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Congressional Updates

Both chambers of Congress were in session this week.

On Friday, November 18 the President signed Public Law (P.L.) 112-55, a “minibus” measure to fund the Departments of Agriculture, Commerce, Housing and Urban Development (HUD), Justice, and Transportation for the balance of FY 2012. This law also contained a third continuing resolution (CR) to keep the rest of the federal government running until December 16. The House passed the measure by a vote of 298-121. Then, the Senate approved the bill by a vote of 70-30.

On the heels of the enactment of this first minibus, a second package of stalled appropriations measures is being prepared for passage. The basis for this second minibus is H.R. 2354, the FY 2012 spending measure for the Department of Energy and Water Projects. Included in this next spending package will be the Department of State and Foreign Operations, as well as Financial Services – which includes funding for the Treasury Department, the Executive Office of the President, the District of Columbia, and various independent agencies, including the Selective Service System. A schedule of action on this measure is not known.

LEGISLATIVE FOCUS FOR THE WEEK: President Enacts “VOW to Hire Heroes Act.”
On Monday, November 21 President Obama signed P.L. 112-56, the “VOW to Hire Heroes Act of 2011.” The measure passed the Senate on November 10 by a 95-0 vote, while the House on November 16 agreed to the amended bill by a vote of 422-0.

The “VOW to Hire Heroes Act” will boost employment opportunities for the one million unemployed veterans in this country. The unemployment rate for about a quarter-million veterans who have returned from Iraq and Afghanistan stands at 12.1 percent. Of the estimated one million jobless veterans in America, two-thirds of them fall within the 35-64 age group.

Key provisions of P.L. 112-56 include:
• Tax credit of up to $5,600 for businesses hiring veterans who have been looking for a job for more than six months, as well as a $2,400 credit for veterans who are unemployed for more than four weeks, but less than six months.
• Tax credit of up to $9,600 for businesses hiring veterans with service-connected disabilities who have been looking for a job for more than six months.
• Making the Transition Assistance Program (TAP) — an interagency workshop coordinated by the Departments of Defense, Labor and Veterans Affairs — mandatory for service members moving on to civilian life to help them secure meaningful jobs through resume-writing workshops and career counseling.
• Expanding education and training opportunities for older veterans by providing 100,000 unemployed veterans of past eras and wars with up to one year of additional Montgomery GI Bill benefits for education or training programs at community colleges and technical schools.
• Providing disabled veterans up to one year of additional vocational rehabilitation and employment benefits.
• Allowing service members to start looking for federal jobs before separating from active duty in order to facilitate a truly seamless transition from the military to jobs at federal agencies.

Senate Veterans Panel Examines VA Mental Health Missteps

The Senate Veterans’ Affairs Committee held a hearing on Wednesday, November 30 addressing wait times for mental health care in the VA system. The hearing was a follow up to a previous hearing conducted by the committee on July 14th addressing issues with mental health care.

At the previous hearing Chairman Patty Murray (WA) had requested a survey of the VA health care system by the Inspector General's (IG) office, the results of which raised troubling concerns. Statistics from the report stated:
• 40 percent of providers could not schedule appointments for their patients within VA timeliness guidelines;
• 70 percent of locations lacked adequate mental health staff; and,
• 46 percent of locations cited a lack of off hours appointments affecting adequate veteran access to care.
Ranking Member Richard Burr (NC) called the state of affairs "unacceptable" and demanded VA account for what they had done with the money provided for them, a 126 percent increase in budget over 2006 figures.

The first panel consisted of Dr. Michelle Washington, PTSD Coordinator from VA's Wilmington, DE location. In addition, representatives of concerned third party groups such as John Roberts, Executive Vice President of the Wounded Warrior Project and Dr. Barbara Van Dahlen of the charitable "Give an Hour" organization that coordinates donated time from mental health care providers for OIF/OEF/OND veterans were also present.

