finally, the partnership between va and dod extends further to provide a combined collaborative approach to amputation care by developing a shared amputation rehabilitation clinical practice guideline for care following lower limb amputation. va is also supporting the department of defense by collaborating on the establishment of the extremity trauma and amputation center of excellence. the mission of this center is clinical care, including outreach, education and research, and is designed to be a lead organization for direction and oversight in each of these areas. the center is currently being implemented and will obtain initial operating capacity by the end of this fiscal year. in summary, va supports high quality amputation and prosthetics care by supporting groundbreaking research into new technologies, training a highly

qualified cadre of staff and pursuing accreditation of all eligible prosthetic laboratories in va's amputation system of care. we are improving our oversight and management of prosthetics purchasing and inventory management to better utilize resources that we have been appropriated by congress and to serve america's veterans. we appreciate the opportunity to appear before you today to discuss this important program. my colleagues and i are prepared to answer your questions. thank you. >> thank you, dr. beck. for your testimony and for being here today. i have a number of questions. a lot of it is based on what we heard from the three previous panels, especially the veterans and the veterans service organizations. i think they provide for us a reliable source of information and they identify needs for us.

my first question is, what was the impetus behind the change, you heard the concern from the previous panels. what was the impetus behind the change in the procurement policy and did you consult with the veterans service organizations and/or veterans? who did you talk to to make this change? >> the impetus for the change is an impetus from the department to assure compliance with federal acquisition regulations. i have with me mr. norbert doyle, who is vha's chief procurement logistics officer today. we were anticipating some of these questions, and he's available to provide more information about the change and what's happening. >> just if you would, before you start, so does that mean heretofore, the va was not compliant, if that's the basis of your change that compliance was an issue, maybe you could make that clear to us. >> yes, ma'am.

thank you, dr. beck. ma'am, yes, the impetus was to include contracting to bring vha and all the other va contracting organizations in better alignment with the federal acquisition regulations. we also, it's my understanding the department recognized several years ago actually that they were weak in certain areas, in contract administration and awarding of contracts, and this was also to bring it in house to ensure proper stewardship of the government dollars. in reference your question did we talk with veteran service organizations, actually, i don't believe we did before we started the process. however, last week, and i'm happy to meet with any organization to discuss what we're doing, i heard the complaints of the veterans service organizations that they feel out of the loop, i met last week with dr. beck with the secretary's advisory committee on prosthetics and special

disabilities. we spent a great deal of time with them and i think that group has representative from many veterans service organizations, to address their concerns that they may have. again, i make that offer that i will be happy to meet with any group to discuss these. >> thank you. i think it would be in the best interest as we go forward to do what's best for our veterans and to hear from the veterans service organizations and from the veterans themselves, and from those who have gone through this process who understand intimately, as did the first two panelists, that it would seem very basic to talk with them and to have them identify needs and concerns. you heard wounded warriors say, we're asking you, congress, to please freeze this change until and the other point i wanted to bring up was the pilot. you heard paralyzed veterans, their organization mentioned a pilot.

have you done a pilot? if so, what were the findings, does that -- is that the justification for this change? >> yes, ma'am. i actually have a number of issues to address along this line. first, to put it in context and, granted, we're talking about the more expensive items that we're talking about today, the transfer of the contracting authority from prosthetics to contracting only impacts those procurements above $3,000, which is the mandated federal acquisition -- or federal micro purchase threshold. so only 3% of orders that we estimate fall in that realm so 97% of prosthetic orders will stay with prosthetics. as i said, we are doing this to bring us more in line with federal acquisition regulations and also to address many of the issues that the i.g. has mentioned, although those were identified i think previously. i want to assure everybody that if a clinician specifies a specific product for a veteran, contracting will get that

product for that individual. i do not, as the chief -- as the chief contracting person in the veterans health administration, i do not want my contracting officers making a decision as to what goes in the veteran's body or gets appended to it. that is clearly a clinician decision. how are we going to get that product that the clinician specifies for the veteran? we're going to do it under the auspices of the federal acquisition regulations who are going to cite the authorities of 8123, which is one individual mentioned that the broad latitude given by congress to the veteran -- to the veterans administration. we're going to do that by properly preparing justification and approvals for sole source, citing in paragraph four the authorities granted under 8123. there are seven exceptions in part six to full and open competition, exception five is the one that as authorized by

