Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Vet-
erans Health Care and Procurement Improvement Act of
2002’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. References to title 38, United States Code.
Sec. 3. Limitation on use of local contracts for Department of Veterans Affairs
procurement of health-care items.
Sec. 4. Enhancements to enhanced-use lease authority.
Sec. 5. Eligibility for Department of Veterans Affairs health care of certain addi-
tional Filipino World War II veterans residing in the United
States.
Sec. 6. Outpatient dental care for all former prisoners of war.
Sec. 7. Improved accountability of research corporations established at Depart-
ment of Veterans Affairs medical centers.
Sec. 8. Department of Defense participation in Revolving Supply Fund pur-
chases.
Sec. 9. Name of Department of Veterans Affairs outpatient clinic, New London,
Connecticut.
SEC. 2. REFERENCES TO TITLE 38, UNITED STATES CODE.
Except as otherwise expressly provided, whenever in
this Act an amendment or repeal is expressed in terms of
an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or
other provision of title 38, United States Code.
SEC. 3. LIMITATION ON USE OF LOCAL CONTRACTS FOR DE-
PARTMENT OF VETERANS AFFAIRS PROCURE-
MENT OF HEALTH-CARE ITEMS.
(a) IN GENERAL.—Section 8125 is amended to read
as follows:
‘‘§ 8125. Procurement of health-care items
‘‘(a) Except as provided in subsection (b), any pro-
curement of a health-care item by the Department shall be
made through the use of a Federal Supply Schedule con-
tract, or a national contract, that meets the requirements
of subsection (d).
‘‘(b)(1) Subsection (a) does not apply to a procurement
of a health-care item in any of the following cases:
‘‘(A) A procurement that is necessary to meet a
current or near-term medical emergency at a medical
center.
‘‘(B) A procurement that is for a health-care
item that is not listed in the Federal Supply Schedule
or as part of a national contract and for which there
is a valid clinical need.
‘‘(C) A procurement that is for a specialized
health-care item not listed in the Federal Supply
Schedule or as part of a national contract and that
is to meet the special needs of an individual patient
who has one of the special needs identified in section
1706(b) of this title and who has a valid clinical need
for the item.
‘‘(D) A procurement that is part of an approved
sharing agreement between the Department of Defense
and the Department of Veterans Affairs with demon-
strable cost-per-item savings for a health-care item
listed on the Federal Supply Schedule or a national
contract.
‘‘(E) A procurement that supports a prime con-
tract or a subcontract with a small business concern
qualifying for a procurement preference program
under section 8 or 15 of the Small Business Act (15
U.S.C. 637, 644), if the cost of the item to be procured
is no more than the cost (taking price and value into
consideration) of the comparable item on the Federal
Supply Schedule or national contract and if the item
meets the requirements of subsections (d)(1)(A) and
(d)(2).
‘‘(2) A procurement may be made as authorized under
subparagraph (B) of paragraph (1) only if the procurement
is specifically authorized in advance in writing by the Sec-
retary. The authority of the Secretary under the preceding
sentence may only be delegated to the Deputy Secretary or
to an official of the Veterans Health Administration not
below the level of a Deputy Under Secretary (or equivalent)
acting jointly with a procurement executive of the Depart-
ment not below the level of an Associate Deputy Assistant
Secretary.
‘‘(c) In the case of an emergency procurement of a
health-care item as authorized by subsection (b)(1)(A), the
quantity of the item procured may not exceed the quantity
of that item that is the reasonably foreseeable need for the
item at the medical center concerned until resupply can be
achieved through procurement actions other than emergency
procurement.
‘‘(d) A contract meets the requirements of this sub-
section if—
‘‘(1) the contract includes—
‘‘(A) provisions referred to as ‘preaward
and postaward audit clauses’; and
‘‘(B) a provision referred to as a ‘price re-
duction clause’; and
‘‘(2) in the case of a contract to be made with
a vendor that is a distributor, the contract will be for
distribution services only unless the manufacturer of
the product can clearly demonstrate that at least 60
percent of its sales of the item through that vendor is
to commercial customers with negotiated product
prices and that the vendor actually stocks and distrib-
utes the product.
