

Modality Program

VHA 20 2 American Lake 70,000 Deconstruction 

VHA 20 T-3 Roseburg 2,077 Demolition 

VHA 20 217 White City 18,308 Deconstruction 

VHA 21 AB3 NCHCS, Martinez 4,320 Demolition 

83
Asset Management Plan FY 2007

 

APPENDIX D – ENHANCED-USE LEASE PROJECTS

Secretary’s Approved Priority Enhanced-Use Lease Projects 

Project Site Project Type Project Description Status 

Albany, NY Parking Lease to not-for-profit corporation for 

construction and maintenance of a 

parking structure. VA will receive 

parking spaces for use by the VAMC 

on a no-cost basis. 

Revising Concept 

Paper 

Albuquerque, 

NM 

Assisted 

Living 

Lease for assisted living for spinal cord 

injury patients; Affordable temporary 

lodging accommodations for out-oftown/state patients; Alzheimer's 

patients care center. 

Preparing Concept 

Paper 

Batavia, NY Transitional 

Housing 

Lease to provide a new transitional 

housing combined with substance 

abuse/mental health supportive 

services 

Reviewing 

Concept Paper 

Battle Creek, MI Laundry Lease to reduce laundry costs. Negotiations 

ongoing 

Brevard, FL Assisted 

Living 

Lease of donated land to establish an 

assisted living housing complex. 

Negotiations 

ongoing 

Butler, PA Homeless 

Residential 

Program 

Expansion of existing homeless 

residence dedicated to serving 

veterans. 

NOI sent to 

congress 

Butler, PA Hospital Demolition of old hospital and support 

buildings. Construction of new 

hospital, cancer center, and medical 

office buildings. 

Studies being 

conducted 

Chillicothe, OH Mixed Use Multipurpose community facility Public Hearing 

pending 

Cleveland, OH Domiciliary Lease to provide funding for services 

of 120-bed domiciliary including space 

for VA program support and 

community organizations. 

NOI sent to 

congress 

Columbia, SC Mixed 

Use/VARO/ 

Realignment 

Lease for a mixed use residential 

development (multi-family, and/or 

institutional office related uses; 

possible VBA Regional Office to be 

relocated from leased space to the 

VAMC campus. 

Negotiations 

ongoing 

Dayton, OH Senior Housing About 55 beds of single occupancy 

low-income housing 

Feasibility study 

ongoing 

Dayton, OH Homeless 

Residential 

Housing for substance abuse and 

mental health patients 

NOI sent to 

congress 

Dayton, OH Transitional 

Housing 

Lease to Volunteers of America (VOA) 

to establish 50-bed transitional housing 

with supportive services 

Reviewing 

Concept Paper 

84
Asset Management Plan FY 2007

 

Project Site Project Type Project Description Status 

Hines, IL Assisted 

Living #51 

Create assisted living facility in 

existing building with non-profit 

partner. 

Inactive 

Houston, TX Clinical / 

Ambulatory 

Space 

Lease to develop clinical and 

ambulatory space to meet needs of 

veterans. 

Negotiations 

ongoing 

Lebanon, PA Golf Course Lease to township to reduce VA costs 

by providing golf therapy to patients. 

Pending 

discussions 

Lincoln, NE Outpatient 

Clinic 

Outpatient clinic Public Hearing 

pending 

Los Angeles, CA VHA/VBA 

Collocation 

VBA will exit leased space to collocate 

at VHA space to better provide onestop services to veterans. 

Pending CARES 

business study 

Marion, IL Hotel Lease to increase access to on site hotel 

for veterans and families. 

Feasibility study 

ongoing 

Marion, IN Senior 

Housing 

Low income housing for senior and 

veterans 

Feasibility study 

ongoing 

Milwaukee, WI Mixed Use Proposed E-U lease for assisted living, 

retail, and entertainment development. 

Exploring options 

to proceed 

Montrose, NY Assisted 

Living 

Reduce maintenance and repair costs 

to VA while providing funding for 

community-based clinics and senior 

and assisted living housing. 

Pending CARES 

business study 

Murfreesboro, 

TN 

Golf Course Lease to the City of Murfreesboro to 

develop, operate, and maintain the 

existing golf course properly 

Public hearing 

pending 

Nashville, TN Research Lease to Vanderbilt University to 

provide research facilities to VA. 

Negotiation 

ongoing 

Newington, CT Assisted 

Living 

Lease to develop assisted living 

facility. 

Preparing RFP 

Phoenix, AZ Child Care 

Development 

Center 

Exit high cost leases to obtain on-site 

offices and child care complex for 

VAMC employees. 

