Calendar No. 277
119th CONGRESS 1st Session |
[Report No. 119–97]
To amend title 38, United States Code, to reorganize the acquisition structure of the Department of Veterans Affairs and to establish the Director of Cost Assessment and Program Evaluation in the Department, and for other purposes.
May 5, 2025
Mr. Moran (for himself, Mr. Banks, Mr. Warner, Mr. King, and Mr. Rounds) introduced the following bill; which was read twice and referred to the Committee on Veterans' Affairs
December 2, 2025
Reported by Mr. Moran, with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
To amend title 38, United States Code, to reorganize the acquisition structure of the Department of Veterans Affairs and to establish the Director of Cost Assessment and Program Evaluation in the Department, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
(a) Short title.—This Act may be cited as the “Acquisition Reform and Cost Assessment Act of 2025” or the “ARCA Act of 2025”.
(b) Table of contents.—The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Department of Veterans Affairs acquisition organization.
Sec. 3. Department of Veterans Affairs major acquisition program managers.
Sec. 4. Department of Veterans Affairs acquisition and procurement reorganization matters.
Sec. 5. Independent verification and validation of major acquisition programs of Department of Veterans Affairs.
Sec. 6. Department of Veterans Affairs cost assessment and program evaluation.
Sec. 7. Department of Veterans Affairs other transaction authority and advance market commitments for technologies or services for provision of health care.
Sec. 8. Development and expansion of an 1102 internship or development pipeline.
Sec. 9. Clerical amendment.
(a) Definitions.—Chapter 81 of title 38, United States Code, is amended by inserting after subchapter VI the following new subchapter:
“In this subchapter:
“(1) The term ‘major acquisition program’ means a program of the Department to acquire property, systems or technology, assets, supplies, services, or a combination thereof, with an estimated total program 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, systems or technology, assets, supplies, services, or a combination thereof, with an estimated total program life-cycle cost of less than $250,000,000, as determined by the Secretary.”.
(b) Assistant Secretary for Acquisition and Innovation.—Section 308 of such title is amended—
(1) in subsection (a)(1), by striking “seven” and inserting “eight”; and
(2) in subsection (b), by adding at the end the following new paragraph:
“(13) Acquisition and innovation.”.
(c) Acquisition organization.—Subchapter VI of chapter 81 of such title, as added by subsection (a), is amended by adding at the end the following new section:
Ҥ 8182. Acquisition organization
“(a) Assistant Secretary for Acquisition and Innovation; Chief Acquisition Officer.— (1) The Secretary shall designate one of the Assistant Secretaries specified in subsection (a)(1) of section 308 of this title as the Assistant Secretary of Veterans Affairs for Acquisition and Innovation, who shall focus solely on the administration of functions specified in subsection (b)(13) of such section.
“(2) Pursuant to section 1702(a) of title 41, the Secretary shall designate the Assistant Secretary of Veterans Affairs for Acquisition and Innovations as the Chief Acquisition Officer of the Department.
“(b) Office of Acquisition and Innovation.— (1) There is in the Department an Office of Acquisition and Innovation.
“(2) The head of the Office of Acquisition and Innovation shall be the Assistant Secretary of Veterans Affairs for Acquisition and Innovation designated pursuant to subsection (a).
“(3) The Secretary shall take such actions as may be necessary to ensure that major program offices of the Department align under the Office of Acquisition and Innovation and report directly to the Assistant Secretary of Veterans Affairs for Acquisition and Innovation.
“(4) The budget of the Office of Acquisition and Innovation shall be established in the budget justification materials submitted to Congress in support of the budget of the Department (as submitted with the budget of the President under section 1105(a) of title 31).
“(c) Deputy Assistant Secretary for Logistics.— (1) Pursuant to section 308(d) of this title, the Secretary shall appoint a Deputy Assistant Secretary of Veterans Affairs for Logistics, who shall report to the Assistant Secretary for Acquisition and Innovation.
“(2) The Deputy Assistant Secretary of Veterans Affairs for Logistics shall be responsible for administration of logistics and supply chain operations of the Department.
“(d) Deputy Assistant Secretary for Innovation.— (1) Pursuant to section 308(d) of this title, the Secretary shall appoint a Deputy Assistant Secretary of Veterans Affairs for Innovation, who shall report to the Assistant Secretary for Acquisition and Innovation.
