I
107TH CONGRESS
2D SESSION
H. R. 3645
To amend title 38, United States Code, to provide for improved procurement
practices by the Department of Veterans Affairs in procuring health-
care items.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 29, 2002
Mr. EVANS (for himself, Mr. FILNER, Mr. GUTIERREZ, Ms. BROWN of Flor-
ida, Mr. REYES, Ms. CARSON of Indiana, Mr. LYNCH, Mr. SANDERS, Ms.
KAPTUR, Mrs. JONES of Ohio, and Mr. DINGELL) introduced the fol-
lowing bill; which was referred to the Committee on Veterans’ Affairs
A BILL
To amend title 38, United States Code, to provide for im-
proved procurement practices by the Department of Vet-
erans Affairs in procuring health-care items.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Veterans Health-Care
Items Procurement Reform and Improvement Act of
2002’’.
SEC. 2. LIMITATION ON USE OF LOCAL CONTRACTS FOR
DEPARTMENT OF VETERANS AFFAIRS PRO-
CUREMENT OF HEALTH-CARE ITEMS.
(a) IN GENERAL.—Section 8125 of title 38, United
States Code, 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 any element of the De-
partment shall be made through the use of a Federal Sup-
ply Schedule contract, or a national contract, that meets
the requirements of subsection (d).
‘‘(b)(1) A contract that is not a Federal Supply
Schedule contract or national contract meeting the re-
quirements of subsection (d) may be used for the procure-
ment of a health-care item in the case of a procurement—
‘‘(A) that is necessary to meet a current or
near-term medical emergency at a medical center;
‘‘(B) that is for a health-care item for which
there is a valid clinical need and that is not listed
in the Federal Supply Schedule or as part of a na-
tional contract;
‘‘(C) that is part of a written and approved
sharing agreement between the Department of De-
fense and the Department of Veterans Affairs with
demonstrable cost per item savings for a health-care
item listed on the Federal Supply Schedule or a na-
tional contract; or
‘‘(D) that supports prime or subcontracts with
small business concerns qualifying for a procurement
preference program under section 8 or 15 of the
Small Business Act (15 U.S.C. 637, 644), that dem-
onstrates at least cost parity with the health-care
item on the Federal Supply Schedule or national
contract and 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 pro-
curement is specifically authorized in advance in writing
by the Secretary. The authority of the Secretary under
the preceding sentence may only be delegated to the Under
Secretary for Health and the senior procurement executive
of the Department acting jointly.
‘‘(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 such item that is reasonably necessary to meet the
emergency need and the reasonably foreseeable need for
that 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) any contract with a vendor that is a dis-
tributor will be for distribution services only, unless
the manufacturer of the product can clearly dem-
onstrate that at least 90 percent of its sales of the
item through distributor is to commercial customers
with negotiated product prices and the distributor
actually stocks and distributes the product.
‘‘(e) 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.
‘‘(f) 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 from Federal Supply
Schedule and national contracts meeting the requirements
of subsection (d).
‘‘(g) The Secretary shall include in the annual report
of the Secretary under section 529 of this title information
on the procurement of health-care items during the pre-
ceding fiscal year. Such information shall be shown by
geographical service area and shall include information on
procurements made under the authority of subsection
(b)(1)(B). Such information shall include the total dollar
amount of such procurements, the ratio of the dollar
amount of such procurements to the total dollar amount
of all procurements of health-care items, and a status re-
port on implementation of this subsection.
‘‘(h) For the purposes of this section:
‘‘(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 ‘emergency’ with respect to a
procurement of a health-care item, means a procure-
ment necessary to meet an emergency need affecting
the health or safety of a person being furnished
health-care services by the Department.
‘‘(3) The term ‘Federal Supply Schedule con-
tract’ means a contract that is awarded and admin-