Whether VA insiders – such as Dr. Washington – or outsiders such as the other panelists, all painted a picture of an understaffed VA that could not meet appointment needs for basic treatments. Despite robust cooperation from DOD with Give an Hour, Dr. Van Dahlen indicated VA had been more distant on a national level although individual locations had found partnership locally with their organization to meet veterans’ needs. Consistently the number one problem seemed to be lack of timely access to provider appointments, critical to effective PTSD treatment.

VA's own response in the second panel indicated they had increased mental health staffing by over 50 percent since 2006 and that the procedures in place should not allow the problems described to occur. Sen. Burr recognized the key disconnect between what is written policy as prescribed by Central Office and what is able to be implemented in the field. All of the committee members expressed frustration with the standard response to problems seeming to be task forces for study rather than directly implemented fixes.

VA firmly stated agreement that the described problems were totally unacceptable and insisted they were in fact working to solve the issues. Stating their belief that they were not seeing the necessary results, Sens. Murray and Burr concurred in their commitment to continued oversight and committed to continuing to press VA with hard questions on the matter of mental health.

House Subpanel Examines Ways Institutions Can Streamline Costs, Reduce Tuition

On Wednesday, November 30 Legislative Division staff attended a hearing held by the House Education and Workforce Subcommittee on Higher Education and Workforce Training. The hearing was entitled, “Keeping College Within Reach: Discussing Ways Institutions Can Streamline Costs and Reduce Tuition.”

Ms. Wellman, Executive Director of the Delta Cost Project focused on five major points. The first was in recent years, enrollment in public institutions and community colleges has increased dramatically with little increase in funding, while endowment have increased substantially to private research universities, though enrollment modest. The second was tuition continues to rise faster than spending or costs. The reason she stated for this was that state/local appropriations are declining in the wake of state budget crises, and that gifts and endowments have declined as well. The schools raise tuitions in order to close the gap created by these phenomena.

The third issue she addressed was spending over time. This refers to the fact that institutions are decreasing their spending strategically, cutting spending in administration and maintenance, while protecting spending for instruction and student services, rather than cutting spending across the board. It is unsure whether this is sustainable over the long term, as in the past, revenues have returned relatively quickly. Fourth, she discussed factors driving up spending, particularly employee benefits, particularly health care packages. She stated that in order to make the largest impact, institutions need to re-evaluate their health care spending, while also examining other areas of potential increased efficiency as well.

Finally, and more positively, she addressed a change in instructional productivity. This trend essentially means that more degrees per enrollment are being produced, leading to an increased efficiency of each credit. However, she pointed out that it is uncertain whether this data reflects decreased attrition or an increase in excess credits not required for the degree.

Dr. Manahan, President of Grace College & Seminary highlighted some of the cost-saving measures his institution has implemented in order to keep tuition low while maintaining the quality of the education produced. Among these was included a three-year degree option, in which students may opt into an accelerated course of study, attaining a four-year degree in three years. This saves students who opt-in over $30,000 in the course of obtaining a degree. By re-imagining the school calendar, Grace College and Seminary was able to reduce tuition costs to students.

Next, Mr. Merisotis, President of the Lumina Foundation began by outlining the problem, and suggesting that in order to remain competitive with the rest or the world, the U.S. will need to increase the percentage of Americans with post-secondary education from the current 40 percent to 60 percent. He then advocated for increased productivity in the higher education system by fundamentally rethinking how higher education is delivered. He pointed to a recent Lumina report entitled Four Steps to Finishing First. The report advocates four measures: increasing performance funding (that is, providing funding to institutions which perform best in graduating/certifying students); initiating student incentives ((rewarding students for outstanding academic performance through tuition credit); the introduction of new modes of delivering material to be learned (such as online); and, the introduction of businesses efficiencies into the administration of higher education.

Finally, Mr. Foster, President of Colorado Mesa University, much in the fashion of Dr. Manahan, testified as to various methods which have been implemented at his institution in order to reduce tuition costs. One of these measures was to eliminate Dean positions, at a savings of $500,000 per year. Mr. Foster noted that one of the difficulties for colleges was the onerous burden of keeping up with the immense amount of paperwork necessary to remain compliant with government regulations.