“(2) The Deputy Assistant Secretary of Veterans Affairs for Innovation shall be responsible for all research, development, testing, and innovation development organizations of the Department, including the Veterans Health Administration Innovation Ecosystem.
“(e) Deputy Assistant Secretary for Procurement.— (1) Pursuant to section 308(d) of this title, the Secretary shall appoint a Deputy Assistant Secretary of Veterans Affairs for Procurement, who shall report to the Assistant Secretary for Acquisition and Innovation.
“(2) The Deputy Assistant Secretary of Veterans Affairs for Procurement shall be responsible for all procurement and contracting organizations of the Department.”.
Subchapter VI of chapter 81 of title 38, United States Code, as added by section 2, is amended by adding at the end the following new section:
“(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 report to the Assistant Secretary for Acquisition and Innovation and shall be responsible for, with respect to the applicable major acquisition program—
“(1) developing, in coordination with the Assistant Secretary, and functional teams responsible for the program requirements, 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) ensure such program complies with cost accounting standards, as applicable;
“(8) establishing a workforce for such program that is qualified and sufficient to perform the necessary functions of such program; and
“(9) 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 program decision authority under subsection (d) 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) Program decision authority.—The Secretary shall ensure that—
“(1) program decision authority for oversight of a major acquisition program of the Department is the Assistant Secretary for Acquisition and Innovation; and
“(2) program management offices for major acquisition programs are independent of the Veterans Benefits Administration, the Veterans Health Administration, the National Cemetery Administration and Department staff offices by reporting directly to the Assistant Secretary for Acquisition and Innovation.
“(e) Program decision authority 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 program decision authority under subsection (d).
“(2) Such manager may not advance such program to a subsequent acquisition phase without the authorization of such program decision authority under subsection (d).”.
(a) Contracting officers.—The Secretary of Veterans Affairs shall transfer all contracting officers and acquisition centers in the Department of Veterans Affairs to the Office of Acquisition and Innovation established by section 8182(b) of title 38, United States Code, as added by section 2(c).
(b) Consolidation of logistics and supply chain operations.—The Secretary shall take such actions as may be necessary to consolidate all activities relating to the administration of logistics and supply chain operations of the Department under the Deputy Assistant Secretary of Veterans Affairs for Logistics appointed pursuant to section 8182(e) of such title, as added by section 2(c).
(a) Contracting authority.—Not later than 120 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall—
(1) review and take action to ensure that all independent verification and validation, as well as testing contracts in effect in the Department, comply with the provisions of this Act and the amendments made by this Act; and
(2) seek to enter into one or more contracts using competitive procedures with one or more entities to carry out the functions described in subsection (c).
(1) IN GENERAL.—An entity is not eligible to be awarded a contract under this section unless the Chief Acquisition Officer of the Department of Veterans Affairs determines, at the time of evaluation of offers submitted under subsection (a), that the entity is currently performing or has performed, during the preceding three-year period, not fewer than three prime contracts for—
(A) the independent verification and validation or systems engineering and technical advisory (SETA) support of major acquisition programs or defense systems, in accordance with guidance of the Department of Defense relating to such acquisition programs or such business systems; or
(B) the independent verification and validation or systems engineering and technical advisory (SETA) support of the development or acquisition of major acquisition programs or defense systems, in accordance with guidance of the Department of Defense relating to such acquisition programs or such business systems.
(2) LIMITATION.—The Secretary shall ensure that an entity, including its subsidiaries, joint ventures, subcontractors, teaming partners, investments, and corporate officers, awarded a contract under this section does not perform the functions specified in subsection (c) with respect to a project or system of the Department or organizational subdivision of the Department if such entity is performing or has performed, during the three-year period preceding the date of such award, a covered contract—
(A) for such project or system; or
(B) for the Department or such organizational subdivision of the Department.
(3) CONSIDERATION REGARDING FUTURE PROCUREMENTS.—A contracting officer of the Department shall consider the requirements of this subsection when implementing the organizational conflict of interest mitigation procedures under subpart of title 48, Code of Federal Regulations, or successor regulations, with respect to future procurements in which an entity awarded under subsection (a) is an offeror.