‘‘(e)(1) The Secretary shall establish procedures to as-
sure compliance by each Department medical facility with
the provisions of this section and with applicable Federal
and Department procurement regulations.
‘‘(2) The procedures established by the Secretary under
paragraph (1) shall be designed to maximize health-care
item variety and the use of the Federal Supply Schedule.
‘‘(3) The Secretary shall establish and enforce proce-
dures limiting the standardization of items at the local, re-
gional, or national level to provide special patient popu-
lations (as identified in section 1706(b) of this title) with
the range and types of health-care items required to meet
their clinical and quality-of-life needs.
‘‘(4) The Advisory Committee on Prosthetics and Spe-
cial-Disabilities Programs established under section 543 of
this title shall review the procedures established under para-
graph (3), including the implementation of those proce-
dures, and shall advise the Secretary when those procedures
are not effectively enforced by the Department.
‘‘(f)(1) The Secretary shall establish annual goals for
Department medical centers for the purchase of health-care
items from Federal Supply Schedule and national contracts
meeting the requirements of subsection (d). Such goals shall
be designed to maximize the percentage of such purchases
that are made through such contracts.
‘‘(2) The Secretary shall establish goals for the Depart-
ment for procurements from small business concerns quali-
fying for a procurement preference program under section
8 or 15 of the Small Business Act (15 U.S.C. 637, 644).
Such goals shall be no less than the national goal for each
such procurement preference program under either of those
sections.
‘‘(3) Achievement of the goals established under this
subsection shall be an element in the performance standards
for employees of the Department who have the authority
and responsibility for achieving those goals.
‘‘(g) A provision of law that is inconsistent with any
provision of this section shall not apply, to the extent of
the inconsistency, to the procurement of a health-care item
for the Department.
‘‘(h)(1) Not later than December 31 each year, the Sec-
retary shall submit to the Committees on Veterans’ Affairs
of the Senate and House of Representatives a report on the
procurement of health-care items during the preceding fiscal
year. Each such report shall include, for the year covered
by the report, the following:
‘‘(A) The total dollar amount of all items listed
in Federal Supply Classification (FSC) Group 65 or
66 and the total dollar value of the exceptions to sub-
section (a) under each of subparagraphs (A), (B), (C),
(D), and (E) of subsection (b)(1), shown by medical
facility.
‘‘(B) A detailed explanation for exceptions to
subsection (a), including—
‘‘(i) the rationale for use of emergency pro-
curement at Department medical facilities;
‘‘(ii) the rationale for approval of requests
under subsection (b)(1)(B) for procurement of
items not listed on the Federal Supply Schedule
or on national contracts; and
‘‘(iii) exceptions granted for special health-
care needs of veterans with disabilities described
in section 1706(b) of this title.
‘‘(C) Analysis of sharing agreements between the
Department and the Department of Defense to indi-
cate the basic written sharing initiative and the divi-
sion of financial responsibility between the two De-
partments.
‘‘(D) The stated goal under each procurement
preference program, together with an assessment of
the performance of the Department toward achieve-
ment of that goal, especially with respect to the goal
for contracting with businesses that are owned by vet-
erans with service-connected disabilities.
‘‘(2) The Advisory Committee on Prosthetics and Spe-
cial-Disabilities Programs of the Department shall submit
comments on each report under paragraph (1) before the
report is submitted under that paragraph, and the Sec-
retary shall include those comments in the report as sub-
mitted.
‘‘(i) For the purposes of this subsection:
‘‘(1) The term ‘health-care item’ includes any
item listed in, or (as determined by the Secretary) of
the same nature as an item listed in, Federal Supply
Classification (FSC) Group 65 or 66.
‘‘(2) The term ‘national contract’ means a con-
tract for procurement of an item that is entered into
by the National Acquisition Center of the Department
or another Department procurement activity, as au-
thorized by the Secretary, that is available for use by
all Department medical facilities.
‘‘(3) The term ‘valid clinical need’ means in the
professional judgment of an appropriate clinician.
