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109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-256

======================================================================



 
   DEPARTMENT OF VETERANS AFFAIRS INFORMATION TECHNOLOGY MANAGEMENT 
                        IMPROVEMENT ACT OF 2005

                                _______
                                

October 27, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Buyer, from the Committee on Veterans' Affairs, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4061]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 4061) to amend title 38, United States Code, to 
improve the management of information technology within the 
Department of Veterans Affairs by providing for the Chief 
Information Officer of that Department to have authority over 
resources, budget, and personnel related to the support 
function of information technology, and for other purposes, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                              Introduction

    The reported bill reflects the Committee's consideration of 
H.R. 4061.
    On September 14, 2005, the full Committee held a hearing on 
the Department of Veterans Affairs (VA) reorganization of its 
Information Technology (IT) infrastructure, and potential 
legislative solutions to provide VA with a more efficient use 
of the IT resources.
    On October 17, 2005, the Chairman and Ranking Member of the 
Veterans' Affairs Committee, Honorable Steve Buyer and 
Honorable Lane Evans, respectively, along with Mr. Strickland, 
Mr. Everett, Mr. Brown of South Carolina, Mr. Boozman, Mr. 
Filner, Mr. Gutierrez, Ms. Corrine Brown of Florida, Mr. Reyes, 
Ms. Ginny Brown-Waite of Florida, Mr. Burton of Indiana, Mr. 
Udall of New Mexico, Mr. Bradley of New Hampshire, Mr. Moran of 
Kansas, and Mr. Turner introduced H.R. 4061, the Department of 
Veterans Affairs Technology Management Improvement Act of 2005.
    On October 20, 2005, the full Committee met and ordered 
H.R. 4061 reported favorably to the House by voice vote.

                      Summary of the Reported Bill

    H.R. 4061 would:
          1. Amend Title 38 USC to improve the management of 
        information technology within the Department of 
        Veterans Affairs by providing the Chief Information 
        Officer the authority over resources, budget, and 
        personnel related to the support function of 
        information technology for the Department.
          2. Require the Secretary of Veterans Affairs, through 
        the Chief Information Officer, to develop and maintain 
        a process for the selection and oversight of 
        information technology for the Department.
          3. Require the Secretary of Veterans Affairs, through 
        the Chief Information Officer, to develop an 
        information technology strategic plan that includes 
        performance measures and an integrated enterprise 
        architecture; and require the Chief Information Officer 
        to review and update the information technology 
        strategic plan and enterprise architecture on an 
        ongoing basis in order to maintain currency with 
        technological changes, and changing mission needs of 
        the Department.
          4. Mandate that funds for information technology be 
        obligated in accordance with the process the Department 
        develops for the selection and oversight of information 
        technology.
          5. Require that amounts appropriated for the 
        Department for any fiscal year that are available for 
        information technology shall be allocated consistent 
        with annual appropriations acts; require that 
        allocation of any funding provided for through the 
        annual appropriations process that is inconsistent with 
        the allocation method known as the Veterans Equitable 
        Resource Allocation be approved by the Secretary.
          6. Require the Secretary to submit a report to 
        Congress that identifies amounts requested for 
        information technology for the Department when the 
        budget for any fiscal year is submitted by the 
        President to Congress under Title 31, Section 1105; and 
        require the report to set forth those amounts both for 
        each Administration within the Department and for the 
        Department aggregate and to identify, for each such 
        amount, how that amount is aligned with and supports 
        the Department's information technology strategic plan.
          7. Require the Department of Veterans Affairs Chief 
        Information Officer to select a Chief Information 
        Officer for each of the Veterans Health Administration, 
        the Veterans Benefits Administration, and the National 
        Cemetery Administration; and require that each 
        Administration Chief Information Officer selected:
                  a. be designated as a Department Deputy Chief 
                Information Officer, and will report directly 
                to the Department of Veterans Affairs Chief 
                Information Officer.
                  b. be responsible for implementing in their 
                respective Administrations, as directed by the 
                Department Chief Information Officer, the 
                information technology strategic plan and the 
                integrated enterprise architecture.
                  c. maintain operational control of all 
                information technology system assets and 
                personnel, including the direct management of 
                their respective Administration's software and 
                applications development activities, necessary 
                to accomplish the objectives of the Department 
                Chief Information Officer to support the 
                mission of the Department and its respective 
                Administrations.
                  d. be the principal advocate for the 
                information technology needs of their 
                respective Administration and shall assure, by 
                coordinating with the Department Chief 
                Information Officer, that the business and 
                mission needs of their respective 
                Administrations are met by considering 
                requirements at all levels.
          8. Require that the Secretary submit to the 
        Committees on Veterans' Affairs of the Senate and the 
        House of Representatives an annual report that provides 
        the Secretary's assessment of the implementation during 
        the year covered by the report; and require that each 
        report include the assessment of the Secretary as to 
        the increased efficiency within the Department of 
        information technology acquisition processes, 
        management, responsibility and accountability, and the 
        estimated cost savings to the Department as a result of 
        those provisions.
          9. Require regular reports to Congress from the 
        Department of Veterans Affairs on the status of 
        implementation of the Act at predetermined intervals, 
        as well as require a final report once the Act is fully 
        implemented.