Feasibility study 

ongoing 

Riverside, CA Transitional 

Housing 

Provide at least 118 beds transitional 

housing for homeless veterans. 

Preparing Concept 

Paper 

Sacramento, CA Assisted 

Living 

Lease to provide assisted living facility. Negotiation 

ongoing 

Saint Louis, MO Parking Public/private partnership to build 

nine-level parking deck. VA patients, 

visitors, employees get free parking for 

duration of lease. 

Proposals under 

review 

San Francisco, 

CA 

Research Lease to Northern California Institute 

for Research and Education (NCIRE) to 

develop a new research facility on the 

VAMC campus. 

On hold 

Sepulveda, CA Homeless 

Veterans 

Lease to New Directions, Inc. (NDI) a 

non-profit organization, of two 

NOI submitted to 

congress 

85
Asset Management Plan FY 2007

 

Project Site Project Type Project Description Status 

Housing currently unoccupied buildings for 

transitional housing and ancillary 

services. 

Solano County, 

CA 

Water 

Supply/Prope

rty 

Development 

Lease of land for irrigation and 

development in exchange for future 

cemetery expansion. 

Preparing Concept 

Paper 

St. Albans, NY Mixed Use In conjunction with the Secretary’s 

CARES decision, the potential project 

could include continuing care 

retirement community, independent 

living, assisted living, Alzheimer’s, 

skilled nursing units and others. 

CARES decision 

made. The capital 

master plan and 

EU potential are 

being identified 

Syracuse, NY Research Lease to the State University of New 

York's (SUMY) Upstate Medical 

University and College of 

Environmental Science and Forestry to 

develop a Biotechnology Research 

Center. 

On hold 

Walla Walla, 

WA 

To perform in conjunction with the 

Secretary’s CARES decision, a 

comprehensive reuse study to 

determine reuse potential in-line with 

VA’s mission of the site and move 

forward with their implementation. 

CARES decision 

made. Moving 

forward with the 

capital and EUL 

process 

White City, OR Community 

College 

VA/Community college partnership 

providing training through tuition 

vouchers for veterans and VA staff. 

CARES decision 

made. Moving 

forward with the 

capital and EUL 

process 

Coatesville, PA; 

Philadelphia, 

PA; Pittsburgh, 

PA (Aspinwall); 

Pittsburgh, PA 

(Univ Drive); 

Wilkes-Barre, 

PA 

Co-generation, 

energy savings 

Potential for reducing costs and 

generating revenue via national 

cogeneration plan 

Negotiations 

ongoing 

86
Asset Management Plan FY 2007

 