House VA Joint Hearing on Disabled Veteran-Owned Small Business Certification Process

On November 30, Legislative staff attended a joint hearing of the House Veterans Affairs Subcommittees on Economic Opportunity (EO) and Oversight and Investigations (O&I). The focus of the hearing were two topics: (1) the VA's misinterpretation of a law that requires service-disabled veteran-owned small businesses (SDVOSBs) and veteran-owned small businesses (VOSBs) to receive priority in all of its contract awards, and (2) a process used by the VA to verify veteran-owned small businesses so that they can bid on contracts set aside by the agency. In other words, getting contracts is only half the battle facing veterans-owned businesses. The other, equally large problem, is certifying the ownership and operational control of a company. This hearing was a follow-up to one held earlier this year on the same topic.

In regard to the first topic, House members questioned recent actions taken by the VA’s Senior Procurement Executive in response to the recent Government Accountability Office (GAO) Aldevra decision, which states that VA should make efforts to contract with veteran-owned small businesses when feasible, and in accordance with the Veterans First contracting program. GAO recently upheld a bid protest filed by the Aldevra business on a VA contract, and recommended that the VA re-bid that contract. Despite clear legislative and committee report language outlining the intent of the Veterans First contracting program, VA decided that GAO’s decision would not apply to its contracting operations and that it would continue as it pleased, in effect doing away with preference for VOSBs and SDVOSBs in much of its contracting – claiming the requirement did not apply to acquisitions made under the General Service Administration's contract schedules.

In a written statement for the record, disabled Navy veteran Bob Hesser, owner of Vetrepreneur, a Virginia-based small business, said the veterans-first policy looks like “vets last” to many small businesses looking for contracts from VA. Both business owners and VA contracting personnel find the “convoluted” priority list hard to understand, wrote Hesser. If VA needs something, the top priority is to search its current inventory, followed by looking in the inventory of other agencies. The third priority is buying from Federal Prison Industries, fourth is buying from blind or severely disabled people who may or may not be veterans, fifth is purchasing from wholesale suppliers, sixth is buying from mandatory federal supply schedules and seventh is buying from optional federal supply schedules. “Finally, we arrive to the bottom, last category on the VA purchasing priority list — commercial sources and open market,” Hesser said. As such, veteran-owned businesses rank eighth in priority for government contracts despite laws and regulations that are supposed to put veterans first.

"Please tell us how the VA considers itself exempt from the requirements? The federal government can't be sued for not meeting its goals [to set aside contracts], but it can be sued for not adhering the law, and that is what this committee is concerned about," said Rep. Bill Johnson (OH), chairman of the Subcommittee on Oversight and Investigations. "Obviously there is great disagreement with the VA's interpretation [of the law]. The GAO disagrees; I disagree. You've been told that your interpretation is wrong."

Tom Leney, executive director of VA's Small and Veteran Business Programs, explained the agency's decision to disregard the GAO recommendations by saying that "whenever [VA] limits competition via set asides, we run the risk of increasing the cost to government." He also emphasized how the agency is more than exceeding the goals set for it by Congress:

The Vet First program under P.L. 109-461 enables VA to provide preference to Service Disabled Veteran Owned Small Businesses (SDVOSB) and Veteran Owned Small Businesses (VOSB). VA has used this program aggressively and leads the federal government in contracting with service-disabled Veteran-owned small businesses (SDVOSBs). VA is also the only agency with specific authority to contract with all VOSBs, regardless of service-disability. In Fiscal Year 2011, VA awarded more than $3 billion in contracts to both categories, out of our contracting base of $15.5 billion. P.L. 109-461 enabled VA to far exceed its procurement goals of 10 percent for SDVOSBs and 12 percent for VOSBs, by reaching nearly 20 percent and nearly 22 percent respectively.

That is real money in the hands of veterans and their small businesses, and it establishes VA as a leader in this area. At the same time, VA has actively implemented statutory provisions to ensure the Public Law 109-461 procurement eligibility goes only to legitimate SDVOSBs and VOSBs. We are carrying out the direction of Congress to verify such firms, and to ensure that only those firms whose business models meet the criteria laid out in P.L. 109-461 gain the benefits of the preferences it provides. We have also moved aggressively against the relatively small number of firms who would misrepresent their status in order to obtain illegitimate benefit.