                       Background and Discussion

    In 2001, the Department of Veterans Affairs became the last 
cabinet-level agency to comply with the requirements of the 
Clinger-Cohen Act and appoint a full-time Chief Information 
Officer (CIO). The Veterans Affairs' Committee has maintained 
oversight over the development of the Office of the CIO and 
closely monitored the strategic alignment between information 
technology support systems and the expressed business and 
mission needs of the Department. The Committee and its 
Subcommittees conducted five oversight hearings and requested 
many staff-level briefings related to the VA Information 
Technology (IT) infrastructure. The Committee believes that the 
failure of several major IT projects at VA are related to 
mismanagement, a lack of project oversight within VA, and an 
unclear or ineffective alignment of IT with the mission and 
business needs of the Department.
    VA has expended about $1 billion per year over the last 
decade to upgrade its IT infrastructure. GAO has testified 
since 1998 that the Department has encountered numerous and 
consistent problems with managing its IT programs. The VA's FY 
2005 budget request for IT was $1.6 billion. In 2004, the VA 
received $1.4 billion for its IT program, and over the past 
decade has averaged one billion dollars each year for IT 
initiatives.
    The concept of the CIO is a relatively new idea. On 
February 10, 1996, President Clinton signed the National 
Defense Authorization Act for Fiscal Year 1996, creating Public 
Law 104-106 (P.L. 104-106). Included as Sections D and E 
respectively in P.L. 104-106 were the provisions of the Federal 
Acquisition Reform Act (FARA) of 1996, and the Information 
Technology Management Reform Act (ITMRA) of 1996. These 
provisions were renamed the Clinger-Cohen Act of 1996 in the 
fiscal year 1997 Omnibus Consolidated Appropriations Act (P.L. 
106-208). One of the main provisions of the Clinger-Cohen Act 
was the creation of a Chief Information Officer (CIO) in each 
of the federal agencies. Although each agency has its own CIO 
created with the same legislative language, the role developed 
differently in each Department.
    Under the Clinger-Cohen Act, Sections D and E of Public Law 
104-106 defines the general responsibilities of the CIO as:

        providing advice and other assistance to the head of 
        the executive agency and other senior management 
        personnel of the executive agency to ensure that 
        information technology is acquired and information 
        resources are managed of the executive agency in a 
        manner that implements the policies and procedures of 
        this division, consistent with chapter 35 of title 44, 
        United States Code, and the priorities established by 
        the head of the executive agency; developing, 
        maintaining, and facilitating the implementation of a 
        sound and integrated information technology 
        architecture for the executive agency; and promoting 
        the effective and efficient design and operation of all 
        major information resources management processes of the 
        executive agency, including improvements to work 
        processes of the executive agency.

