On behalf of Secretary Shinseki, and VA’s 300,000 employees, thank you for the opportunity to speak to you today. The Secretary sends his regrets that he is not here for opening ceremonies, but will join you on Monday. Under Secretary for Health Randy Petzel, Associate Deputy Under Secretary for Policy Tom Pamperin, and VISN 7 Director Larry Biro will all brief you.
In some sense, I’m a warm-up speaker this year—the first person you’ll hear from on the subject of Veterans Affairs. Ordinarily, the Secretary or I would tell you about all the great things we have done or are trying to do for Veterans. But this year you’ll be hearing from the President himself, who is ultimately responsible for all our efforts at VA. So I’m going to leave much of the good news to President Obama, and use my time here to give you an inside look to our operation and tell you about some of the things we’re doing internally to improve VA, which will in turn improve VA’s care of and service to Veterans.
First, let me tell you something I heard recently from a member of my staff. He was visiting his daughter in Arizona last summer and driving along Interstate 10 between Tucson and Phoenix. Pretty country, if you’ve never been there, but also pretty desolate—and hot. The temperature was close to 110. Near the little town of Picacho, he saw a DAV van pulling onto the highway, headed toward Phoenix. There, in the Arizona desert—“in the middle of nowhere” were his words—was a DAV van taking a Veteran to an appointment, on a round-trip that was sure to last several hours.
I mention it because I want you to know—whether it’s under Arizona’s summer sun, or Alaska’s northern lights, DAV’s service to America’s Veterans is both seen and appreciated—and we at VA thank you for it.
We have a lot to do. Our country is at war. Veterans’ needs and expectations are changing. There is growing demand for your services and ours. For example:
In one sense, this is all good news—VA is here to provide services to Veterans. But it is also a challenge to meet this increased demand.
In order to meet these overarching challenges and make a difference in the lives of Veterans, we have to transform the operations of VA. We have to—
The long-term solution to many of VA’s problems depends on people, business process redesign, and information technology—one of reasons I was hired as “Chief Operating Officer”—and so for the rest of my time here today, I will talk about some of the major initiatives we’ve been working on in IT, acquisitions, human capital, and innovation that will change the way VA does business and enable us to serve Veterans better.
Let’s start with IT.
VA’s IT issues are significant. Many projects are challenged by the inability to meet cost and schedule performance measures. So, last year, we instituted a Performance Management and Accountability System (PMAS) to strengthen our IT oversight and performance. Last June, we placed 47 IT projects under the PMAS, and a month later, we paused 45 of them. Many were over a year behind schedule. Some are too important not to get done.
About a third of the paused projects were committed to meeting near-term milestones, and were meeting their milestones. Another third were re-planned and restarted. The remaining third were halted or had their funding cut.
In February, we committed all 300 of our IT to the PMAS, to make sure we are funding only projects that meet strict time and performance standards. And earlier this month, we bit the bullet once again and cancelled a $400 million IT modernization project for not living up to expectations.
To maintain accountability of projects still remaining, we have instituted a new training requirement that puts our government and commercial partners in the same room for training and review of requirements, governance, and expectations at the start of the engagement. We are also conducting project-management training for VA IT managers.
VA is committed to putting Veterans first in our procurements. Since 2007, we have nearly doubled our procurements from Veteran-owned small businesses—from 10% in fiscal year 2007 to 19% in fiscal year 2009—and we have more than doubled our contracts with service-disabled small businesses, going from 7% in fiscal year 2007 to 16% in 2009.
Seventy-five percent of the first billion dollars obligated under the American Recovery and Reinvestment Act, or ARRA, went to Veteran-owned small businesses. Almost all, 98% of that first billion, was awarded competitively. Granted, ARRA procurements are not representative of our regular procurements, so we can’t expect Veteran-owned businesses to always do that well in competition. But we know Veteran-owned small businesses can compete and win, and we’re determined to give them that chance.
We mean business on program management; and we will hold ourselves and our private-sector partners accountable for cost, schedule, and technical performance. But to move ahead with IT transformation, we need to organize the work a lot better.
So we’ve adopted a new acquisition strategy called Transformation Twenty-One Total Technology—T4 for short. When I say new strategy, I mean it’s new to VA. Other agencies, like the Army and the Air Force, have successfully employed the same strategy for major acquisitions for years.