(c) Functions.—The functions specified in this subsection are the following:
(1) The independent verification and validation of each major acquisition program or major information technology project—
(A) when such major program is initiated, with respect to its design and the development of its requirements and acquisition;
(B) at the conclusion of such project; and
(C) at any other intervals during such project selected by the Chief Acquisition Officer of the Department.
(2) The independent verification and validation of other projects of the Department selected by the Chief Acquisition Officer of the Department, at intervals selected by the Chief Acquisition Officer.
(3) With respect to any project or system of the Department selected by the Chief Acquisition Officer of the Department the evaluation of—
(A) testing conducted by the Department or other testing entity;
(B) technical architecture or design, including data management;
(C) development processes;
(D) stability and resiliency;
(E) integration or interoperability with other systems, including an assessment of data quality;
(F) adoption and use;
(G) management, including governance, costs, and schedules; and
(H) any other elements or processes as determined by the Chief Acquisition Officer.
(1) IN GENERAL.—Not later than 30 days after the date on which an independent verification and validation is performed pursuant to subsection (c)(1), the Secretary shall transmit to Congress a copy of such independent verification and validation.
(2) VERIFICATION AND VALIDATION AND EVALUATIONS.—Not later than 30 days after the date on which the Committee on Veterans’ Affairs of the Senate or the Committee on Veterans' Affairs of the House of Representatives requests a copy of any independent verification and validation under paragraph (2) of subsection (c) or evaluation under paragraph (3) of such subsection, the Secretary shall transmit to such committee a copy of such verification and validation or evaluation.
(3) ORGANIZATIONAL CONFLICT OF INTEREST; MITIGATION PLANS.—Not later than 30 days after the date on which the Committee on Veterans' Affairs of the Senate or the Committee on Veterans' Affairs of the House of Representatives requests a copy of any organizational conflict of interest mitigation plan submitted by an offeror pursuant to subsection (b)(3), the Secretary shall transmit to such committee a copy of such plan.
(e) Funding.—The Chief Financial Officer of the Department shall ensure, to the extent practicable, that each organizational subdivision of the Department that enters into a contract under subsection (a) proportionally contributes amounts to fund each such contract.
(f) Definitions.—In this section:
(1) COVERED CONTRACT.—The term “covered contract” means a prime contract or subcontract for—
(A) information technology support or software or system design, development, sustainment, or maintenance services;
(B) professional or management consulting services; or
(C) advisory and assistance services.
(2) INDEPENDENT VERIFICATION VALIDATION.—The term “independent verification and validation” means a comprehensive inspection, a review, analysis, and testing, or an assessment of systems, software, or hardware, as applicable, performed by an entity awarded a contract under subsection (a)—
(A) to verify that the requirements of a project or system, or a development phase of such a project, are correctly defined;
(B) to validate that the project or system, or a product of a development phase of such a project, correctly implements the required functionality and applicable security requirements; and
(C) verify that a project or system, or a product of a development phase of such a project, satisfies and conforms to the requirements, standards, and practices of each life cycle phase and successfully completes each life cycle activity.
(3) MAJOR ACQUISITION PROGRAM.—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).
(4) MAJOR INFORMATION TECHNOLOGY PROJECT.—The term “major information technology project” has the meaning given such term in section 8171 of title 38, United States Code.
(5) MAJOR SYSTEM.—The term “major system” has the meaning given such term in section 2.101 of title 48, Code of Federal Regulations (or a successor regulation).
(a) In general.—Subchapter VI of chapter 81 of title 38, United States Code, as added by section 2 and amended by section 3, is further amended by adding at the end the following new section:
“(a) Director of cost assessment and program evaluation.—There is established a Director of Cost Assessment and Program Evaluation, who shall report directly to the Secretary.
“(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, the National Cemetery Administration, and all staff offices.
“(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—
“(i) any certification under this title; and
“(ii) any decision to enter into product or system low-rate initial production, initial pilot implementation, or full-rate production or implementation; 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, the National Cemetery Administration, or staff offices 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, the National Cemetery Administration, and staff offices 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, the National Cemetery Administration, or staff offices 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, the National Cemetery Administration, and staff offices 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) 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 using cost-accounting standards and procedures, as appropriate, 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.
