II 118th CONGRESS 1st Session S. 2422 IN THE SENATE OF THE UNITED STATES July 20, 2023 Mr. Tester (for himself and Mr. Moran ) introduced the following bill; which was read twice and referred to the Committee on Veterans' Affairs A BILL To amend title 38, United States Code, to establish the Acquisition Review Board of the Department of Veterans Affairs and to establish the Director of Cost Assessment and Program Evaluation in the Department, and for other purposes.

1. Short title This Act may be cited as the Acquisition Reform and Cost Assessment Act of 2023 or ARCA Act of 2023 . 2. Department of Veterans Affairs acquisition review, cost assessment, and program evaluation (a) In general Chapter 81 of title 38, United States Code, is amended by inserting after subchapter VI the following new subchapter: VII Acquisition review, cost assessment, and program evaluation 8181. Definitions In this subchapter: (1) The term major acquisition program means a program of the Department to acquire property, assets, supplies, services, or a combination thereof, with an estimated life-cycle cost of $250,000,000 or more, as determined by the Secretary. (2) The term non-major acquisition program means a program of the Department to acquire property, assets, supplies, services, or a combination thereof, with an estimated life-cycle cost of less than $250,000,000, as determined by the Secretary. 8182. Acquisition Review Board (a) In general There is established in the Department a board, to be known as the Acquisition Review Board , to support the Secretary in managing acquisition programs under the laws administered by the Secretary. (b) Composition (1) The Deputy Secretary of Veterans Affairs shall serve as Chair of the Acquisition Review Board. (2) The Deputy Secretary may designate an employee of the Department to oversee the operations of the Acquisition Review Board. (3) The Deputy Secretary shall ensure participation by other relevant Department officials with responsibilities relating to acquisitions as permanent members of the Acquisition Review Board, including the following: (A) The Chief Acquisition Officer. (B) The Chief Financial Officer. (C) The Chief Veterans Experience Officer. (D) The Chief Information Officer. (E) The Assistant Secretary for Enterprise Integration. (F) Other relevant senior Department officials, as the Deputy Secretary determines appropriate, including such officials from the Veterans Health Administration, the Veterans Benefits Administration, and the National Cemetery Administration. (c) Meetings The Acquisition Review Board shall convene— (1) at the discretion of the Deputy Secretary; and (2) not later than 45 days after any date on which— (A) a major acquisition program— (i) is proposed to the Secretary; (ii) is approved by the Secretary to commence; (iii) concludes an acquisition phase; (iv) is not in compliance with requirements relating to cost, schedule, or performance under the applicable program baseline described in section 8183(b)(1) of this title, as determined by the Deputy Secretary; or (v) requires additional review, as determined by the Deputy Secretary; and (B) a non-major acquisition program requires review, as determined by the Deputy Secretary. (d) Responsibilities The Acquisition Review Board shall be responsible for— (1) with respect to a major acquisition program proposed to the Secretary, determining whether the business strategy, budget, management, and organization of such program is feasible and in accordance with the mission and strategic goals of the Department; (2) with respect to a major acquisition program approved by the Secretary to commence, determining the appropriate acquisition category for such program; (3) with respect to a major acquisition program that has concluded an acquisition phase— (A) authorizing the manager of such program appointed pursuant to section 8183(a) of this title to advance such program to a subsequent acquisition phase if the relevant requirements in such applicable program baseline have been satisfied; and (B) advising such manager on appropriate corrective action if such requirements have not been satisfied; and (4) reviewing, on a continuous basis, each major acquisition program to ensure each such program is in compliance with— (A) the relevant requirements in such applicable program baseline; and (B) the certification requirement under subsection (c) of such section. (e) Acquisition decision memorandum Not later than 30 days after any date on which the Deputy Secretary convenes a meeting pursuant to subsection (c), the Deputy Secretary shall submit to the Secretary and the Committees on Veterans’ Affairs of the Senate and the Committee on Veterans' Affairs of the House of Representatives an acquisition decision memorandum that includes— (1) a summary of— (A) the purpose of such meeting; (B) any matter discussed during such meeting; (C) any decision of the Acquisition Review Board made during such meeting, including any such decision to allow a major acquisition program to deviate from the relevant requirements in such applicable program baseline; and (D) any matters assigned for further discussion during a subsequent meeting of the Acquisition Review Board; and (2) a certification by the Deputy Secretary that the contents of such memorandum are accurate. 