    Despite strong encouragement of the Committee and its 
Oversight and Investigations Subcommittee over the last five 
years, despite numerous letters from individual Committee 
Members, and despite express direction from the VA Secretary in 
August 2003, to centralize and better align IT management, the 
anticipated improvements have not occurred. In 2004, VA hired 
Gartner, a Fortune 500 IT consultant, to analyze and review its 
IT infrastructure and processes. In testimony before the 
Committee in September 2005, Gartner testified that VA's IT 
budgets are very fluid without much accountability on how and 
when funding is spent. Gartner further testified that VA could 
save more than $345 million annually (over $1.7 billion over 
the next five years) by centralizing VA's IT organization 
structure.
    It has come to the Committee's attention that the 
Department and its leadership intend to implement a federated 
model as defined by the Gartner consultant and characterized by 
an IT organizational structure where technology operations, 
such as data centers and networks, are controlled by groups 
with all business applications developed and supported by each 
business line, whether medical care, pension, housing, or 
finance. The Committee believes that the federated model is 
inconsistent with the express direction of the VA Secretary in 
August 2003, as well as previous guidance from the House 
Committee on Veterans' Affairs. It is the Committee's view that 
the federated model would not optimize IT support and service 
delivery VA-wide. Therefore, the Committee directs that VA 
shall not adopt a federated model for its IT organizational 
structure. This Committee further maintains the view that VA 
efforts to date are not sufficient to facilitate the desired 
changes in IT management at the Department of Veterans Affairs 
and directs the Department to centralize its IT management.
    It is the view of the Committee on Veterans' Affairs that 
the Department of Veterans Affairs should maintain a fully-
centralized and empowered information technology management 
system, which in concert with the requirements of Clinger-Cohen 
permits the Chief Information Officer to maintain control of 
all information technology related assets in the Department. 
The Committee maintains that the sole purpose of the VA 
information technology program is to support the business and 
mission needs of the Department by assessing those needs at all 
levels of the Department to include line managers and all end 
users of the IT.
    Operational control of information technology system assets 
and personnel may be delegated by the Department Deputy Chief 
Information Officer within their respective departmental 
Administrations so long as the objectives of the Department CIO 
are met and communications and line authority are maintained. 
Although this legislation authorizes the delegation of 
operational control of information technology system assets and 
personnel within the respective Administrations, VA should not 
spend appropriated or Medical Care Collection Fund monies on 
software development and other IT initiatives without the 
knowledge of the Department Deputy CIO of their respective 
Administration, and the approval of the Department CIO.
    While this bill places all information technology personnel 
under the administrative and operational control of the 
Department Deputy CIOs for day to day operations, the Committee 
understands that emergency situations may preempt the 
prescribed line-authority and require local-level information 
technology personnel to work collaboratively with line 
personnel from their respective Administrations without the 
opportunity to coordinate emergency actions with the Department 
Deputy CIO. This emergency autonomy is encouraged to continue 
to provide mission and business support to the Administration 
in time of crisis.
    The Committee directs that any individual selected for the 
position of Department Deputy CIO shall understand information 
technology, the strategic planning process, and the business 
and mission needs of their respective Administration. The 
Committee believes that the performance of the Department 
Deputy CIO should be judged principally by the degree that IT 
enhances and yields desired mission and business outcomes for 
the respective Administrations. The Committee believes that the 
performance of the Department CIO should be based not only on 
success by all Department Deputy CIOs, but also on enhancements 
in Department-wide efficacy and successful outcomes with regard 
to achieving ``One-VA.''
    Additionally, the Committee interprets the operational 
control granted to the Department Deputy CIOs to include 
management and communication of best practices, encouragement 
and sharing of innovative ideas, development of effective and 
reasonable DoD/VA sharing opportunities, and accountability for 
all successes and failures when supporting the mission and 
business needs of the Department. The Department CIO may assert 
control over any aspect of day to day operations to facilitate 
alignment of information technology assets or personnel 
provided that the mission and business needs of the respective 
Administrations are not compromised. Differences of opinion 
that can not be resolved regarding questions of IT alignment 
and of potential impact on the mission and business needs of 
the Administration should be referred to the VA Secretary who 
will evaluate the issue based on a judgment that a high 
probability exists that the alignment course of action will 
result in a significant adverse impact within the respective 
Administration.
    To achieve the desired changes, the Committee deems it 
necessary that the Department CIO be empowered with specific 
authority over budget (resources), personnel and equipment 
(assets). HR 4061 assures the Department CIO will have 
necessary authority to align IT with the business and mission 
needs of the Department. Success, as measured by achievement 
both on VA's performance metrics Department-wide and 
Administration-wide (for each respective administration), will 
be the primary indicator of the success of the IT support 
program. The Committee recommends that the Department analyze 
the root-cause of any failure to achieve a desired performance 
measurement benchmark, especially if that benchmark is 
influenced by the IT support system. This recommendation 
extends VA-wide and is not limited to the IT strategic plan.