 Awarded Enhanced-Use Lease Projects 

Location Project Type Lease Awarded 

1 Washington DC Child Development Center 4/20/1993

2 Houston TX Collocation 8/23/1993

3 West Palm Beach FL Public Safety Center 11/14/1994

4 West Haven* CT Child Development Center 12/1/1994

5 Big Spring TX Parking 3/8/1996

6 Indianapolis IN Consolidation 9/23/1996

7 Bay Pines* FL Child Development Center 5/22/1997

8 St. Cloud MN Golf Course 7/28/1997

9 Atlanta GA Regional Office (RO) Collocation 12/18/1997

10 Portland OR Single Room Occupancy (SRO) 7/14/1998

11 North Little Rock AR Golf Course 10/1/1998

12 Mt. Home TN Medical School 12/17/1998

13 Sioux Falls SD Parking 4/1/1999

14 Danville IL Senior Housing 4/27/1999

15 Mt. Home TN Energy 12/2/1999

16 Indianapolis* IN Nursing Home 12/6/1999

17 Dallas TX Child Development Center 12/20/1999

18 Roseburg OR Single Room Occupancy (SRO) 8/1/2000

19 Salt Lake City UT Regional Office (RO) collocation 5/9/2001

20 Durham NC Mixed Use / Research 1/3/2002

21 North Chicago IL Medical School 4/10/2002

22 Chicago (Westside) IL Regional Office (RO) Collocation 4/22/2002

23 Chicago (Westside) IL Parking Structure 4/22/2002

24 North Chicago IL Energy Center Phase I 5/21/2002

25 Batavia* NY Single Room Occupancy (SRO) 5/24/2002

26 Chicago (Westside) IL Energy 8/12/2002

27 Tuscaloosa AL Hospice 9/19/2002

28 Barbers Point HI Single Room Occupancy (SRO) 3/17/2003

29 Milwaukee WI Regional Office (RO) Collocation 7/17/2003

30 Hines IL 

 Single Room Occupancy 

(Building 14) 8/22/2003

31 Somerville NJ Mixed Use 9/5/2003

32 North Chicago IL Energy Center Phase II 10/29/2003

33 Mound City IL Interpretive/Visitor Center 11/6/2003

34 Butler PA Mental Health Facility 12/18/2003

35 Portland OR Crisis Triage Center 2/13/2004

36 Charleston/MUSC SC Affiliate Partnering 5/18/2004

37 Hines IL 

Single Room Occupancy SRO 

Phase II 7/30/2004

38 Minneapolis MN Credit Union 8/17/2004

39 Batavia NY Assisted Living 8/24/2004

40 Bedford MA Single Room Occupancy housing 9/10/2004

43 Dayton OH Child Care Development Center 12/30/04

44 Dayton OH Housing Initiative 12/30/2004

45 Chicago (Lakeside) IL Realignment 1/18/2005

46 St. Cloud MN Homeless Housing 5/24/2005

47 Leavenworth KS Residential Health Care 8/5/2005

87
Asset Management Plan FY 2007

 

Location Project Type Lease Awarded 

48 Minneapolis MN Single Room Occupancy (SRO) 9/1/2005

49 Salt Lake City II UT 

Mixed Use – 

Office/Retail/Restaurant 9/20/2006

50 Fort Howard MD 

Mixed Use – Senior 

Housing,/Clinic 9/28/2006

88
Asset Management Plan FY 2007

 

Appendix E: CARES Major Construction Status 

June 2007

Location Project Description Total 

Est. Cost

Available 

thru FY 07

FY 08 

Request Future

Construct 

Award 

Date

Estimated 

Completion 

Date

Project Complete

North Chicago IL Surgical Suite/Emergency DoD Sharing $13,000 $13,000 $0 $0 Sep 2004 Jul 2006

Under Construction

Chicago IL Modernize Inpatient Space $98,500 $98,500 $0 $0 Sep 2004 Oct 2007

Cleveland OH Cleveland-Brecksville Consolidation $102,300 $102,300 $0 $0 Sep 2006 May 2010

Columbus OH New Outpatient Clinic $94,800 $94,800 $0 $0 Jul 2005 May 2008

Des Moines1 IA Extended Care Building $25,550 $25,550 $0 $0 Feb 2007 Mar 2008

Indianapolis IN

7th & 8th Fl. Wards Modernization 

Addition $27,400 $27,400 $0 $0 Jun 2005 Apr 2009

Las Vegas NV New Medical Center Facility $600,400 $259,000 $341,400 $0 Sep 2006 Jan 2011

Menlo Park CA

Seismic Corrections-Geropsych 

Replacement (Bldg. 324) $32,934 $32,934 $0 $0 Sep 2006 Jan 2009

Minneapolis MN SCI & SCD Center $20,500 $20,500 $0 $0 Sep 2006 Feb 2009

Pensacola FL Pensacola Outpatient Clinic $55,056 $55,056 $0 $0 Mar 2005 Sep 2007

Pittsburgh PA Consolidation of Campuses $248,000 $102,500 $40,000 $105,500 Sep 2005 TBD

San Diego CA Seismic Corrections-Bldg. 1 $47,874 $47,874 $0 $0 Sep 2005 Aug 2008

San Francisco CA Seismic Corrections-Bldg. 203 $41,168 $41,168 $0 $0 Jan 2006 Aug 2008

Tampa FL Spinal Cord Injury Center Expansion $11,407 $11,407 $0 $0 May 2006 Dec 2007

Tucson AZ Mental Health Clinic $13,300 $13,300 $0 $0 Sep 2006 Apr 2008

In Design

American Lake WA Seismic Corrections-NHCU & Dietetics $38,220 $38,220 $0 $0 Mar 2008 Dec 2009

Anchorage AK Outpt. Clinic/Regional Office $75,270 $75,270 $0 $0 Jun 2007 Jul 2009

Atlanta GA Modernize Patient Wards $20,534 $20,534 $0 $0 Nov 2007 Aug 2010

Biloxi MS

Restoration of Hospital/Consolidation of 

Gulfport $310,000 $310,000 $0 $0 Sep 2007 Jul 2012

Columbia MO Operating Room Suite Replacement $25,830 $25,830 $0 $0 Jul 2008 May 2010

Durham NC Renovate Patient Wards $9,100 $9,100 $0 $0 Jul 2007 Aug 2009

Fayetteville AR Clinical Addition $65,700 $5,800 $0 $59,900 TBD TBD

Gainesville FL Correct Pt. Privacy Deficiency $85,200 $85,200 $0 $0 Jan 2008 Jan 2010