Subchapter VI of chapter 81 of title 38, United States Code, as added by section 2 and amended by sections 3 and 6, is further amended by adding at the end the following new section:
Ҥ 8185. Other transaction authority
“(a) Authority.—The Secretary may enter into transactions (other than contracts, cooperative agreements, and grants) with nontraditional contractors to carry out extramural basic or applied research, or innovation development activities. Such authority may be exercised by the Deputy Assistant Secretary for Innovation for activities aligned with the mission of the Veterans Health Administration Innovation Ecosystem.
“(b) Requirements.—The Secretary may enter into a transaction under subsection (a) to carry out extramural basic or applied research if each of the following criteria are met:
“(1) The research is not duplicative of other research being conducted by the Department under another program or through a contract, cooperative agreement, or grant.
“(2) The senior procurement executive has determined that entering into the transaction to carry out the research is appropriate.
“(3) The transaction will not exceed $5,000,000 (including all options), unless the senior procurement executive determines that exceeding such amount is appropriate.
“(4) Not less than 33 percent of the total cost of the research (regardless of the percentage of such total cost for which the transaction is funding) is paid for, or provided through nonmonetary contributions, by sources other than the Federal Government, unless the senior procurement executive determines that—
“(A) meeting such threshold for non-Federal sources of funding or contributions is not possible; and
“(B) carrying out the research without meeting such threshold is in the public interest.
“(5) In the case of transactions supporting innovation development activities described in subsection (a), the Deputy Assistant Secretary for Innovation certifies that such activities align with the goals of improving the delivery of health care for veterans, operational efficiency, or technology adoption, and do not require approval of the Institutional Review Board unless involving human subjects research as defined in part 16 of title 38, Code of Federal Regulations, or successor regulations.
“(c) Provision of information.—
“(A) NOTIFICATION.—Not later than 30 days after the date on which the Secretary enters into a transaction under this section, the Secretary shall notify the appropriate congressional committees of such transaction, including a copy of each determination made under subsection (b).
“(B) BY REQUEST.—Upon the request of an appropriate congressional committee, the Secretary shall submit to the appropriate congressional committees a copy of a transaction under this section or performance or financial information relating to such transaction.
“(2) COMPTROLLER GENERAL OF THE UNITED STATES.—With respect to transactions entered into under this section, the Secretary shall ensure that, upon request, the Comptroller General of the United States may examine records of any party to the transaction or any entity that participates in the performance of the transaction if such records are generated in the performance of the transaction or are directly related to the transaction.
“(d) Regulations.—The Secretary shall prescribe regulations to carry out this section.
“(e) Termination.—The authority to enter into transactions under this section shall terminate on the date that is three years after the date of the enactment of the Acquisition Reform and Cost Assessment Act of 2025.
“(f) Definitions.—In this section:
“(1) The term ‘appropriate congressional committees’ means—
“(A) the Committee on Veterans' Affairs and the Subcommittees on Military Construction, Veterans’ Affairs, and Related Agencies of the Committees on Appropriations of the Senate; and
“(B) the Committee on Veterans' Affairs and the Subcommittees on Military Construction, Veterans’ Affairs, and Related Agencies of the Committees on Appropriations of the House of Representatives.
“(2) The term ‘entity’ means a for-profit corporation, partnership, or single proprietorship, nonprofit organization, or university organized and having principal operations in the United States.
“(3) The terms ‘extramural budget’, ‘research’, and ‘research and development’ have the meaning given those terms in subsection (e) of section 9 of the Small Business Act (15 U.S.C. 638).
“(4) The term ‘innovation development activities’ means efforts to design, test, or implement new technologies, processes, or systems to improve health care delivery, operational efficiency, or veteran outcomes, including prototyping, pilot programs, and technology adoption initiatives, whether or not such efforts meet the definition of ‘research’ under part 16 of title 38, Code of Federal Regulations, or successor regulations.
“(5) The term ‘nontraditional contractor’ means an entity that is not currently performing and has never performed any contract or subcontract for any department or agency of the Federal Government.
“(6) The term ‘senior procurement executive’ means the official of the Department designated under section 1702(c) of title 41.
Ҥ 8186. Advance market commitments for technologies or services for provision of health care
“(a) Authority.—The Secretary may enter into an advance market commitment under which the Secretary shall guarantee to purchase, for a predetermined price, a technology or service provided by an entity that addresses an unmet need in the provision of health care to veterans.
“(b) Requirements.—An advance market commitment entered into under subsection (a) shall include the following:
“(1) Clearly defined and transparent rules.