                      Section-by-Section Analysis

    Section 1 provides the Short Title of the bill as the 
Department of Veterans Affairs Information Technology 
Management Improvement Act.
    Section 2(a) amends Title 38, Section 310 by adding new 
subsections (c) through (h) as follows:
    Subsection (c) would require the Secretary of Veterans 
Affairs to ensure that the Department of Veterans Affairs Chief 
Information Officer has the authority and control necessary for 
the development, approval, implementation, integration and 
oversight of policies, procedures, processes, activities, and 
systems of the Department relating to the management of 
information technology for the Department, including management 
of related mission applications, information resources, 
personnel, and infrastructure.
    Subsection (d)(1) would require the Secretary of Veterans 
Affairs, through the Chief information Officer, to develop and 
maintain a process for the selection and oversight of 
information technology for the Department.
    Subsection (d)(2) would require the Secretary of Veterans 
Affairs, through the Chief information Officer, to develop an 
information technology strategic plan that includes performance 
measures and an integrated enterprise architecture.
    Subsection (d)(3) would require that the information 
technology strategic plan set forth a multiyear plan for the 
use of information technology and related resources to 
accomplish the Department's mission.
    Subsection (d)(4) would require that the Chief Information 
Officer shall review and update the strategic plan and 
integrated enterprise architecture on an ongoing basis in order 
to maintain currency with technological changes, and changing 
mission needs of the Department.
    Subsection (e)(1) would mandate that funds for information 
technology be obligated in accordance with the process for the 
selection and oversight of information technology as set forth 
in Subsection (d)(1).
    Subsection (e)(2)(A) would require that amounts 
appropriated for the Department for any fiscal year that are 
available for information technology shall be allocated 
consistent with annual appropriations acts.
    Subsection (e)(2)(B) would require that the Secretary 
approve, after notifying the Under Secretary of Health, the 
allocation of any funding provided for through the annual 
appropriations process that is inconsistent with the allocation 
method known as the Veterans Equitable Resource Allocation.
    Subsection (e)(3) would require that the Secretary to 
submit a report to Congress that identifies amounts requested 
for information technology for the Department when the budget 
for any fiscal year is submitted by the President to Congress 
under Title 31, Section 1105; further, the subsection would 
require the report set forth those amounts both for each 
Administration within the Department and for the Department 
aggregate and shall identify, for each such amount, how that 
amount is aligned with and supports information technology 
strategic plan under Subsection (d).
    Subsection (f)(1) through Subsection (f)(5) would require 
the Department of Veterans Affairs Chief Information Officer to 
select a Chief Information Officer for each of the Veterans 
Health Administration, the Veterans Benefits Administration, 
and the National Cemetery Administration. Each Administration 
Chief Information Officer selected would be designated as a 
Department Deputy Chief Information Officer, and would report 
directly to the Department of Veterans Affairs Chief 
Information Officer. Each Department Deputy Chief Information 
Officer would be responsible for implementing in their 
respective Administrations, as directed by the Department Chief 
Information Officer, the information technology strategic plan 
and the integrated enterprise architecture developed pursuant 
to Subsection (d)(2). To accomplish the policies, programmatic 
goals, information technology system acquisitions and 
alignments prescribed or directed by the Department Chief 
Information Officer, each Department Deputy Chief Information 
Officer would maintain operational control of all information 
technology system assets and personnel necessary, including 
direct management of the administrations software and 
applications development activities. The Department Deputy 
Chief Information Officer would be the principal advocate for 
the information technology needs of their respective 
Administrations and assure, by coordinating with the Department 
Chief Information Officer, that the business and mission needs 
of their respective Administrations are met by considering 
requirements at all levels, from top level managers to end-
users across the entire system.
    Subsection (g)(1) would require the Secretary to ensure 
that the annual report submitted by the Secretary pursuant to 
Title 40 Section 11313 includes identification of any 
obligation approved by the Chief Information Officer under 
Subsection (e)(1) above, including date, amount and purpose of 
each obligation.
    Subsection (g)(2) would require that the Secretary submit 
to the Committees on Veterans' Affairs of the Senate and the 
House of Representatives an annual report that provides the 
Secretary's assessment of the implementation during the year 
covered by the report of the provisions of Subsections (c), (d) 
and (e). Each report would include the assessment of the 
Secretary as to the increased efficiency within the Department 
of information technology acquisition processes, management, 
responsibility, and accountability, and the estimated cost 
savings to the Department as a result of those provisions.
    Subsection (h) cites that the definition of information 
technology has the meaning given that term in Title 40, Section 
11101, Paragraph 6.
    Section (2)(b) would require regular reports to Congress 
from the Department of Veterans Affairs on the status of 
implementation of the Act at predetermined intervals, as well 
as require a final report once the Act is fully implemented.