statute and that's what we will use. we have gone through great pains to ensure success in this transfer. a little bit of history, even starting last summer, when we started this process under the direction of the department, dr. beck's and my folks, we formed a team and that team included field personnel, both prosthetics and contracting, which we thought was critical. they developed a plan on the -- for the transfer. it was a very detailed plan. the plan actually as we got into it got more detailed as we went, as we identified other issues. we then worked with our union partners to ensure that they did not have issues and that we could proceed successfully. there were pilots as part of the plan which is probably the best part, other than bringing field people in to the planning process. the pilots was a great aspect. we did pilot in three visns, 6, 11 and 20, virginia/north carolina area, the michigan

area, and the pacific northwest. we piloted beginning in january for about 60 days. those pilots concluded in march. we did learn from those pilots and were implementing changes to ensure that care is not impacted. some of the things we learned is that our staffing models were incorrect. the number of procurements that we could do in a day in the contracting office. we are hiring, we received approval to hire additional people to ensure we can keep up. we are streamlining the process by, i mentioned justification approvals, by templating that process so it becomes more fill in the blank with the clinician's prescription. those are the type processes. we are slowly now implementing and the rest of the veterans health administration, i think four more visns are starting that process now and the rest will be coming on in june and july. the goal is to have all this done by the end of july. there is a contingency plan we have discussed.

we still have the legacy procurement system if something does not go right or something unexpected happens that we can fall back on. but we don't expect that to happen. >> i would like to add that this has been a very strong collaboration and partnership, prosthetics and sensory aid service is very concerned that we can continue to provide the services to the veterans that they deserve and that we have always been able to do, and so our prosthetics organizations at our local medical centers and visn levels remain the eyes and ears so all orders come through prosthetics, prosthetics is managing them and working with contracting officers to achieve the placement of the order as is required to be meeting all of our acquisition requirements and

we are, as mr. doyle has said, very aware of the ability to use 8123 and have spent a significant amount of time developing justifications and approvals that allow us to use that and really reflect the needs, the individualized rehab needs of our veterans. we are very much aware that we customize these products and services, that they are selected based on an individual veteran's needs and that has been our goal

as we have managed this transition. we're coming into a critical time as we move the transition forward and extend it to other visns and we have very well developed and exact procedures in place to monitor this as we go and we are prepared, i think, mr. doyle and i, as a team to -- and our offices as teams to review this very carefully and make recommendations as the way forward based on how this process affects veterans. >> i'm sorry, ma'am. >> go ahead. >> may i add that when i met with the advisory committee on prosthetics and special disabilities last week, they had many of these very same concerns. i think after spending some degree of time with them, they at least understood what we were doing. they're still very interested in ensuring we do achieve success. i'll let dr. beck comment. i don't think we left there with a burning issue. at least i did not, that we needed to address. also, as a veteran myself, who made several trips to iraq and afghanistan both in a military and a civilian capacity, i'm that hurts the veterans. there but for the grace of god go i, actually.

that's the way i look at it. >> thank you. my time is way run over. however, if my colleagues will indulge me, i have a couple follow-up questions and i will allow you to have as much time as you need. my first concern is you said with procurements, it just only pertains to those over $3,000 and you said only 3% of the orders are over $3,000. how many requests do you have? >> that is still not an insignificant number. based on our planning estimate, our planning figures for fiscal year '10 in which we planned the transfer over, was 3% of the orders equals roughly 97,000

orders. >> so i would suggest that because we're talking about 1500 warriors with amputations that probably are in need of prosthetic, that that is going to be a small percentage of what you're doing. however, all of those are going to exceed that $3,000 threshold. we heard earlier about a $12,000 limb and if it's $25,000, that doesn't matter because the veterans need prosthetics and they need state of the art prosthetics. so that concerns me, that piece right there. the other thing that concerns me is you mentioned that you talked with your union partners. it would seem to me more appropriate to talk to your veteran partners and to the veterans who have gone through