Such term applies to health care items, prosthetic ap-
pliances, sensory or mobility aids and supplies that
are prescribed by a physician for special patient pop-
ulations such as veterans with spinal cord dysfunc-
tion, blindness, amputations, and other veterans in-
cluded in section 1706(b) of this title.
‘‘(4) The term ‘Federal Supply Schedule con-
tract’ means a contract that is awarded and adminis-
tered by the National Acquisition Center of the De-
partment under a delegation of authority from the
Administrator of the General Services Administra-
tion.
‘‘(5) The term ‘emergency procurement’ means a
procurement necessary to meet an emergency need af-
fecting the health or safety of a person being furnished
health-care services by the Department.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on September 30, 2003, and shall
apply to procurements by the Secretary of Veterans Affairs
after that date.
SEC. 4. ENHANCEMENTS TO ENHANCED-USE LEASE AU-
THORITY.
(a) INCREASED FLEXIBILITY UNDER ENHANCED-USE
LEASES.—Section 8162(a)(2)(B) is amended—
(1) by striking ‘‘proposed by the Under Secretary
for Health’’ and inserting ‘‘proposed by one of the
Under Secretaries’’; and
(2) by striking ‘‘to the provision of medical care
and services’’ and inserting ‘‘to the programs and ac-
tivities of the Department’’.
(b) NOTIFICATION OF PROPERTY TO BE LEASED.—
Section 8163 is amended—
(1) in the first sentence of subsection (a)—
(A) by striking ‘‘designate a property to be
leased under an enhanced-use lease’’ and insert-
ing ‘‘enter into an enhanced-use lease with re-
spect to certain property’’; and
(B) by striking ‘‘before making the designa-
tion’’ and inserting ‘‘before entering into the
lease’’;
(2) in subsection (b), by striking ‘‘of the proposed
designation’’ and inserting ‘‘to the congressional vet-
erans’ affairs committees and to the public of the pro-
posed lease’’; and
(3) in subsection (c)—
(A) in paragraph (1)—
(i) by striking ‘‘designate the property
involved’’ and inserting ‘‘enter into an en-
hanced-use lease of the property involved’’;
and
(ii) by striking ‘‘to so designate the
property’’ and inserting ‘‘to enter into such
lease’’;
(B) in paragraph (2), by striking ‘‘90–day
period’’ and inserting ‘‘45–day period’’;
(C) in paragraph (3)—
(i) by striking ‘‘general description’’ in
subparagraph (D) and inserting ‘‘descrip-
tion of the provisions’’; and
(ii) by adding at the end the following
new subparagraph:
‘‘(G) A summary of a cost-benefit analysis of the
proposed lease.’’; and
(D) by striking paragraph (4).
(c) DISPOSITION
OF LEASED PROPERTY.—Section
8164 is amended—
(1) in subsection (a)—
(A) by striking ‘‘by requesting the Adminis-
trator of General Services to dispose of the prop-
erty pursuant to subsection (b)’’ in the first sen-
tence; and
(B) by striking the third sentence;
(2) in subsection (b)—
(A) by striking ‘‘Secretary and the Admin-
istrator of General Services jointly determine’’
and inserting ‘‘Secretary determines’’; and
(B) by striking ‘‘Secretary and the Admin-
istrator consider’’ and inserting ‘‘Secretary con-
siders’’; and
(3) in subsection (c), by striking ‘‘90 days’’ and
inserting ‘‘45 days’’.
(d) USE OF PROCEEDS.—Section 8165 is amended—
(1) in subsection (a)—
(A) by striking ‘‘(1)’’ after ‘‘(a)’’;
(B) by inserting after ‘‘of this title’’ the fol-
lowing: ‘‘, except that any funds received by the
Department under an enhanced-use lease in sup-
port of the Veterans Benefits Administration or
the National Cemetery Administration and re-
maining after any deduction from such funds
under subsection (b) shall be credited to applica-
ble appropriations of that Administration’’; and
(C) by striking paragraph (2);
(2) in subsection (b), by adding at the end the
following new sentence: ‘‘The Secretary may use the
proceeds from any enhanced-use lease to reimburse
applicable appropriations of the Department for any
expenses incurred in the development of additional
enhanced-use leases.’’; and
(3) by striking subsection (c).