“(2) A clear definition of the technology or service to be provided, to ensure safety, effectiveness, and feasible delivery.
“(3) Dispute settlement mechanisms.
“(4) The ability to modify the terms of the commitment on the basis of new information regarding the number of veterans to be served with such technology or service.
“(c) Report.—Not later than 120 days after executing an advance market commitment under subsection (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 a report on the status and efficacy of such commitment.”.
The Secretary of Veterans Affairs shall monitor the training and experience gap of professionals and establish or expand any existing internship or development pipelines for 1102 contracting officers of the Department.
The table of sections at the beginning of chapter 81 of title 38, United States Code, is amended by adding at the end the following:
“8181. Definitions.
“8182. Acquisition reorganization.
“8183. Major acquisition program managers.
“8184. Cost assessment and program evaluation.
“8185. Other transaction authority.
“8186. Advance market commitments for technologies or services for provision of health care.”.
(a) Short title.—This Act may be cited as the “Acquisition Reform and Cost Assessment Act of 2025” or the “ARCA Act of 2025”.
(b) Table of contents.—The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Department of Veterans Affairs acquisition organization.
Sec. 3. Department of Veterans Affairs major acquisition program managers.
Sec. 4. Department of Veterans Affairs acquisition and procurement reorganization matters.
Sec. 5. Independent verification and validation of major acquisition programs of Department of Veterans Affairs.
Sec. 6. Department of Veterans Affairs cost assessment and program evaluation.
Sec. 7. Improvements to hiring of entry-level acquisition positions in Department of Veterans Affairs.
Sec. 8. Independent analysis of acquisition process of Department of Veterans Affairs.
Sec. 9. Requirements development process.
Sec. 10. Conforming amendments.
Sec. 11. Clerical amendments.
(a) Definitions.—Chapter 81 of title 38, United States Code, is amended by inserting after subchapter VI the following new subchapter:
“SEC. 8181. Definition of major acquisition program.
“In this subchapter, the term ‘major acquisition program’ means a program of the Department to acquire services, supplies, technology, systems, or a combination thereof, with an estimated total program cost, estimated by the Secretary, that exceeds—
(c) Acquisition organization.—Subchapter VI of chapter 81 of such title, as added by subsection (a), is amended by adding at the end the following new section:
“SEC. 8182. Acquisition organization.
“(a) Assistant Secretary for Acquisition; Chief Acquisition Officer.— (1) The Secretary shall designate one of the Assistant Secretaries specified in subsection (a)(1) of section 308 of this title as the Assistant Secretary of Veterans Affairs for Acquisition, who shall focus solely on the administration of functions specified in subsection (b)(10) of such section.
“(b) Office of Acquisition.— (1) There is in the Department an Office of Acquisition.
“(2) The head of the Office of Acquisition shall be the Assistant Secretary of Veterans Affairs for Acquisition designated pursuant to subsection (a).
“(3) The Secretary shall take such actions as may be necessary to ensure that major acquisition program offices of the Department align under the Office of Acquisition and report directly to the Assistant Secretary of Veterans Affairs for Acquisition.
“(4) The budget of the Office of Acquisition, including budgets for major acquisition programs, shall be established in the budget justification materials submitted to Congress in support of the budget of the Department (as submitted with the budget of the President under section 1105(a) of title 31).
“(c) Deputy Assistant Secretary for Logistics.— (1) Pursuant to section 308(d) of this title, the Secretary shall appoint a Deputy Assistant Secretary of Veterans Affairs for Logistics, who shall report to the Assistant Secretary for Acquisition.
“(d) Deputy Assistant Secretary for Procurement.— (1) Pursuant to section 308(d) of this title, the Secretary shall appoint a Deputy Assistant Secretary of Veterans Affairs for Procurement, who shall report to the Assistant Secretary for Acquisition.
“(e) Deputy Assistant Secretary for Acquisition, Program Management, and Performance.— (1) Pursuant to section 308(d) of this title, the Secretary shall appoint a Deputy Assistant Secretary of Veterans Affairs for Acquisition, Program Management, and Performance, who shall report to the Assistant Secretary for Acquisition.
