VA Testimony of Roger W. Baker before Congress on September 10, 2009

United States Department of Veterans Affairs

STATEMENT OF
THE HONORABLE ROGER W. BAKER
ASSISTANT SECRETARY FOR INFORMATION AND TECHNOLOGY
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE HOUSE COMMITTEE ON VETERANS' AFFAIRS
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
SEPTEMBER 10, 2009

September 10, 2009

Madam Chairwoman and Members of the Subcommittee, thank you for the opportunity to update you on the status of our Chapter 33 GI Bill Long-Term Solution efforts. This Subcommittee has always been extremely supportive of our efforts to assist all Veterans, especially those veterans entitled to Post 9/11 GI Bill benefits based on their service to our Country. We have the shared goal of providing Veterans with the opportunities to reach their educational or vocational goals. I look forward to highlighting some of our recent and future IT accomplishments, in addition to articulating the benefits that VA has derived from our Interagency Agreement (IAA) with the Department of Navy, Space and Naval Warfare Systems Center (SPAWAR). I will also individually address your concerns with the IAA, as examined in the Department of Veterans Affairs - Office of Inspector General (OIG) Report Number 09-012130-142.

The intricacies associated with VA’s IT systems and their correspondent modernization initiatives are more complex than most private sector computing environments. The demand for the experienced resources needed by these initiatives far exceeds the Office of Information and Technology’s (OI&T) ability to provide this expertise. The Economy Act, 31 U.S.C. Section 1535, allows one federal government agency to seek out and utilize the expertise of another federal agency. As such, OI&T reached out to SPAWAR in 2007 to acquire engineering and IT project management expertise as an effective, practical, economic, and appropriate solution to meet the demand for this expertise.

SPAWAR is a Department of the Navy working capital systems engineering command that provides full-service systems engineering to its customers through the development, testing, evaluation, production, and fielding of sustainable, survivable, and interoperable systems. SPAWAR is unique from other Department of Defense (DoD) Systems Engineering working capital commands, in that it works with customers outside of its Service (Navy) to develop skills and capabilities that can be leveraged to obtain engineering capability and solutions.

SPAWAR possesses skill sets and competencies in systems engineering that can help address the critical skills shortage that exists within VA. The Interagency agreement between VA and SPAWAR was a Government-to-Government partnership, to leverage this expertise and experience in support of the execution of VA’s complex IT projects. The principal purpose and central aspect of this relationship was to strengthen the knowledge, skills, and abilities of VA employees, through knowledge transfer and skilled support and obtain Information Management/Information Technology (IM/IT) engineering solutions and program management support. The agreement, although not without challenges, enabled immediate, fully-staffed teams of highly experienced program management and systems engineering staff, to facilitate real-time progress on specific project execution and project management.

The timeline of the VA/SPAWAR IAA has been as follows:

In November 2007, VA and SPAWAR created the IAA to provide VA with skilled and program management support and knowledge transfer through SPAWAR’s expertise of information management/information technology engineering solutions.
In May 2008, VA began executing amendments to the IAA to acquire technical and program management expertise for key health programs including Replacement Scheduling Application (RSA), Pharmacy Reengineering (PRE), Bi-Directional Health Information Exchange (BHIE) and Blood Bank.
In June 2008, Office of Federal Procurement Policy (OFPP) issued the memorandum, “Improving the Management and Use of Interagency Acquisitions” which provides new guidance for agreements entered on or after November 3, 2008.
In September, 2008, faced with a project management skills shortage, VA began issuing amendments under the SPAWAR IAA to support the Chapter 33 program.
In October 2008, VA’s Office of Acquisition, Logistics and Construction (OALC) and Office of General Counsel (OGC) discussed revisions to the technical and legal review processes, including the impact of the June 2008 OFPP memorandum and guidance.
In January 2009, VA’s OALC, OGC, and Office of Information and Technology (OI&T) recognized issues in the management of SPAWAR amendments issued to that point, and took actions to strengthen the requirements of future amendments and the management of ongoing amendments.
In February 2009, although it was determined that the OFPP memorandum did not directly apply to the VA/SPAWAR IAA, OALC informed OI&T of its intent to develop a new IAA and build upon the framework as stated in the memorandum to ensure success in the management and administration of VA and SPAWAR agreements. VA continues to use the original IAA while the new IAA is developed.
In March 2009, Information Letter 001AL-09-04 was issued by OALC. The Information Letter established new VA procedures for entering into any agreement with another Federal agency.
In March of 2009, the OIG began an investigation into the amendments issued during the time period of September to November, 2008. OIG staff specifically stated that they were not interested in later amendments or in subsequent changes made to strengthen the requirements and management of amendments under the IAA.
In March 2009, VA OALC established the Technology Acquisition Center (TAC) in Eatontown, NJ, to specifically support OIT acquisitions, which include
In April 2009, the Office of Enterprise Development (OED), OALC and OGC conducted a lockdown to review new amendments and validate that those amendments were within scope of the existing IAA. VA proceeded to execute approximately 15 additional amendments under existing IAA from April 2009 to present. To improve oversight, VA established a secure repository for administrative documentation, strengthened Statement of Work format, and strengthened Independent Government Cost Estimate (IGCE) requirements.
In June 2009, the OIG issued its report and its suggestions.