                    Performance Goals and Objectives

    The reported bill would improve the management of 
information technology within the Department of Veterans 
Affairs by providing the Chief Information Officer the 
authority over resources, budget, and personnel related to the 
support function of information technology to support the 
business and mission needs of the Department. The Secretary of 
Veterans Affairs, through the Chief information Officer would 
be required to develop an information technology strategic plan 
that includes performance measures and an integrated enterprise 
architecture. The Chief Information Officer would be required 
to review and update the information technology strategic plan 
and enterprise architecture on an ongoing basis in order to 
maintain currency with technological changes, and changing 
mission needs of the Department. The performance of the CIO and 
Deputy CIOs would be assessed based on the degree that 
information technology advances the mission and business goals 
of the Department and its Administrations as determined using 
the strategic plan and the performance measurement system of VA 
and the Administrations.

             Statements of the Views of the Administration


   statement of gordon h. mansfield, deputy secretary, department of 
veterans affairs before the committee on veterans' affairs, u.s. house 
                 of representatives, september 14, 2005


    For at least 25 years prior to 1990, VA's IT program was 
centralized. VA was elevated to cabinet level in 1988, and in 
FY 1989 the VA IT organization was led by an Assistant 
Secretary for Information Resources Management. In July 1990, 
under a belief that decentralized operations provide for better 
management of VA facilities, the Department decentralized 
resources to the Administrations and staff offices for VA's IT 
systems design and applications development, systems 
operations, and systems oversight, along with four data 
processing centers. The remaining IT oversight program was 
placed under the Chief Financial Officer (CFO). Then, in 
accordance with the Clinger-Cohen Act of 1996, VA formally 
established the position of Assistant Secretary for Information 
and Technology (CIO), but the IT oversight program remained 
aligned under the CFO and decentralization of VA's IT program 
continued.
    At his confirmation hearing in January 2001, Secretary-
designee Principi stated that he was committed to ending 
stovepiped systems in VA. Secretary Principi directed the 
centralization of the Department's IT program, including 
authority over personnel and funding, in the Office of the 
Assistant Secretary for Information Technology effective 
October 1, 2002. A team of executives from across VA was 
convened to design a centralized IT organization for VA. The 
Secretary approved a centralized reorganization plan on May 14, 
2003. The reorganization involved the immediate detail and 
eventual permanent reassignment of 97 employees from the 
Administrations in the areas of telecommunications support and 
cyber security (field VISN level ISOs). The Administration 
level chief information officers were renamed as Deputy CIO's 
and designated as being ``dual hatted,'' meaning they would 
take their technical direction from the CIO but remain 
employees of their existing parent organizations and take their 
business direction from the Administration in which they 
resided.
    The result of this reorganization was a matrix organization 
which, over time, VA came to realize was not best suited for a 
large, geographically dispersed organization that is highly 
dependent on information technology to deliver services. VA is 
in the final phase of rebuilding its nationwide 
telecommunications infrastructure, beginning the consolidation 
of some infrastructure assets, and implementing aggressive 
cyber security and privacy programs to ensure the protection of 
our infrastructure and veterans' personal information. VA 
submitted its VA Enterprise Architecture design to OMB in June 
2005 and received a score of 3.0, significantly higher than the 
previous score of 1.25.
    A strong Enterprise Architecture is critical to any effort 
to bring down our stovepiped systems and replace them with 
integrated systems. The score of 3.0 is significant progress in 
this information technology area and signals that we are 
steadfastly working to build a foundation for systems 
integration and standardization. In the wake of the 
difficulties with CoreFLS, the Assistant Secretary for 
Information Technology McFarland to undertook a study of our IT 
system and pursued outside assistance. In December 2004 VA 
contracted with The Gartner Group to conduct an Organizational 
