VA Testimony of Keith M. Wilson before Congress on September 24, 2009

United States Department of Veterans Affairs

STATEMENT OF
KEITH M. WILSON
DIRECTOR, EDUCATION SERVICE
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE
HOUSE COMMITTEE ON VETERANS’ AFFAIRS
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

September 24, 2009

Madam Chairwoman and other Members of the Subcommittee, good afternoon. I am pleased to be here today to provide the Department of Veterans Affairs’ (VA) views on pending legislation.

I regret we did not have sufficient time to formulate Departmental views on five measures, H.R. 1169, H.R. 3554, H.R. 3561, H.R. 3577, and H.R. 3579. However, we will be pleased to provide written views and estimates of costs of enactment for these bills for the record.

EDUCATION PROGRAMS

H.R. 2614

H.R. 2614, the “Veterans’ Advisory Committee on Education Reauthorization Act of 2009,” would amend section 3692(c) of title 38, United States Code, to extend the current termination date of the Veterans’ Advisory Committee on Education (VACOE) for 6 years -- from December 31, 2009, to December 31, 2015.

The VACOE was established to provide advice to the Secretary of Veterans Affairs on the administration of education and training programs for veterans and servicepersons, reservists and guard personnel, and for dependents of veterans. The Committee may also make such reports and recommendations as it considers appropriate to the Secretary and Congress.

VA supports this legislation; the Secretary looks forward to continuing to receive recommendations and advice from the VACOE.

We estimate that the cost associated with the enactment of H. R. 2614 would be insignificant.

H.R. 2928

H.R. 2928 would amend the Post-9/11 GI Bill (chapter 33 of title 38, United States Code) by adding a new section to provide benefits for apprenticeship and on-the-job training (OJT). The new section 3320 would provide for a monthly benefit payment to individuals pursuing full-time programs of apprenticeship or other OJT under chapter 33, using the graduated structure for similar training under other VA educational assistance programs, such as the Montgomery GI Bill - Active Duty (MGIB-AD) and Selected Reserve (MGIB-SR) programs, and the Post-Vietnam Era Veterans Educational Assistance program. For each of the first 6 months of an individual’s pursuit of such a program, the individual would be paid 85 percent of the amount equal to the national average cost of tuition at an institution of higher education; for the second 6 months of such pursuit, the individual would be paid 65 percent of such amount; and for each of the months following that the individual would be paid 45 percent of such amount. Any apprenticeship or other OJT benefit payment would be in addition to any other educational assistance benefit payment made under chapter 33.

H.R. 2928 would also amend section 3313 of title 38 to include apprenticeship or other OJT under the definition of approved programs of education for purposes of the Post-9/11 GI Bill.

VA supports allowing individuals who qualify for the Post-9/11 GI Bill to receive benefits for OJT and apprenticeship training, subject to Congress identifying offsets for any additional costs. However, we have reservations about this bill, as drafted, due to implementation challenges presented by the current legislative language. We do not understand what is meant by the “national average cost of tuition at an institution of higher education,” or how we should establish monthly rates under it. We suggest instead language that would specify a basic amount that VA could use to determine the monthly benefit rate, similar to the current approach used in the MGIB-AD program. We would appreciate the opportunity to work with the Committee to address these concerns.

If approved, this legislation would take effect 90 days after the date of the enactment. This would present some difficulty to VA because we currently do not have a payment system to support OJT and apprenticeship payments under the Post-9/11 GI Bill. We estimate a new payment system would not be available until December 2010.

Additionally, administration of the Post-9/11 GI Bill would be impacted by the increase in beneficiaries who could elect to receive the Post-9/11 GI Bill in lieu of the MGIB-AD, the MGIB-SR, or the Reserve Educational Assistance Program (REAP).

In view of the difficulty in understanding the “national average” tuition provision, we are unable to estimate the cost of enactment of this bill. Accordingly, in view of this difficulty, and for the foregoing reasons, we are not able to support H.R. 2928 as drafted.

SERVICEMEMBERS CIVIL RELIEF ACT

H.R. 1182

H.R. 1182, the “Military Spouses Residency Relief Act,” would amend the Servicemembers Civil Relief Act to guarantee the equity of spouses of military personnel with regard to matters of residency for voting, tax, and land right purposes. H.R. 1182 affects programs administered by the Department of Defense (DOD). We, therefore, defer to DOD on the merits of this bill.

H.R. 2696

H.R. 2696, the “Servicemembers’ Rights Protection Act,” would amend the Servicemembers Civil Relief Act to authorize the U.S. Attorney General, or any person protected by any provision of that Act, to enforce rights afforded under the Act. This bill relates to active-duty service personnel and would not affect VA programs. Therefore, we defer to DOD and the Department of Justice regarding the merits of this bill.

H.R. 2874

H.R. 2874, the “Helping Active Duty Deployed Act of 2009,” would amend the Servicemembers Civil Relief Act, and the Higher Education Act of 1965, to improve the equitable relief available for servicemembers called to active duty with respect to cellular telephone service, residential and motor vehicle leases, and tuition and fees for education. Section 2 of H.R. 2874 affects programs administered by DOD. Section 3 would amend the Higher Education Act of 1965 to provide for tuition relief for students called to military service. VA, therefore, respectfully defers to DOD and the Department of Education regarding the merits of H. R. 2874.