Presently, VA and SPAWAR continue to develop the new IAA in conformance with Information Letter 001AL-09-04. Developing this new IAA will establish governing terms and conditions and ensure VA and OFPP guidance is carried out to the fullest extent possible. The new IAA will document SPAWAR’s commitment to comply with VA regulations and policies, and ensure the reasonableness of their fees.

Since the OIG report, I have received briefings on the status of our efforts to provide a long-term solution for Chapter 33 processing via SPAWAR, and on our management of each of the 40 amendments that have been issued under the SPAWAR IAA.

Our long-term strategy to support delivery of Post-9/11 GI Bill education benefits relies on our partnership with SPAWAR Systems Center – Atlantic to design, develop, and deploy an end-to-end solution that utilizes rules-based, industry-standard technologies. The Post-9/11 GI Bill contains eligibility rules and benefit determinations that will work well with rules-based technology to reduce the need for human intervention. VA is currently working with SPAWAR Systems Center – Atlantic on the long-term IT solution. In accordance with VA’s new IT management approach (Program Management Accountability System (PMAS)), which commenced June 19, 2009, VA’s OI&T will utilize incremental development and strict management of milestones to ensure that we successfully deliver the functionality needed to serve our Veterans. New functionality will be delivered in increments of no more than 6 months, with the fourth and final release planned for December 2010. The Chapter 33 Long Term Solution will deliver an end-to-end solution, to support the delivery of Post-9/11 GI Bill benefits. The long-term solution will be:

Released in 4-6 month intervals, delivering incremental capability
Developed in a distributed application architecture framework
Supportive of a service oriented architecture
Developed using an agile methodology
Rules-based to ensure reusability and flexibility

Development of release one has begun and we will complete the solution development environment in the first quarter of FY2011. Once completed, the Solution Release Schedule will allow us to meet the following milestones:

Chapter 33 Long Term Solution Release 1 – 2QFY2010
Chapter 33 Long Term Solution Release 2 – 3QFY2010
Chapter 33 Long Term Solution Release 3 – 4QFY2010
Chapter 33 Long Term Solution Release 4 – December 2010

As mentioned earlier in my testimony, I receive regular briefings on the status of the Chapter 33 Long Term Solution from the VA/SPAWAR team. I can tell you that the project management skills exhibited in the content of those presentations are far in excess of those I have seen in any presentation from any other VA project to date. I have specifically excerpted pages from the SPAWAR presentation material to provide to other VA projects as examples of the types of project management methodologies all projects should follow.

I would now like to focus on the June 4, 2009, OIG Report, “Review of Inter-Agency Agreement between the Department of Veterans Affairs and the Department of Navy, Space and Naval Warfare Systems Center SPAWAR” and specifically address OIG’s issues of concerns and recommendations as they relate to implementing the long-term solution for managing Chapter 33 GI Bill benefits. As an overview, it is VA’s position that the implementation of the Chapter 33 long-term solution will not be negatively affected nor will the project delivery of the long-term solutions by December 2010 be delayed because of the findings within the OIG review.

The OIG reported poor administration of the IAA by both OED and SPAWAR. It was further noted that OED was not performing adequate oversight to ensure that funds were spent appropriately. OIG also attributed problems with the administration of the IAA, to insufficient technical and legal reviews conducted by OALC and OGC, respectively. OIG reported that neither VA nor SPAWAR complied with the terms and conditions of the IAA and that Statements of Work were often broad, and lacked specific timelines and deliverables.

I would like to assure the committee that the VA/SPAWAR relationship resulted in a number of solid deliverables. In addition to the support provided to the Chapter 33 program, VA’s investment in SPAWAR program management expertise proved immensely beneficial in other program areas as well. This included:

The development of key program documentation, plans, and software designs for the next-generation HealtheVet Common Services;
Comprehensive executability review of the Clinical Health Data Repository, including the determination of a viable path forward for its critical VA/DoD interoperability module;
Full lifecycle, risk-adjusted Independent Cost Estimates for the FLITE program and HealtheVet program, identifying significant cost differences from the initial government estimates; and
Information architecture for the eBenefits Portal, an interactive Web site providing a single source of information for returning service members.

While we do not agree with many of the OIG findings regarding the sufficiency of the reviews, heightened management of the SPAWAR amendments and future work within the IAA is imperative. In concert with OALC and OGC, OI&T has taken the initial steps to improve the administration of the IAA, including establishing a consolidated, secure repository for storing all administrative documentation associated with any VA/SPAWAR initiatives; strengthening the Statements of Work, to include major milestones, specific deliverables, and other controls to ensure appropriate oversight; and strengthening the IGCE, to include specificity for labor, travel, materials, and standard listing of labor categories.

Most of the remediation will occur through the initiative OI&T has established to mature the acquisitions function. This initiative includes establishment of standardized, improved processes and mentorship of OI&T acquisitions management staff to better execute these processes.