(e) CLERICAL AMENDMENTS.—(1) The heading of sec-
tion 8163 is amended to read as follows:
‘‘§ 8163. Hearing and notice requirements regarding
proposed leases’’.
(2) The item relating to section 8163 in the table of
sections at the beginning of chapter 81 is amended to read
as follows:
‘‘8163. Hearing and notice requirements regarding proposed leases.’’.
SEC. 5. ELIGIBILITY FOR DEPARTMENT OF VETERANS AF-
FAIRS HEALTH CARE OF CERTAIN ADDI-
TIONAL FILIPINO WORLD WAR II VETERANS
RESIDING IN THE UNITED STATES.
(a) ELIGIBILITY FOR HEALTH CARE.—The text of sec-
tion 1734 is amended to read as follows:
‘‘(a) The Secretary shall furnish hospital and nursing
home care and medical services to any individual described
in subsection (b) in the same manner, and subject to the
same terms and conditions, as apply to the furnishing of
such care and services to individuals who are veterans as
defined in section 101(2) of this title. Any disability of an
individual described in subsection (b) that is a service-con-
nected disability for purposes of this subchapter (as pro-
vided for under section 1735(2) of this title) shall be consid-
ered to be a service-connected disability for purposes of fur-
nishing care and services under the preceding sentence.
‘‘(b) Subsection (a) applies to any individual who is
a Commonwealth Army veteran or new Philippine Scout
and who—
‘‘(1) is residing in the United States; and
‘‘(2) is a citizen of the United States or an alien
lawfully admitted to the United States for permanent
residence.’’.
(b) LIMITATION.—The amendment made by subsection
(a) shall take effect on the date on which the Secretary of
Veterans Affairs submits to the Committees on Veterans’ Af-
fairs of the Senate and House of Representatives and pub-
lishes in the Federal Register a certification that sufficient
resources are available for the fiscal year during which the
certification is submitted to carry out section 1734 of title
38, United States Code, as amended by such amendment,
during that fiscal year at those facilities of the Department
of Veterans Affairs where the majority of veterans described
in subsection (b) of such section will receive hospital and
nursing home care and medical services authorized by sub-
section (a) of such section.
SEC. 6. OUTPATIENT DENTAL CARE FOR ALL FORMER PRIS-
ONERS OF WAR.
Section 1712(a)(1)(F) is amended by striking ‘‘and
who was detained or interned for a period of not less than
90 days’’.
SEC. 7. IMPROVED ACCOUNTABILITY OF RESEARCH COR-
PORATIONS ESTABLISHED AT DEPARTMENT
OF VETERANS AFFAIRS MEDICAL CENTERS.
(a) AUDITS AND IMPROVED ANNUAL REPORT.—Sub-
section (b) of section 7366 is amended to read as follows:
‘‘(b)(1) Not later than March 1 each year, each such
corporation shall submit to the Secretary a report con-
cerning the preceding calendar year. Each such annual re-
port shall include the following: -
‘‘(A) A detailed statement of the corporation’s
operations, activities, and accomplishments during
the preceding calendar year.
‘‘(B) A description of each research project or ac-
tivity for which funds were provided by the corpora-
tion during that year or for which funds were pro-
vided by the corporation during a preceding year and
that is ongoing during the year covered by the report,
including, for each such project or activity, the title
of the project or activity and a description of the pur-
pose of the project or activity.
‘‘(C) A statement of the amount of funds con-
trolled by the corporation as of the first day, and as
of the last day, of the year covered by the report and
a statement of the amount of funds received, shown by
source, during the year.
‘‘(D) An itemized accounting of all disburse-
ments made during the year.
‘‘(E) The most recent audit of the corporation
under paragraph (2).
‘‘(F) Such other information as may be nec-
essary to enable the Secretary to prepare the annual
report to congressional committees required under sec-
tion 7367 of this title.
‘‘(2) A corporation with a balance of funds under its
control in excess of $300,000 at any time during a calendar
year shall obtain an audit of the corporation for that year.