this and be more concerned with their thoughts about this being a program that works versus talking to the union partners. lastly, the pilot information, the results of those pilots, if i could respectfully request that you provide us with -- i think you said you did three, if you could provide us with the findings from those pilot programs, i would appreciate it. thank you. i now yield to the ranking member, mr. michaud. >> thank you very much, madam chair. i just want to follow up, mr. doyle, on your comment that you made where you mentioned that contracting officers do not change what the clinician prescribed but actually, in testimony we heard earlier from pva, that is not the case, that their testimony states that contract officers when they do receive the orders, the request for the devices is modified and even denied in cases because of the cost. so that is a huge concern. there seem to be a disconnect from what you're hearing versus what the vsos are hearing because that is not the case. the cost is a factor. it's not the veterans' health care. so do you want to comment on that? >> yes, sir. thank you. first of all, contracting officers, all contracting officers do have a mandate under federal acquisition regulations to ensure that there's a price reasonableness aspect to the cost we are providing.

i don't know if that is a concern or not. can't really speak to what may have happened before but i have put out to the contracting community that under 8123, if a contract -- if the contracting office receives a physician's consult for a specific product, we will do due diligence to ensure we pay a fair and reasonable price for that product but we are going to get that product for that individual. so i don't know if it's a concern that again, i'll take full blame for not bringing the veterans service organizations into the loop into this discussion and we can fix that, but i don't know if that's part of the issue there, why that concern was being raised. >> well, it's very clear from the vsos, some of their statements, that it's not uncommon for clinicians to prescribe something and it's being modified by contracting officers and primarily because of cost. that's a big concern that i would have. my other question is mr. orris

talked about older veterans at his practice complaining that there appears to be a new administrative hurdle to prevent their continuing to receive at scheck and cyrus. the va has assured veterans that they may choose their own prosthetists, yet veterans who wish to use community-based providers report widespread administrative hurdles and other pressures to choose in-house va care. how would you explain the perception among the veterans in the community-based providers? there seemed to be a disconnect here as well as far as what you have told us versus what's actually happening out there. >> yes, sir.

i'll start and we do have contracts with 600 providers, approximately 600 providers. we do offer choice to our veterans and when our -- in our amputee clinics, when we initiate the process for the multi disciplinary care that we provide, we have our physicians and our clinicians and our prosthetists there. we also have our vendors, our contracted community partners or contracted prosthetic vendors from the community are there, as well. the veterans do have that choice, that's part of our policy, and we, as we become aware of, we will reaffirm that policy with the field based on

what we have heard from our veterans today, and -- and we are improving the processes. i think the inspector general report pointed out that there are some contract administration initiatives that we need to undertake, including streamlining the way we do our quote reviews so that they happen in a more timely fashion, and that they really clarify the prescriptive elements for fabrication of the leg, and we are doing that, or fabrication of the limb, and we are doing that. the second thing we are doing is we are making sure that our contracting officers and their technical representatives who have as part of their responsibility to review those quotes and certify that they are doing that regularly and in a timely fashion. there's guidance that is being prepared even now with -- to reinstruct the field and educate them on that.

and the third thing that we are doing is we are taking a contracted, what we call contracted templates where we are developing policy and guidance that can actually go into our contracts so that it is clearly specified for the contracted provider and the va exactly what the requirements are and the timelines. so we have taken the report that we have from the inspector general about the need to improve contract administration to support our veterans seriously and we are making those corrections and have been doing that over the last several months. >> do you feel that with the new changes that you're providing -- gets back to my original question -- that the clinicians will have final say in what a veteran receives versus a contracting officer who has to look at contracts and saving costs, which i believe that we have to do, but the bottom line

for me is to make sure that the veterans get the adequate prosthetics that they need and if it costs a little bit more, then they should be able to get it, if it fits them more appropriately and the concern that i have is, yes, you got to look at saving costs but not at the cost of providing what our veterans need, and i do have a concern with contracting officers injecting more cost versus the clinician looking at the veterans' needs. >> yes, sir, i have a concern with that, too. i'm a clinician myself working in another area who provides rehab technologies to veterans, and it is critically important that what the clinician requests, and that of course is done in collaboration and in partnership with the veteran, these are choices and decisions about technologies that our veterans make with our

clinicians, and we are absolutely, rehabilitation is not effective unless we are able to provide the products and services that our veterans need. and our role in prosthetics and in rehabilitation is to assure that any -- that any contracts, the way we procure items enhances and -- not only enhances but provides high quality individualized care. we have done that successfully for a long time and we believe that we are able to do that as we move forward, and as mr. doyle has cited, we can certainly work within the framework of contracting requirements and the added authority that congress gave us