Assessment of VA IT.
    This assessment was to enhance the effectiveness of VA's IT 
by first baselining how it operates today, then developing 
organizational models that increase VA's IT value (in terms of 
greater efficiencies, economies of scale, and added business 
value), and finally, charting the path VA IT can follow to 
deploy its new organizational model to truly deliver value. The 
completed assessment was delivered to the Assistant Secretary 
for Information and Technology in May 2005. A decision is 
forthcoming. The next step will be to systematically and 
methodically plan, organize, and transition to the new 
organization.
    The study proposed five different alternatives, as follows:
    Option 1--Status quo. Currently, VA IT resources are 
operated and managed within a highly decentralized management 
structure. The Department's CIO manages a central office staff 
of approximately 350 government employees and a direct budget 
of approximately $50M per year. While the CIO is charged with 
overall responsibility for the successful management of all VA 
IT resources (in FY05, $1.6B and approximately 5400 IT FTE) the 
CIO has no direct management control or organizational 
authority over any of these resources. The CIO provides policy 
guidance, budgetary review and general oversight via indirect 
supervision (dotted line) of the Administration and staff 
office CIO's. Within some of the Administrations, the CIO does 
not directly supervise or have authority over the majority of 
IT resources in the field and must also provide policy 
guidance, budgetary review and general oversight via indirect 
supervision.
    Option 2--Regional Option. Under this option, VA would be 
divided into three to five geographically based subdivisions. 
Within each of these, a Deputy CIO would control all IT assets 
(Operations, Staff Functions, and Systems Development) and be 
responsible for all service delivery within that region. These 
Deputy CIO's would report directly to the VA CIO.
    Option 3--Administration-Centric Option. Under this option, 
VA would be divided by Administration and Staff Offices and a 
Deputy CIO for each would control all IT assets (Operations, 
Staff Functions, and Systems Development) and be responsible 
for all service delivery within that Administration or Staff 
Office. These Deputy CIO's would report directly to the VA CIO.
    Option 4--Federated Option. Under this option, VA would 
separate operational responsibilities and IT systems 
development responsibilities into separate domains. All IT 
operational service delivery personnel and the budget 
associated with their support (to include all non-medical IT 
equipment, maintenance, and contractor support) would come 
under the direct supervision of a national organization that 
reports directly to the CIO's office. This organization would 
be charged with delivering all IT-related operational services 
to all elements of VA based upon a negotiated and formally 
agreed upon set of specific standard IT services delivered 
according to a clearly understood and documented set of 
service-level-agreement standards. Under a federated approach, 
IT systems development responsibility remains with the 
Administrations or staff office business units. The 
Administrations and staff offices directly manage all systems-
development FTE and budget authority. The CIO clearly maintains 
overall responsibility for the successful management of these 
resources and continues to provide IT budget oversight, policy, 
and program management direction for the Department.
    Option 5--Centralized Option. Under this option, all VA IT 
personnel resources, assets, and budget would be under the 
direct supervision of the VA's CIO. This centralized IT 
organization would be charged with delivering all IT-related 
operational and systems development services to all elements of 
the VA based upon a negotiated and formally agreed upon set of 
specific standard IT services and systems development standards 
delivered according to a clearly understood and documented set 
of service level agreement standards. Under this option the 
Administrations remain responsible for system and user 
requirements definition, service delivery standards 
development, and end user participation in systems development 
acceptance criteria development and testing.
    The organizational assessment is one tool we are using to 
decide how to improve our IT programs. VA is determined to move 
forward and implement the changes necessary for a world-class 
IT program that increases efficiencies and performance. From 
better utilization of resources, any savings can be reinvested 
in direct services to veterans.