As a component of strengthening the acquisition capabilities of all IT programs, VA recognizes importance of applying those improvements to the SPAWAR relationship. OI&T will ensure that the staff assigned as Contracting Officer Technical Representatives (COTR) has the capacity to oversee all SPAWAR relationships, including the administrative aspects. This includes:

Managing, reviewing and assigning amendments and changes
Tracking cumulative data such as monthly financial reports
Monitoring and resolving issues, to include determination if there are systemic problems
Monitoring all documentation and deliverables
Confirming receipt of services and monitoring if OI&T is receiving best value

OI&T will establish acquisition training for OI&T staff and provide acquisition experts to coach and mentor program managers. In addition to training staff to execute the acquisitions processes effectively, training will also address Organizational Conflict of Interest (OCI), Personal Services, and Government Ethics.

OI&T is standardizing acquisition documents to:

Clearly define tasks, deliverables, performance measures, period of performance, VA points of contact
Ensure deliverables directly tie to tasks
Tasks are specific and tied to only one program/project

OI&T is standardizing its reporting. Reports will be created for financial, staffing, and schedule status. To ensure adherence to cost, schedule and performance, easy-to-use standard management templates will be created for the program managers to assist in the review and analysis of financials, and other project status information.

OI&T will pursue an approach to ensure that a key principal purpose of the IAA, to strengthen the knowledge, skills, and abilities of VA staff, is the central aspect of all future work between VA and SPAWAR, as well as initiate use of performance based statements of work, to improve specificity and better manage outcomes of VA’s relationship with SPAWAR. Additionally, VA is taking steps to ensure better training of its personnel to manage IT programs, operations and monitor contract performance, including greater oversight of the technical and legal review processes by OALC and OGC. Through the implementation of these objectives and new policies, VA will continue to work with SPAWAR, to address the issues cited in the IG report as they apply to the IAA.

Specific to the administration of the SPAWAR Chapter 33 amendments, VA already made great strides in establishing a proper governance and oversight plan. The Chapter 33 Long Term Solution Governance and Oversight Plan describes how the long term solution engages in oversight. Oversight includes the monitoring of the deliverables submitted by SPAWAR. Reviews of the Monthly Progress Reports, project deliverables reviews and planning sessions, and day to day oversight of the SPAWAR teams provide several layers of oversight.

The Chapter 33 program utilized the IAA to gain assistance with the project management expertise that VA was not able to provide. SPAWAR provided in-domain expertise to build a robust necessary framework and plan to fulfill functional and organizational requirements. Program management and technical services were provided to consistently integrate standard protocols, pilot reporting structures to ensure process maturity, compare the project’s methodology to reflect industry best practices from organizations such as Gartner, and design infrastructure to support modular tools.

The acquisition will focus on the development of the Chapter 33 Long Term Solution using agile methodologies. This requirement encompasses two distinct tasks, the second of which is optional dependent upon the performance of the first. Task 1 includes the development of the initial solution functionality and a system prototype. Task 2, which is optional, contains requirements for completing development, conducting final end-user acceptance testing, deploying the full capability, training staff on the new system, and sustaining the system.

In order to meet the objectives of both Task 1 and Optional Task 2, significant material investments are required. The materials investments to be obtained by SPAWAR include (1) necessary hardware and operating systems to host the solution; (2) commercial off-the-shelf products; (3) life-cycle software tools for management of all solution requirements, architecture artifacts, software components, and documentation; and (4) networking and telecommunications hardware in order to connect to VA’s network infrastructure. The investment will produce and maintain a framework for managerial reporting, quality control, and team training.

The Chapter 33 Long Term Solution will not be negatively affected nor will the project delivery of the Long Term Solution by December 2010 be delayed because of the OIG review. As mentioned in prior testimony and responses to inquiries, the Chapter 33 project instituted consistent oversight of all aspects of the project, including SPAWAR, from the outset. The Post-9/11 GI Bill IT solution Integrated Project Team (IPT) meets weekly to conduct a review and status of the initiative. These IPT reviews include 10 participants from development, infrastructure, engineering, and the Veterans Benefits Administration. Also, VA maintains frequent oversight of the SPAWAR contribution to the Post-9/11 GI Bill initiative through daily communications concerning requirements, architecture, and software development. Finally, the Post-9/11 GI Bill IT solution underwent an extensive review associated with OI&T’s Transformation-21 initiative, which included an analysis of eight key program attributes.

In inviting us to today’s session, members of the subcommittee inquired as to whether VA researched the Department of Education’s Common Origination and Disbursement (COD) benefits management program for potential incorporation into the Post-9/11 GI Bill IT solution. VA and the Department of Education assessed this possibility early in the planning stages of the program. However, VA concluded that the process required to administer benefits for the Post-9/11 GI Bill was distinct from that required for the COD program, therefore the COD program did not represent a comparable model for the Post-9/11 GI Bill solution. VA welcomes the opportunity to collaborate with agencies throughout the Federal Government and will continue to assess best practices in the development of its IT solutions.

In closing, I would like to thank you again for your continued support and the opportunity to testify before this Subcommittee on the important work we are undertaking to improve educational benefits for those, who have selflessly served our Nation. I would now like to address any questions you might have.