8183. Major acquisition program managers (a) Appointments Not later than 30 days after any date on which the Secretary approves a major acquisition program to commence, the Deputy Secretary shall appoint a manager to be responsible for administering such program. (b) Duties Each manager appointed pursuant to subsection (a) shall be responsible for, with respect to the applicable major acquisition program— (1) developing, in coordination with the Acquisition Review Board, a plan to administer such program, to be known as the program baseline , that includes— (A) a description of each acquisition phase of such program; (B) for each such acquisition phase, requirements for advancing such program to a subsequent acquisition phase; and (C) estimates of the cost, schedule, and performance of such program that account for the entire life cycle of such program; (2) ensuring such program is in compliance with such requirements; (3) securing funding necessary to satisfy such requirements; (4) adopting standardized processes with established success to support the progress of such program, including— (A) milestones; (B) exit criteria; and (C) specific accomplishments; (5) to the extent practicable, ensuring that personnel of the Department responsible for estimating the budget and cost of such program are provided with an opportunity to raise concerns relating to such budget and cost prior to the establishment of the program baseline under paragraph (1); (6) on a continuous basis, assessing and managing risks to satisfying the requirements of such program baseline relating to cost and schedule; (7) establishing a workforce for such program that is qualified and sufficient to perform the necessary functions of such program; and (8) ensuring such program has adequate technology and production capacity prior to commencing an acquisition phase of such program related to manufacturing, if applicable. (c) Consideration of alternate requirements Not later than 90 days after any date on which a manager appointed pursuant to subsection (a) establishes a program baseline described in subsection (b)(1), such manager shall submit to the Chair of the Acquisition Review Board a certification that such manager considered establishing alternate requirements in such program baseline relating to the cost, schedule, and performance of each acquisition phase of such program prior to establishing such program baseline. (d) Acquisition Review Board authorization required (1) Not later than 30 days after any date on which a major acquisition program concludes an acquisition phase, the manager of such program appointed pursuant to subsection (a) shall notify the Acquisition Review Board under section 8182 of this title. (2) Such manager may not advance such program to a subsequent acquisition phase without the authorization of such Acquisition Review Board pursuant to subsection (d)(3) of such section. 8184. Cost assessment and program evaluation (a) Director of cost assessment and program evaluation There is established a Director of Cost Assessment and Program Evaluation. (b) (1) Independent advice to Secretary of Veterans Affairs The Director of Cost Assessment and Program Evaluation is the principal advisor to the Secretary and other senior officials of the Department, and shall provide independent analysis and advice to such officials, on the following matters: (A) Matters assigned to the Director pursuant to this section. (B) Matters assigned to the Director by the Secretary pursuant to this section and to section 303 of this title. (2) The Director may communicate views on matters within the responsibility of the Director directly to the Secretary and the Deputy Secretary of Veterans Affairs without obtaining the approval or concurrence of any other official within the Department. (c) Deputy directors There are two Deputy Directors within the Office of the Director of Cost Assessment and Program Evaluation, as follows: (1) The Deputy Director for Cost Assessment. (2) The Deputy Director for Program Evaluation. (d) Responsibilities The Director of Cost Assessment and Program Evaluation shall serve as the principal official within the senior management of the Department for the following: (1) Cost estimation and cost analysis for acquisition programs of the Department. (2) Analysis and advice on matters relating to the planning and programming phases of the Planning, Programming, Budgeting, and Execution system, and the preparation of materials and guidance for such system, as directed by the Secretary, working in coordination with the Assistant Secretary for Management and the Chief Financial Officer of the Department. (3) Analysis and advice for resource discussions relating to requirements under consideration in the Veterans Health Administration, the Veterans Benefits Administration, or the National Cemetery Administration. (4) Formulation of study guidance for analyses of alternatives for major acquisition programs and performance of such analyses, as directed by the Secretary. (5) Review, analysis, and evaluation of programs for executing approved strategies and policies, ensuring that information on programs is presented accurately and completely, and assessing the effect of spending by the Department on the United States economy. (6) Assessments of alternative plans, programs, and policies with respect to the acquisition programs of the Department. (7) Leading the development of improved analytical skills and competencies within the cost assessment and program evaluation workforce of the Department and improved tools, data, and methods to promote performance, economy, and efficiency in analyzing Department planning and the allocation of Department resources. (e) Independent cost estimation and cost analysis The Director