               Congressional Budget Office Cost Estimate

                       Congressional Budget Office,
                                             U.S. Congress,
                                  Washington, DC, October 26, 2005.
Hon. Steve Buyer,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4061, the 
Department of Veterans Affairs Information Technology 
Management Improvement Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Michelle S. 
Patterson.
            Sincerely,
                                           Donald B. Marron
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 4061--Department of Veterans Affairs Information Technology 
        Management Improvement Act of 2005

    H.R. 4061 Would direct the Secretary of the Department of 
Veterans Affairs (VA) to ensure that the department's Chief 
Information Officer (CIO) has the authority to control the 
policy and procedures related to information technology (IT) 
throughout the department. The bill would direct the Secretary, 
acting through the CIO, to develop and implement a process for 
the selection and oversight of IT systems within VA, and to 
develop a strategic plan for IT systems that includes an 
integrated enterprise architecture. Finally, the bill would 
specify that funds appropriated to the department for IT be 
obligated according to plans and processes established by the 
CIO and would direct the Secretary of VA to submit periodic 
progress reports to the Congress on the implementation of the 
requirements set forth in this legislation.
    VA currently has decentralized system of IT development and 
management. Each of the three organizations within VA--the 
Veterans Health Administration (VHA), the Veterans Benefits 
Administration (VBA), and the National Cemetery Administration 
(NCA)--develops and manages its own IT functions, with much of 
the development and maintenance occurring at the local or 
regional levels. According to VA, the department recently 
decided to change its IT system so that the CIO will gain 
control over much of the IT budget and other resources but VHA, 
VBA, and NCA will still control software development and 
management. VA indicates it has yet to determine the costs 
associated with implementing this new model.
    H.R. 4061 would require VA to adopt a more centralized 
approach that would give the CIO authority over almost all IT-
related functions. Based on information provided by VA, CBO 
expects it would likely cost several hundred million dollars to 
implement either model of IT management within the department. 
However, because VA has not yet determined exactly how it would 
implement its planned new approach to IT management, or what it 
would cost, CBO has no basis for estimating whether the 
centralized approach required under the bill would be more or 
less costly to implement than VA's current plans.
    H.R. 4061 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact is Michelle S. Patterson. This 
estimate was approved by Robert Sunshine, Assistant Director 
for Budget Analysis.

                     Statement of Federal Mandates

    The preceding Congressional Budget Office cost estimate 
states that the bill contains no intergovernmental or private 
sector mandates as defined in the Unfunded Mandates Reform Act.

                 Statement of Constitutional Authority

    Pursuant to Article I, section 8 of the United States 
Constitution, the reported bill is authorized by Congress' 
power to `provide for the common Defense and general Welfare of 
the United States.'