“(f) Program Executive Officers.— (1) The Assistant Secretary for Acquisition shall appoint no fewer than four Program Executive Officers, each responsible for overseeing major acquisition programs in one of the following areas:
“(2) Each Program Executive Officer shall report directly to the Assistant Secretary for Acquisition and shall supervise the managers of major acquisition programs within their respective area, as appointed under section 8183 of this title.
Subchapter VI of chapter 81 of title 38, United States Code, as added by section 2, is amended by adding at the end the following new section:
Ҥ 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 applicable Program Executive Officer shall appoint a manager to be responsible for administering such program.
“(b) Qualifications.—Each manager appointed pursuant to subsection (a) shall be—
“(c)Duties.—Each manager appointed pursuant to subsection (a) for a major acquisition program shall—
“(1) report to the Assistant Secretary for Acquisition through the Program Executive Officer responsible for the major acquisition program; and
“(2) shall be responsible for, with respect to the major acquisition program—
“(A) developing, in coordination with the Program Executive Officer, a plan to administer major acquisition program, which shall be known as the ‘program baseline’ for the major acquisition program, that includes—
“(B) ensuring the major acquisition program is in compliance with such requirements and providing all program documentation, including program baseline documentation, cost, schedule, performance and risk assessments, and other relevant materials, to designated officials and relevant governance boards;
(a) Organizational consolidation.—Not later than one year after the date of the enactment of this Act, the Secretary of Veterans Affairs shall organizationally consolidate under the Assistant Secretary of Veterans Affairs for Acquisition every activity of the Department of Veterans Affairs, including the Veterans Benefits Administration, the Veterans Health Administration, and the National Cemetery Administration, that relates to—
(b) Relocation.—Subsection (a) shall not be construed to require the physical relocation of employees of the Department.
(c) Plan and briefing.—
(1) IN GENERAL.—Not later than 90 days after commencing organizational consolidation under subsection (a), the Secretary shall—
(a) Contracting authority.—Not later than 120 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall seek to enter into one or more contracts using competitive procedures with one or more entities to carry out the functions described in subsection (c).
(b) Eligibility.—
(1) IN GENERAL.—An entity is not eligible to be awarded a contract under this section unless the Chief Acquisition Officer of the Department of Veterans Affairs determines, at the time of evaluation of offers submitted under subsection (a), that the entity is currently performing or has performed, during the preceding three-year period, not fewer than three prime contracts from either governmental or commercial health care organizations for—
(A) the independent verification and validation services or equivalent services, including systems engineering and technical advisory (SETA) support of major acquisition programs; or
(B) the independent verification and validation or systems engineering and technical advisory (SETA) support of the development or acquisition of major acquisition programs or defense systems, in accordance with guidance of the Department of Defense relating to such acquisition programs or such business systems.
(2) PAST PERFORMANCE.—For any contract used to demonstrate eligibility under paragraph (1), an entity must have performed the work at a satisfactory or better level as indicated by the past performance information in the Contractor Performance Assessment Reporting System, or successor system.
(3) DEMONSTRATION OF LACK OF CONFLICT OF INTEREST.—The Secretary shall revoke the eligibility of an entity under this subsection if an entity does not demonstrate clear and unmitigable evidence that the entity does not have a conflict of interest with respect to the effective performance of functions under subsection (c).
(c) Functions.—The functions specified in this subsection are the following:
(d) Funding.—The Chief Financial Officer of the Department shall ensure that each organizational subdivision of the Department that enters into a contract under subsection (a) proportionally contributes amounts to fund each such contract.
(e) Independent verification validation defined.—The term “independent verification and validation” means a comprehensive inspection, a review, analysis, and testing, or an assessment of systems, software, or hardware, as applicable, performed by an entity awarded a contract under subsection (a)—
(a) In general.—Subchapter VI of chapter 81 of title 38, United States Code, as added by section 2 and amended by section 3, is further amended by adding at the end the following new section:
Ҥ 8184. Cost assessment and program evaluation
“(a) Director of Cost Assessment and Program Evaluation.—There is in the Department a Director of Cost Assessment and Program Evaluation, who shall report directly to the Secretary.
“(b) Responsibilities.—The responsibilities of the Director are as follows:
“(1) To develop policies and procedures for cost estimation and analysis of major acquisition programs of the Department.