many years ago for 8123, i think, is the other piece of sole source procurement that we can do when we need to provide and when we are providing highly individualized products and services. >> thank you. thank you, madam chair. >> thank you. i now recognize the gentleman from texas, mr. reyes. >> thank you, madam chair. dr. beck, you mentioned the center of excellence. where is that located and how much of the work being done there is medical research as it pertains to prosthetics? >> the center of excellence that i spoke about is a joint va/dod center of excellence for extremity care. that actually will be a virtual center or is a virtual center. it will have locations in san antonio, texas and in washington, d.c.

staff will be distributed across our system so that some of our staff will be in various centers, both va and dod centers around the country so that we are collaborating, coordinating our efforts and i think you mentioned research earlier, sir, and one of the things that we talked about that we will be able to do by leveraging the capability with dod and va is that we will be able to do clinical trial type of evaluations at a number of different centers at the same time and that is one of the missions of this joint va/dod center of excellence is research coordination and studying and reporting on new technologies and developing better outcomes for care. >> and how will you ensure that

at least the medical research that's going on is somehow tied back with the feedback being given back by the veterans? their experiences with the different types of prosthetics, the challenges that they have and also, pain management. is that all part of that? >> it is. i will comment and i will ask dr. webster to comment. the participants in these studies will be our veterans and active duty service members so that they will be able to report to us firsthand what their experiences are, so that's how we will tie in the feedback. we also listen carefully to our veterans as we look at their outcomes of care and their successful use of prosthetic

limbs and technologies to gain information about where the research needs are. i'm going to ask dr. webster to comment just for a minute on what we're doing with pain management. >> thank you. i really appreciate the opportunity to be here today and provide this testimony. i would agree that it's extremely important that we get feedback and information from the veterans and service members with amputations on what is important in research. we can do research looking at various things but if it's not important to the veteran or service members, it's not going to do us much good. so it is critically important and that is done on a routine basis. captain pruden provided in his testimony earlier, kind of this expert panel that was put together previously that was looking at the amputation care as well as the prosthetic care, and that will continue to occur as we move forward with our

research efforts. again, with the center of excellence, similar positions, more administrative headquarters will be in san antonio and the national capital region but many of the research staff are actually located within our treatment facilities so they're located within walter reed, they're located within the center for the intrepid. they are completely integrated with the clinical staff and with the soldiers and veterans who are being treated in those facilities. >> and i'm curious how the process works. is there like a caseworker that will have a caseload of the particular veterans to make sure that feedback is coming to the caseworker and that feedback goes into the r&d component? how does the process work? >> i think it can occur both directly from the service member

or veteran to the researchers. again, they're going to be co-located in the clinical areas so that feedback can come directly but there's also opportunities for the feedback to the people who are doing the research to come from the case managers, to come from the other providers, whether it be a physical therapist or physician, any of those providers who are providing care for people with amputations can also provide that input into what's important for research and research initiatives. >> when will this process be implemented? is it already going on and if so, are there examples, an example of how that's working to make sure that the feedback of the veteran is taken into account? >> well, the center that we spoke about is standing up now. we expect it to be operational

by the end of this year. i want to talk about i think a couple of research projects which are good examples of the work that we are doing and i think that one of them is what's known as the darpa arm, which is probably the most advanced research activity that is going on, and that's the defense agency project for the development of a prosthetic, upper extremity prosthetic arm, and the way that is working and va's participation, that of course has been funded by the defense department. >> that's the one that medal of honor winner -- >> yes. >> -- has, right? the one -- >> you have that arm? we're going to find out that for you. we're not exactly sure. >> i think that's right, because i visited with him in my office and he actually took the hand off and put it back on, and i'm

not 100% sure but i think either he or somebody with him referred to it as the darpa arm. >> did they. okay. we'll check on that for you and find out. one of the things, this is a good example of veteran feedback, in the first study that was done to evaluate the arm, our veterans participated in that study and actually came to va facilities and participated in the study. we anticipate the second part of the study which will now be a take-home study where veterans will actually be able to take the arm home and use it in their everyday activities, and so they will then be providing feedback and -- on the arm and how it works and what design -- what is required next. we do that frequently with