of Cost Assessment and Program Evaluation shall ensure that the cost estimation and cost analysis processes of the Department provide accurate information and realistic estimates of cost for the acquisition programs of the Department. In carrying out that responsibility, the Director shall— (1) prescribe, by authority of the Secretary, policies and procedures for the conduct of cost estimation and cost analysis for the acquisition programs of the Department; (2) provide guidance to and consult with the Secretary, the Chief Acquisition Officer, the Assistant Secretary for Management, the Chief Financial Officer of the Department, the Under Secretary for Health, the Under Secretary for Benefits, and the Under Secretary for Memorial Affairs with respect to cost estimation in the Department in general and with respect to specific cost estimates and cost analyses to be conducted in connection with a major acquisition program; (3) issue guidance relating to the proper selection of confidence levels in cost estimates generally, and specifically, for the proper selection of confidence levels in cost estimates for major acquisition programs and major automated information system programs; (4) issue guidance relating to full consideration of life-cycle management and sustainability costs in major acquisition programs and major automated information system programs; (5) review all cost estimates and cost analyses conducted in connection with major acquisition programs and major automated information system programs; (6) conduct independent cost estimates and cost analyses for major acquisition programs and major automated information system programs for which the Chief Acquisition Officer is the Milestone Decision Authority— (A) in advance of— (i) any certification under this title; and (ii) any decision to enter into low-rate initial production or full-rate production; and (B) at any other time considered appropriate by the Director or upon the request of the Chief Acquisition Officer; and (7) periodically assess and update the cost indexes used by the Department to ensure that such indexes have a sound basis and meet the Department’s needs for realistic cost estimation. (f) Review of cost estimates, cost analyses, and records of the Department The Secretary shall ensure that the Director— (1) promptly receives the results of all cost estimates and cost analyses conducted by the Veterans Benefits Administration, the Veterans Health Administration, or the National Cemetery Administration and all studies conducted by the Administration in connection with such cost estimates and cost analyses for major acquisition programs and major automated information system programs of the Administrations; and (2) has timely access to any records and data in the Department (including the records and data of each Administration) that the Director considers necessary to review in order to carry out any duties under this section. (g) Participation, concurrence, and approval in cost estimation The Director may— (1) participate in the discussion of any discrepancies between an independent cost estimate and the cost estimate assessments of the Veterans Benefits Administration, the Veterans Health Administration, and the National Cemetery Administration for a major acquisition program or major automated information system program of the Department; (2) comment on deficiencies in the methodology or execution of any cost estimate or cost analysis developed by the Veterans Benefits Administration, the Veterans Health Administration, or the National Cemetery Administration for a major acquisition program or major automated information system program; (3) concur in the choice of a cost estimate within the baseline description or any other cost estimate (including the confidence level for any such cost estimate) for use at any event specified in subsection (e)(6); and (4) participate in the consideration of any decision to request authorization of a multi-year procurement contract for a major acquisition program. (h) Annual report on cost assessment activities (1) Each year, not later than 10 days after the transmittal to Congress of the budget of the President for a fiscal year pursuant to section 1105 of title 31, the Director shall submit to the Secretary, the Chief Acquisition Officer of the Department, the Assistant Secretary for Management, the Chief Financial Officer of the Department, the Committee on Veterans' Affairs of the Senate and the Committee on Veterans' Affairs of the House of Representatives an annual report on the cost estimation and cost analysis activities of the Department carried out during the previous year. (2) Each report submitted pursuant to paragraph (1) shall include, for the period covered by the report, the following: (A) A summary of the cost estimation and cost analysis activities of the Department. (B) Assessments of the following: (i) The progress of the Department in improving the accuracy of its cost estimates and analyses. (ii) The extent to which each of the Veterans Benefits Administration, the Veterans Health Administration, and the National Cemetery Administration have complied with policies, procedures, and guidance issued by the Director with regard to the preparation of cost estimates for major acquisition programs and major automated information systems. (iii) The overall quality of cost estimates prepared by each of the Administrations for major acquisition programs and major automated information system programs. (iv) Any consistent differences in methodology