In fact, last year, VA hired, en masse, the Army’s experts in this strategy—not just a handful of experts, but 160 experienced acquisition specialists who became available as a result of the Defense Department’s Base Realignment and Closure Commission. These specialists provided the critical mass for standing up a new office to provide a full-service, one-stop shop for IT acquisitions.
T4 consolidates our IT transformation requirements into 15 prime contracts, leveraging economies of scale to save both time and money, while also increasing efficiency and enabling greater oversight and accountability in accordance with our PMAS objectives.
We have briefed industry on T4 already, and the response has been overwhelmingly positive. Veteran-owned small businesses have been especially enthusiastic, because T4 reserves seven of the 15 prime contracts for them. Four of the seven are reserved for service-disabled small businesses.
T4 also includes significant goals for subcontractors and other protections to make sure Veteran-owned small business get a substantial share of the work. We estimate T4 will mean roughly $1 billion in contracts for Veteran-owned small business, each year for five years.
Secretary Shinseki has called T4 a “win-win-win strategy”—Veteran-owned businesses win by getting more contracting opportunities; VA wins by getting the contractor support it needs more quickly, with less risk, reduced cost, and in a more manageable form; and all Veterans win by getting better services and support from a transformed VA. That’s what T-4 is all about.
Let’s talk about human capital.
Veterans of every service know the old adage: “Take care of your people, and your people will take care of the mission.” The private sector has learned the same lesson. Both the military and the best private corporations devote substantial time and money to training and nurturing their members—at all levels.
But the civil service has lagged behind. We’re turning things around at VA with our Human Capital Investment Plan. There is a direct link between an organization’s investment in employees and organizational performance.
Employees are the lynchpin to achieving the outcomes we want for Veterans. We are making the necessary investments in them so that they can meet the changing needs of Veterans and their families.
Last summer, the President and Secretary Shinseki announced the VA Innovation Initiative—or VAi2—to accelerate transformation of the VA by holding a department-wide competition for new ideas. We’ve already completed the first two rounds of the competition, which generated over 10,000 ideas from 45,000 VA employees. Twenty million dollars has been invested in the most promising proposals from these two competitions.
In June, we kicked off the next phase of VAi2, broadening the field to include private-sector entrepreneurs and academic leaders. We’re asking them for their best ideas for innovations to increase access, reduce or control costs, and improve the quality of services Veterans and their families receive. And we’ve already got some great feedback to help us find the solutions we’re looking for, not only from employees, but from industry.
Let me give you a specific example of what I mean. Last year the Secretary added three more illnesses to the list of presumptive illnesses related to Agent Orange. This is a hugely important policy change for our Vietnam Veterans. But it also means that we’ll be receiving hundreds of thousands of more claims into a system already under tremendous strain.
So we created a so-called “Performance Work Statement” to solicit industry interest and ideas on how to handle the influx. We thought we’d get a couple of comments. What we got were almost two dozen responses, with terrific ideas, that gave us a much better idea about how to craft the RFP for actual work. That contract was awarded last month.
IT, acquisitions, human capital, innovation—just a few examples of how we are getting the VA aircraft carrier to turn.
There’s a lot more going on at VA, and a lot more that I could talk about—but I don’t want to steal the President’s thunder. Suffice it to say for now that you couldn’t ask for a more pro-Veteran president or a better advocate for the issues important to Veterans, to VA, and to DAV. He is deeply committed to doing right by America’s Veterans, by building a strong and sustainable U.S. military and a 21st century VA, and Secretary Shinseki and I are 100% behind him on that.
In closing, let me reiterate the thanks of the department for all that DAV does. Simply put: VA cannot succeed in its mission without DAV’s advocacy and partnership in every aspect of our daily work. From its inception, the DAV has been a powerful voice for Veterans’ rights, wherever and whenever disabled Veterans need help. No major piece of Veteran legislation has or can become law without DAV’s input.
Your dedication is also on full display every year in Aspen, at the VA-DAV Winter Sports Clinic—where disabled Veterans’ athleticism, endurance, and courage have been conquering the mountain for nearly 20 years. VA is proud to be your partner in that noble endeavor, just as we are proud to work with you as your department. We have only one mission, and that mission is you—the Veteran.
Thanks again for the opportunity to speak with you this morning. I look forward to working with you in the coming year. God bless you all, and God bless our Veterans. Thank you.