Lee County FL Outpatient Clinic $109,400 $10,498 $9,890 $89,012 Dec 2008 Feb 2011

Long Beach CA Seismic Corrections-Bldgs 7 &126 $107,845 $107,845 $0 $0 Feb 2008 Nov 2009

Los Angeles CA Seismic Corrections-Bldgs. 500 & 501 $111,800 $7,936 $0 $103,864 TBD TBD

Milwaukee WI Spinal Cord Injury Center $32,500 $32,500 $0 $0 Jan 2008 Feb 2010

Orlando FL New Medical Center Facility $553,900 $25,000 $35,000 $493,900 TBD TBD

Palo Alto CA Seismic Corrections Bldg. 2 $34,000 $34,000 $0 $0 Dec 2007 Jan 2010

San Antonio TX Ward Upgrades and Expansion $19,100 $19,100 $0 $0 Jun 2007 Apr 2010

San Juan PR Seismic Corrections-Bldg. 1 $178,100 $10,880 $0 $167,220 TBD TBD

St. Louis (JB) MO

Medical Facility Improvements and 

Cemetery Expansion $99,000 $7,000 $0 $92,000 TBD TBD

Syracuse2 NY Spinal Cord Injury Center $77,700 $53,469 $23,800 $0 Oct 2007 Jun 2010

Tampa FL

Upgrade Essential Electrical Distribution 

Systems $49,000 $49,000 $0 $0 Aug 2007 Jan 2010

Site Acquisition

Denver CO New Medical Center Facility $646,000 $107,000 $61,300 $477,700 TBD TBD

On Hold

Temple3 TX MRI & Supporting Facility $10,552 $55,552 -$45,000 $0 TBD TBD

Hurricane Katrina Projects

Gulfport LA Environmental Cleanup $35,919 $35,919 $0 $0 Feb 2007 Apr 2008

New Orleans LA

Restoration/Replacement of Medical 

Center Facility $625,000 $625,000 $0 $0 TBD TBD

Total $4,751,859 $2,695,942 $466,390 $1,589,096

1

 This project received $750 thousand in a reprogramming action in FY 2007. 2

 This project is overstated by a recission amount. The total estimated cost is $77.269 million with the recission.

3

 $56 million was appropriated in FY 2005 for the Temple project. A recent CARES decision about the future of the Waco, TX facility has 

diminished the need for major construction activities at Temple. A reprogramming of $45 million is requested for FY 2008. The remaining 

$10.552 million will be used to construct an MRI and support facilities at Temple.

89
Asset Management Plan FY 2007

 

APPENDIX F - REFERENCES

VA Web Sites 

• VA Capital Investment Process http://vaww.va.gov/oaem or 

http://www.va.gov/oaem/

• VA Information Resources Management http://www.va.gov/oirm

• VA Construction & Facilities Management http://www.va.gov/facmgt/ 

VA Documents 

• VA’s 5-Year Capital Plan http://vaww.va.gov/oaem or call Office of 

Asset Enterprise Management at (202) 273-9702 

• VA Capital Investment Methodology Guide http://vaww.va.gov/oaem

or call Office of Asset Enterprise Management at (202) 273-9702 

• Department of Veterans Affairs Strategic Plan FY 2006-20011 

http://www1.va.gov/op3/docs/VAComplete.pdf or call Strategic 

Planning Service at (202) 273-8766 or (202) 273-5068 

• Department of Veterans Affairs FY 2008 Congressional Budget 

Submission, Volume 5 

http://www.va.gov/budget/summary/index.htm 

• Department of Veterans Affairs FY 2006 Performance and Accountability 

Report, http://www.va.gov/budget/report/index.htm 

• The source for demolition cost factors, developed by VA’s Office of 

Facilities Management: http://www.va.gov/facmgt/costestimating/vamcpricing.asp

Information Technology 

• VA IT - Investment Management Guide 

http://www.va.gov/oirm/ITplanning/IT_Capital_Investment_Guide.as

p 

90
Asset Management Plan FY 2007

 

91

NCA 

• National Cemetery Strategic Plan, Planning Division (402A2) 

Call (202) 273-5167

VBA 

• Surveys and Research Staff of the Data Management Office for VBA 

Intranet -- http://vbaw.vba.va.gov/bl/20/cfo/surv/srsindex.html or 

Internet –http://www.vba.va.gov/surveys

VHA 

• CARES Portal VISN Support Service Center (VSSC) 

http://vssc.med.va.gov/

• CARES Studies Website 

• http://www.va.gov/cares/default.asp