PROCUREMENT, CONTRACTING, AND SMALL BUSINESS MATTERS

H. R. 294

Section 2 of H.R. 294 would re-authorize the small business loan program for service-disabled Veterans with disability ratings of at least 10 percent. VA supports re-authorization of the loan program, in order to increase employment opportunities for Veterans and to promote economic stabilization by encouraging the establishment and expansion of Veteran-owned small businesses (VOSB.

Section 2(f) of the bill states that “[t]he Secretary shall enter into a contract with an appropriate entity for the purpose of carrying out the program under this subchapter.” VA believes that a partnership with the Small Business Administration (SBA), through an interagency agreement, would be preferable in order to gain the benefit of SBA’s expertise in administering business loan programs.

VA is formulating its views regarding section 3 of the bill and will forward our comments for the record.

Section 4 of the bill would align VA’s contracting processes for Veteran-owned small business with SBA’s section 8(a) program. VA is unclear on the intent of the provision. Under 38 U.S.C. 8127, veteran-owned small businesses already have priority over section 8(a) contractors. Veterans’ achievements under 38 U.S.C. § 8127 since its mid-2007 effective date demonstrate that the new law’s sourcing priority is helping to ensure equitable consideration of Veteran-owned small businesses in VA contracts. VA is concerned that the proposed provision could create confusion and have unintended negative consequences on existing authorities.

For the reasons noted, VA does not support H.R. 294. The Department is formulating its estimate of the cost associated with enactment of the bill and will provide that information for the record.

H. R. 2416

H.R. 2416 would amend 38 U.S.C. § 8127 to mandate that VA use Federal Supply Schedules to meet the goals established by the Secretary under this statute.

We cannot support this bill since it would be far too restrictive for VA acquisition operations and would remove any business discretion that VA contracting officers have to consider other acquisition vehicles, such as competitive set-asides, sole source awards, or full and open market competition, when appropriate.

VA estimates that there are no direct costs to VA associated with the enactment of H. R. 2416.

H. R. 2461

H. R. 2461, the ”Veterans Small Business Verification Act,” would amend title 38 to clarify VA’s responsibility to verify the veteran status of the owners of small business concerns listed in the VA database.

VA awarded a contract for VA Verification Program Advisory and Assistance Services (A&AS) and the contractor was fully operational by late July 2009. The contractor will benchmark the existing verification process and recommend improvements. The contractor is comparing our verification program to other small business certification programs in existence today to determine best practices in certification procedures. VA expects to receive the report by the end of September 2009.

In addition, the Government Accountability Office (GAO) is completing its own review of the verification program. GAO is conducting research and fact-finding in September and October of this year. It plans to complete report writing and follow-up in November 2009, submit its draft report to VA for comments in December, and publish the results of a 3-year study in January 2010. This investigation will provide GAO’s review of the verification program, with recommendations for improvements, from a third-party observer’s viewpoint.

The reviews by GAO and by the A&AS contractor are under way. The funding to support both reviews has already been allocated. GAO is considered an authoritative, independent body whose recommendations will be respected by both VA and external stakeholders. The A&AS contractor is also an independent body with the responsibility to review other certification programs and compare VA’s verification program to validate VA’s processes.

The cost to verify the 17,000 businesses in the database in the timeframes contemplated by H.R. 2461 would be approximately $12 million annually. For the foregoing reasons, VA does not support enactment of this bill. However, we would be pleased to work with the Subcommittee to formulate appropriate legislation upon completion of above-noted reviews.

H. R. 3223

H.R. 3223 would require a VA contracting officer to award a contract to a small business concern owned and controlled by veterans using other than competitive procedures in specified circumstances. It would also prohibit using ownership and control by a veteran or veterans of more than one small business as grounds for disqualification as a veteran-owned business for purposes of VA procurements.

Section 1(a)(1) of H. R. 3223 would change the wording in section 8127 of title 38 from “may” to “shall,” to require contracting officers to contract with service-disabled Veteran-owned or Veteran-owned small businesses for all VA procurements under $5 million. VA believes that the proposed language would be too restrictive and would remove necessary business judgments that must be made at the discretion of VA contracting officers to acquire goods and services by the best means available for an applicable acquisition.

Sections 1(a)(2) and (3) would allow owners with multiple businesses, as well as owners who work part-time in the business or at a location outside the proximity of the business location, to qualify for verification. Permitting part-time ownership, remote ownership or ownership of multiple businesses by a single eligible party increases the likelihood that businesses controlled by ineligible parties may receive contract awards from the Department. Eligible individuals must have at least 51 percent ownership and day-to-day control of businesses in small business programs. VA’s position is developed after review of other Federal small business programs, examination of protest and appeal decisions and study of Government Accountability Program reports which establish that day-to-day control is very difficult to sustain in part-time or remote ownership.

Section 1(b) would require VA to issue interim policy change guidance within 30 days that would be in direct contradiction of the current verification regulation published in 38 C.F.R. part 74. Thirty days would be insufficient time for the necessary rulemaking.

For the foregoing reasons, VA does not support the enactment of H.R. 3223.

Madam Chairwoman, this concludes my statement. I would be happy to respond to questions you or the other Members of the Subcommittee may have regarding our views as presented.