“(2) To conduct independent cost estimates and analyses for major acquisition programs to support acquisition decisions, or any other acquisitions as directed by the Secretary,
“(3) To provide an independent cost estimate to the Assistant Secretary for Acquisition in advance of a decision to proceed with full-scale acquisition for a major acquisition program or any other program as directed by the Director.
“(5) Not less frequently than once each year, to submit to the Secretary and the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives an annual report on cost estimation and program evaluation activities, including recommendations to improve acquisition efficiency. Such report shall include a list of all acquisitions where the independent cost estimate for a major acquisition program exceeded the budget request for the program by more than 5 percent.
(b) 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, and not less frequently than once each year thereafter until December 31, 2028, the Director of Cost Assessment and Program Evaluation of the Department of Veterans Affairs shall submit to the Secretary of Veterans Affairs a report on systems and methods for tracking and assessing operating and support costs of major acquisition programs (as defined in section 8181 of title 38, United States Code, as added by section 2), including recommendations for establishing cost baselines.
(a) Priority use of internship programs for hiring into entry-level positions in acquisitions.—The Secretary of Veterans Affairs shall prioritize the use of acquisition internship programs to hire employees to entry-level positions relating to acquisition in the Department of Veterans Affairs.
(b) Annual number of participants in acquisition internship programs.—
(1) IN GENERAL.—Not later than September 30 of the first fiscal year beginning after the date of the enactment of this Act, the Secretary shall take such actions as may be necessary to ensure that the annual number of participants in acquisition internship programs of the Department is—
(2) TERMINATION.—The requirements of paragraph (1) shall terminate on the date on which the Secretary certifies to the appropriate committees of Congress that the projected number of graduates of acquisition internship programs is sufficient to satisfy the human capital needs of the Department with respect to acquisition, taking into account the rate of attrition and projected retirements of personnel.
(3) APPROPRIATE COMMITTEES OF CONGRESS DEFINED.—In this subsection, the term “appropriate committees of Congress” means the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives.
(a) Systems engineering analysis.—Not later than one year after the date of the enactment of this Act, the Secretary of Veterans' Affairs shall seek to enter into a memorandum of understanding with the acquisition research center established under section 4142(a) of title 10, United States Code, to conduct a systems engineering analysis of the acquisition process of the Department of Veterans Affairs.
(b) Report.—Not later than one year after the date in which the Secretary enters into the memorandum of understanding required by subsection (a), the Secretary shall submit to 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 acquisition research center with respect to the analysis conducted under such subsection.
(a) In general.—Subchapter VI of chapter 81 of title 38, United States Code, as added by section 2 and amended by sections 3 and 6, is further amended by adding at the end the following new section:
“SEC. 8185. Requirements development process.
“(a) Establishment of process.— (1) The Secretary shall establish a standardized requirements development process for major acquisition programs.
“(2) The process established pursuant to paragraph (1) shall—
“(A) define and validate mission-driven requirements for major acquisition programs exceeding $200,000,000 annually or $1,000,000,000 in lifecycle costs, in coordination with the Assistant Secretary for Acquisition;
“(b) Limitation on personnel.—The Secretary shall implement the process established pursuant to subsection (a) using staff within the Office of Acquisition and other relevant offices of the Department, as established under section 8182 of this title, without creating new positions, unless a subsequent cost-benefit analysis, validated by the Director of Cost Assessment and Program Evaluation, justifies additional resources.”.
(b) Report.—Not later than 180 days after the date of the enactment of this Act, the Secretary shall submit to the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans' Affairs of the House of Representatives a report detailing the process established pursuant to section 8185 of such title, as added by subsection (a), and a plan for implementation of such process, including timelines for integration with major acquisition program baselines.
Subchapter VI of chapter 81 of title 38, United States Code, is amended—
The table of sections at the beginning of chapter 81 of title 38, United States Code, is amended—
(2) by adding at the end the following:
“8181. Definition of major acquisition program.
“8182. Acquisition reorganization.
“8183. Major acquisition program managers.
“8184. Cost assessment and program evaluation.
“8185. Requirements development process.”.
Calendar No. 277 | |||||
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[Report No. 119–97] | |||||
A BILL | |||||
To amend title 38, United States Code, to reorganize the acquisition structure of the Department of Veterans Affairs and to establish the Director of Cost Assessment and Program Evaluation in the Department, and for other purposes. | |||||
December 2, 2025 | |||||
Reported with an amendment |