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

              SECTION 310 OF TITLE 38, UNITED STATES CODE

Sec. 310. Chief Information Officer

  (a)  * * *

           *       *       *       *       *       *       *

  (c) To support the economical, efficient, and effective 
execution of the information technology objectives, policies, 
and plans of the Department in support of Department goals, the 
Secretary shall ensure that the Chief Information Officer has 
the authority and control necessary for the development, 
approval, implementation, integration, and oversight of 
policies, procedures, processes, activities, and systems of the 
Department relating to the management of information technology 
for the Department, including the management of all related 
mission applications, information resources, personnel, and 
infrastructure.
  (d)(1) The Secretary, acting through the Chief Information 
Officer, shall develop, implement, and maintain a process for 
the selection and oversight of information technology for the 
Department.
  (2) As components of the development of the process required 
by paragraph (1), the Secretary shall develop for the 
Department--
          (A) an information technology strategic plan that 
        includes performance measurements; and
          (B) an integrated enterprise architecture.
  (3) The information technology strategic plan shall set forth 
a multiyear plan for the use of information technology and 
related resources to support the accomplishment of the 
Department's mission.
  (4) The Chief Information Officer shall review and update the 
information technology strategic plan and the integrated 
enterprise architecture on an ongoing basis to maintain the 
currency of the plan and the currency of the enterprise 
architecture with technological changes and changing mission 
needs of the Department.
  (e)(1) Funds may be obligated for information technology for 
the Department only in accordance with the process implemented 
under paragraph (1) or as otherwise specifically authorized or 
delegated by the Chief Information Officer or as otherwise 
directed by the Secretary.
  (2)(A) Amounts appropriated for the Department for any fiscal 
year that are available for information technology shall be 
allocated within the Department, consistent with the provisions 
of appropriations Acts, in such manner as may be specified by, 
or approved by, the Chief Information Officer.
  (B) If for any fiscal year amounts referred to in 
subparagraph (A) that are available for the Veterans Health 
Administration (or are otherwise available for functions 
relating to medical care) are to be allocated under 
subparagraph (A) in a manner that is inconsistent with the 
allocation method known as the Veterans Equitable Resource 
Allocation, such allocation may be made only with the approval 
of the Secretary and after the Under Secretary for Health is 
notified.
  (3) When the budget for any fiscal year is submitted by the 
President to Congress under section 1105 of title 31, the 
Secretary shall submit to Congress a report that identifies 
amounts requested for information technology for the 
Department. The report shall set forth those amounts both for 
each Administration within the Department and for the 
Department in the aggregate and shall identify, for each such 
amount, how that amount is aligned with and supports the 
information technology strategic plan under subsection (d), as 
then in effect.
  (f)(1) The Chief Information Officer shall select the Chief 
Information Officer for each of the Veterans Health 
Administration, the Veterans Benefits Administration, and the 
National Cemetery Administration. Any such selection may only 
be made after consultation with the Under Secretary with 
responsibility for the Administration for which the selection 
is to be made.
  (2) Each Administration Chief Information Officer selected 
under paragraph (1)--
          (A) shall be designated as a Department Deputy Chief 
        Information Officer; and
          (B) shall report to the Department Chief Information 
        Officer.
  (3) The Department Deputy Chief Information Officers are 
responsible for implementing in their respective 
Administrations, as directed by the Department Chief 
Information Officer, the information technology strategic plan 
and the integrated enterprise architecture developed for the 
Department by the Department Chief Information Officer pursuant 
to subsection (d)(2).
  (4) To accomplish the policies, programmatic goals, 
information technology system acquisitions, and alignments 
prescribed, authorized, or directed by the Department Chief 
Information Officer, each Department Deputy Chief Information 
Officer shall maintain, for their respective Administrations, 
operational control of all information technology system assets 
and personnel necessary, including direct management of the 
Administration's software and applications development 
activities.
  (5) The Department Deputy Chief Information Officers--
          (A) shall be the principal advocate for the 
        information technology needs of their respective 
        Administrations; and
          (B) shall assure, by coordinating with the Department 
        Chief Information Officer, that the business and 
        mission needs of their respective Administrations are 
        met by considering requirements at all levels.
  (g)(1) The Secretary shall ensure that the annual report 
submitted by the Secretary pursuant to section 11313 of title 
40 includes an identification of any obligation approved by the 
Chief Information Officer under subsection (e)(1), including 
the date, amount, and purpose of such obligation.
  (2) The Secretary shall submit to the Committees on Veterans' 
Affairs of the Senate and House of Representatives an annual 
report, not later than March 1 of each year (beginning in 
2009), providing the Secretary's assessment of the 
implementation during the year covered by the report of the 
provisions of subsections (c), (d), and (e). Each such report 
shall include--
          (A) the assessment of the Secretary as to increased 
        efficiency within the Department of information 
        technology acquisition processes, management, 
        responsibility, and accountability as a result of those 
        provisions; and
          (B) estimated cost savings to the Department as a 
        result of those provisions.
  (h) In this section, the term ``information technology'' has 
the meaning given that term in paragraph (6) of section 11101 
of title 40.