or approach among the cost estimates prepared by the Administrations and the Director. (3) (A) The Director shall ensure that a report submitted to paragraph (1) does not include any information, such as proprietary or source selection sensitive information, that could undermine the integrity of the acquisition process. (B) The report submitted pursuant to paragraph (1) to the committees described in such paragraph shall be posted on an internet website of the Department that is available to the public. (4) The Secretary may comment on any report of the Director submitted to the committees described in paragraph (1) pursuant to such paragraph. (i) Staff The Secretary shall ensure that the Director has sufficient professional staff to enable the Director to carry out the duties and responsibilities of the Director under this section. . (b) Clerical amendment The table of sections at the beginning of such chapter is amended by adding at the end the following: SUBCHAPTER VII—Acquisition review, cost assessment, and program evaluation Sec. 8181. Definitions. Sec. 8182. Acquisition Review Board. Sec. 8183. Major acquisition program managers. Sec. 8184. Cost assessment and program evaluation. . (c) Report on monitoring of operating and support costs for major acquisition programs (1) Report to Secretary of Veterans Affairs Not later than one year after the date of the enactment of this Act, the Director of Cost Assessment and Program Evaluation established pursuant to section 8184 of title 38, United States Code, as added by subsection (a), shall— (A) review systems and methods of the Department of Veterans Affairs currently in effect for tracking and assessing operating and support costs on major acquisition programs (as defined in section 8181 of such title, as added by subsection (a)); and (B) submit to the Secretary of Veterans Affairs a report on such findings and recommendations as the Director may have as a result of the review conducted pursuant to subparagraph (A), including an assessment by the Director of the feasibility and advisability of establishing baselines for operating and support costs under such title. (2) Transmittal to Congress Not later than 30 days after receiving the report required by paragraph (1)(A), the Secretary shall submit to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives the report received by the Secretary under paragraph (1)(B), together with such comments on the report as the Secretary considers appropriate. 3. Comptroller General of the United States reports on costs and financial information regarding major Department of Veterans Affairs acquisition programs (a) Review of operating and support costs of major acquisition systems (1) In general Not later than one year after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives a report on growth in operating and support costs for major acquisition systems. (2) Elements In preparing the report required by paragraph (1), the Comptroller General shall, at a minimum— (A) identify the original estimates for operating and support costs for major acquisition systems selected by the Comptroller General for purposes of the report; (B) assess the actual operating and support costs for such major acquisition systems; (C) analyze the rate of growth for operating and support costs for such major acquisition systems; (D) for such major acquisition systems that have experienced the highest rate of growth in operating and support costs, assess the factors contributing to such growth; (E) assess measures taken by the Department of Veterans Affairs to reduce operating and support costs for major acquisition systems; and (F) develop such recommendations as the Comptroller General considers appropriate. (b) Review of financial information relating to major veteran acquisition programs (1) Review The Comptroller General of the United States shall perform a review of weaknesses in operations affecting the reliability of financial information on the systems and assets to be acquired under major acquisition programs. (2) Elements The review required under paragraph (1) shall— (A) identify any weaknesses in operations under major acquisition programs that hinder the capacity to assemble reliable financial information on the systems and assets to be acquired under such programs in accordance with applicable accounting standards; (B) identify any mechanisms developed by the Department of Veterans Affairs to address weaknesses in operations under major acquisition programs identified pursuant to subparagraph (A); and (C) assess the implementation of the mechanisms set forth pursuant to subparagraph (B), including— (i) the actions taken, or planned to be taken, to implement such mechanisms; (ii) the schedule for carrying out such mechanisms; and (iii) the metrics, if any, instituted to assess progress in carrying out such mechanisms. (3) Consultation In performing the review required by paragraph (1), the Comptroller General shall seek and consider input from the Assistant Secretary of Veterans Affairs for Management. (4) Report Not later than one year after the date of the enactment of this Act, the Comptroller General shall submit to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives a report on the findings of the Comptroller General with respect to the review performed pursuant to paragraph (1). (c) Definition of major acquisition program In this section, the term major acquisition program has the meaning given such term in section 8181 of title 38, United States Code, as added by section 2(a).