The VA's Deputy General Counsel Jack Thompson noted that the GAO recommendations are "just that to federal agencies – recommendations," but confirmed that the issue is still being discussed internally within the Executive Branch.

“VA has made it clear in correspondence and meetings following the Aldevra decision that it has no intention of attempting to clear up its own questions about Veterans First,” stated Rep. Johnson in response. “Despite acknowledging a problem, VA is not trying to solve the problem, nor did it even ask Congress or this Committee those questions that needed to be answered years ago. Instead, VA is determined to run this through the court system, eliminating key opportunities for VOSBs to contract with the federal government. When VA cannot, or chooses not, to implement clearly written legislation, we have a problem.”

In regard to the second topic, members of the subcommittees also questioned Leney about claims from veterans that they were wrongly denied verification, because of decisions by the VA that they did not maintain 100 percent control of their businesses, despite ownership of at least 51 percent. As noted by Leney, more than 90 percent of denials for verification were the function of business control, as defined by the VA, while less than 5 percent related to questions about ownership.

"Are [the rules] too rigorous? You're telling me these are real veterans getting thrown out" out of the program, said Rep. Tim Walz (MN). "If they have the capability, why are they getting thrown out?" Added EO Subcommittee Chairman Marlin Stuzman (IN), "Our veteran businesses are having to scrap. They shouldn't be the ones having to fight so hard."

Leney said the process was very slow in the beginning, lasting an average of 127 days, but has been cut to an average of 75 days now. But speed may not make everyone happy; in the past two months, 60 percent of companies denied certification as veteran-owned businesses have appealed, he said, requiring a shifting of resources.

“We need to get this right,” said Rep. Johnson. The certification process needs to be efficient, and approved businesses must be “able to compete for the appropriate contracts. Otherwise, there is no point in having these businesses in the system if VA is going to ignore them.”

For some businesses, delays are causing major problems, said Rep. Stutzman. He said he and his staff are hearing “with increasing frequency” from legitimate veteran-owned businesses that “are having an extremely difficult time being validated. Several have even had to close down as a result.”

Leney confirmed that there are conflicting perspectives about the policies in place for verifying companies, and that the "nature of the rules is such that it does make it difficult sometimes for a veteran to do business like he or she would like and still meet the requirements…I've been focused on making sure we communicate, and implement the policy that exists —rather than focusing on how to change that policy," Leney added. "But there are those that would argue the policy should change, and there are also those that would argue it shouldn't."

Letters of Support

On November 22, The American Legion sent a letter to Rep. Scott Tipton (CO), thanking him for the introduction of H.R. 2815, entitled the “Blue Star Mothers’ Act.” If enacted, this bill would update the congressional charter of the Blue Star Mothers of America. This measure would redefine the charter’s definition of “mothers” as well as remove references to specific conflicts. The bill also includes provisions to expand membership to U.S. citizens living outside the U.S.

Also on November 22, our organization sent a letter to Rep. Jeff Denham (CA), thanking him for introducing H.R. 3245, entitled the “Efficient Service for Veterans Act.” This legislation will enable communications between Vet Centers and the rest of the VA health care records system as well as DOD personnel records and drastically improve the ability of the Centers to serve the psychological needs of the veterans’ community.

On November 30, The American Legion sent letters to the House and Senate leadership and every member of the Senate Veterans Affairs Committee. This letter outlined The American Legion’s position on over 300 amendments that had been offered to S. 1867, the “National Defense Authorization Act for Fiscal Year 2012.” Our position of support (or not) was based on a careful review of the proposed language within the amendment and resolutions of The American Legion.

On December 1, our organization sent a letter to Rep. John Garamendi (CA), offering support for his draft legislation to amend Title 38, USC, to clarify the responsibilities of small businesses with respect to the employment and re-employment rights of veterans. If enacted, the bill would redefine the term “undue hardship” to protect only small businesses which may experience difficulties in re-employing a returning veteran to the workforce.