Any other corporation shall obtain an independent audit
of the corporation at least once every three years. The report
on any such audit shall specifically state whether the cor-
poration audited made any payment, or provided any trav-
el, during the period covered by the audit to a member of
the board of directors of the corporation and, if so, the
amount and recipient of any such payment or travel.
‘‘(3) Any audit under paragraph (2) shall be per-
formed by an independent auditor and shall be performed
in accordance with generally accepted Government auditing
standards and in accordance with Office of Management
and Budget Circular A–133.
‘‘(4) The Inspector General of the Department shall
each year review the most recent audit under paragraph
(2) of not less than 10 percent of the corporations described
in the first sentence of paragraph (2) and not less than 10
percent of the corporations described in the second sentence
of that paragraph. As part of such review, the Inspector
General shall determine whether the audit was carried out
in accordance with generally accepted Government auditing
standards, as required by paragraph (3).’’.
(b) ANNUAL REPORT OF SECRETARY.—(1) Subchapter
IV of chapter 73 is amended—
(A) by inserting after subsection (c) of section
7366 the following:
‘‘§ 7367. Annual report to congressional committees’’;
and
(B) in the text immediately following the section
heading inserted by subparagraph (A)—
(i) by striking ‘‘(d)’’ and inserting ‘‘(a)’’;
(ii) by inserting after the first sentence the
following new sentence: ‘‘Each such report shall
be based on the annual reports submitted by the
corporations to the Secretary under section
7366(b) of this title and shall be submitted not
later than May 1 of the year following the year
covered by such reports.’’; and
(iii) by striking ‘‘The report shall’’ and in-
serting the following:
‘‘(b) Each such report shall’’.
(2) The table of sections at the beginning of such chap-
ter is amended by inserting after the item relating to section
7366 the following new item:
‘‘7367. Annual report to congressional committees.’’.
(c) EXTENSION OF AUTHORITY TO ESTABLISH RE-
SEARCH CORPORATIONS.—Section 7368 is amended by
striking ‘‘December 31, 2003’’ and inserting ‘‘December 31,
2006’’.
SEC. 8. DEPARTMENT OF DEFENSE PARTICIPATION IN RE-
VOLVING SUPPLY FUND PURCHASES.
(a) ENHANCEMENT
OF DEPARTMENT
OF DEFENSE
PARTICIPATION.—Section 8121 is amended—
(1) by redesignating subsection (b) and (c) as
subsections (d) and (e), respectively;
(2) by designating the last sentence of subsection
(a) as subsection (c); and
(3) by inserting after paragraph (3) of sub-
section (a) the following new subsection:
‘‘(b) The Secretary may authorize the Secretary of De-
fense to make purchases through the fund in the same man-
ner as activities of the Department. When services, equip-
ment, or supplies are furnished to the Secretary of Defense
through the fund, the reimbursement required by paragraph
(2) of subsection (a) shall be made from appropriations
made to the Department of Defense, and when services or
supplies are to be furnished to the Department of Defense,
the fund may be credited, as provided in paragraph (3)
of subsection (a), with advances from appropriations avail-
able to the Department of Defense.’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply only with respect to funds appro-
priated for a fiscal year after fiscal year 2002.
SEC. 9. NAME OF DEPARTMENT OF VETERANS AFFAIRS
OUTPATIENT CLINIC, NEW LONDON, CON-
NECTICUT.
The Department of Veterans Affairs outpatient clinic
located in New London, Connecticut, shall after the date
of the enactment of this Act be known and designated as
the ‘‘John J. McGuirk Department of Veterans Affairs Out-
patient Clinic’’. Any reference to such outpatient clinic in
any law, regulation, map, document, record, or other paper
of the United States shall be considered to be a reference
to the John J. McGuirk Department of Veterans Affairs
Outpatient Clinic.
Union Calendar No. 362
107TH CONGRESS
2D SESSION
H. R. 3645
[Report No. 107–600]
A BILL
To amend title 38, United States Code, to provide
for improved procurement practices by the De-
partment of Veterans Affairs in procuring health-
care items.
JULY 22, 2002
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed