ow about before. >> so i want to say that certain kind of malignancies have very short latency periods. and you'd expect to see something like that within just a couple of years after exposure to toxins. but other toxins like asbestos have much longer latency periods. and they might be seen later on and at a different time. and if i could use just a few minutes to also answer a question that you asked dr. howard earlier about mistakes made by providers outside of the program. if i could just add that we have found in the program that people have been undertreated by local providers for various cancers for various severe lung conditions like pulmonary

fibrosis. and i do want to say even that wasn't exactly the question you asked, i do want to say that we have been able to improve the health care by toning up by getting better diagnostic services to our patients than they were able to get from some of the local people. >> thank you very much. thank you, mr. chairman. >> chair thanks the gentleman. that concludes the questions of the members. they will have follow-up questions in writing. we will submit those to you ask you please respond promptly. i would remind members they have ten business days to submit questions for the record. they should submit questions by the close of business thursday june 25th. thank you very much for sharing your personal experience for your excellent testimony. the committee will take up this legislation i assure you and act on it. and you've performed a public

service by being here today. thank you very much. and without objection the subcommittee's adjourned. >> another presidential campaign announcement today. bloomberg politics tweeting out just in jim webb announces presidential campaign, the former virginia senator will run in the contest for the 2016 democratic presidential nomination. another democrat entering the field. president obama meanwhile arrived in wisconsin today. "new york times" photographer doug mills showing the president being greeted on the tarmac by republican governor scott walker. fox news reporting that governor walker will file paperwork today for his run for the republican nomination for president. but that he'll wait until july 13th to publicly launch his campaign. the president's in lacrosse

wisconsin today to promote a posed labor department rule that would make more than 5 million workers eligible for overtime. the plan announced on monday would raise the earnings threshold under which salary workers are entitled to overtime. the president's scheduled to begin his remarks shortly. you can watch that on our companion network c-span. tonight on american history tv primetime, the declaration of independence and the national archives work to preserve the original document. participants include the ark vis of the u.s., national archives conservation director historians david armitage and woody colton editor of the thomas edison papers and collector and broker of rare documents. that's coming up tonight at 8:00 eastern here on c-span3. primetime tonight on c-span it's conversations with some of the tech industry's leading executives and regulators from this year's techcrunch conference in new york city. you'll hear fcc chair tom wheeler on the public's response

during the net neutrality rule making. >> one of the most surprising things during the net neutrality saga over the last year was the simply massive outpouring of public comment. i'm curious up front were you surprised at the amount of comments that came in? and how early were you shocked by that? when were you like, oh, man, this is bigger than most policy debates are? >> i remember there was a day early on when we had 100,000 150,000 kind of comments being filed. and you go, whoa. but, you know, that's why this debate, that's why this decision was so damn important. because what those 4 million people wlo were filing with us and not all of them were pro. >> but it was mostly pro. >> right. it was about three-quarters were pro. but that still means there's a million people that didn't like the idea okay?

which is a nontrivial amount. but the point of the matter is that this proved the power of an open internet to free expression. and it just happened that the issue being decided and the ability to communicate using that technology happened to coincide. >> you can watch chairman wheeler's full remarks tonight at 8:00 eastern as c-span brings you conversations from this year's tech crunch conference in new york city. the event provides an insiders view of the business deals and trends shaping the internet. the c-span cities tour is partnering with our cable affiliates as we travel across the united states. join us and cox communications this weekend as we learn about the history and literary life of omaha, nebraska where the deporres club was one of

america's first advocacy groups. >> omaha had a reputation in the african-american community in omaha and the united states as a city if you came in if you were black, you needed to keep your head down and you needed to be aware you weren't going to be served in restaurants. you weren't going to be able to stay in hotels. when the de porres club began their operation, the idea of -- in fact the term civil rights wasn't even -- they used the term social justice because civil rights wasn't part of the national lexicon at that time. the idea of civil rights was so far removed from the idea of the greater community of omaha or the united states, that they were kind of operating in a vacuum. i always like to say they are operating without a net. there were not those support groups there were not the prior experiences of other groups to challenge racial discrimination and segregation. >> we look back to the union pacific and how the construction of union station helped omaha's economy. >> union pacific is one of the

premiere railroad companies of america. it was founded in 1862 with the pacific railway act signed into law by abraham lincoln. and so it combined several railroad companies to make union pacific. and then they were charged with building the transcontinental railroad that would connect the east and west coasts. so they started here, was moving west and central pacific started in -- on the west coast and was moving east. and they met up in utah. and that's really what propels us even farther. we become that point of moving west, the gateway -- one of the gateways to the west. >> see all of our programs from omaha saturday at noon eastern on c-span2's book tv. and sunday afternoon at 2:00 on american history tv on c-span3. a house committee's looking into non-va health care services for former soldiers who usually

receive medical care from department of veterans affairs facilities. testifying were v.a. executives who oversee contracts for external care, federal oversite official and an army official who experienced troubles with contracted care. the energy and commerce subcommittee hearing is about an hour and a half. >> good afternoon. this hearing will come to order. i want to welcome everyone to today's hearing titled circumvention of contracts in the provision of non-v.a. health care. this hearing is the second in a series of hearings examining illegal v.a. procurement

practices resulting in massive wastes of limited taxpayer resources in serious jeopardy to the quality of health care received by our nation's veterans. in our previous hearings we focused on the mismanagement and misuse of purchase cards and avoidance of contract requirements spending limitations and warrant authority. v.a. senior executive testified that these andunauthorized were in the billions of dollars. -- abuse in the procurement of non-v.a. health care services by vha. by far the most prevalent method by which veterans receive non-v.a. care is through the individual authorization so-called fee basis process.

under title 38 of the code of federal regulations section 17.52, authorized to obtain non-v.a. medical services when demand is infrequent and the needed health care is not available in-house or through an existing contract. unfortunately v.a. uses this process even when these requirements are not at issue. moreover, v.a. admits that the execution of these authorizations does not comply with the contract requirements of the federal acquisition regulation, or f.a.r. and veterans affair acquisition vaar. mr. fry will testify that by long standing and massive circumvention of the f.a.r. and vaar in the fee basis authorization process v.a. has

illegally obligated billions of dollars. he well explained that v.a..in curs billions in improper payments that represent material weaknesses in v.a. internal audit controls significantly. in 2009 and 2010 the oig reported on serious problems with the accuracy and efficiency of claims paid through the fee basis program. the oig reported that v.a. medical centers made hundreds of millions of dollars in improper payments including duplicate payments and incorrect amounts. most troubling is that vha had not established fraud prengs or detection controls because it didn't consider the program to be at significant risk. oig estimated that v.a. could be paying as much as $380 million

annually for fraudulent claims. and in may 2014 contrary to v.a.'s assertion that previous illegal purchases can be institutionally ratified, oig reported that v.a. further violated the law by institutionally ratifying illegal purchases and avoiding important checks and balances. today, gao director of health care randall williamson will testify about the continuing limitations and oversight of health care service contracts and will focus particularly on the inadequate management of clinicians who provide services under contract with v.a. facilities. we will also hear from united states army veteran christopher lobonte, whose horrific experience with v.a. represents

a case study in the risk associated with noncompetitive contracts, with affiliates and the importance of quality control and oversight of contract performance standards. as i said in the purchase card hearing, violations of procurement laws are not mere technicalities. it is not just a matter of paying a little more for needed supplies and services as some apollogyists have asserted. among other things without competition businesses may be awarded based on -- business may be awarded based on cronyism and the directing of business to favored venn tordors including those who may be employees or former v.a. officials.

without contracts patient safety provisions are not legal requirements. v.a.'s mismanagement of the fee basis program is not a justification to dispense with f.a.r. or vaar requirements. if the atom bomb built -- surely v.a. can deliver patient care under them as well. with that i now yield to ranking member custer for any opening remarks she may have. >> thank you mr. chairman. this afternoon's hearing is a follow-up to our hearing four weeks ago. at the end of the day, we can all agree we want to see our veterans receive the health care they need at precisely the moment they need it. but i want to make clear that neither i nor my colleagues view

this laudable intent as a blanket rationale for not following laws, regulations or proper procedure. federal and v.a. acquisition regulations exist for a reason. they exist to ensure that there's proper competition when appropriate and that the best practice and price is possible is obtained when the government purchases goods and services. for the v.a. these laws protect veterans, save taxpayer dollars and ensure our veterans receive the highest possible quality of care. v.a. states in its testimony that's had a 30-year practice of using individual authorizations without applying federal acquisition prosescesses and procedures. at the same time it seems that the v.a. has taken the position that individual authorizations are indeed contracts and should be viewed as such. he even would acknowledging when v.a. officials appear to have acted in a manner inconsistent

with procurement law. now v.a. is arguing that it needs new statutory authority, quote, to resolve what has emerged as serious legal questions to its purchased care authorities. this new authority would explicitly exempt v.a. from procurement regulations and requirements and allow the v.a. to continue with the same practices that it has been following for the past 30 years. i personally am not convinced that this is the best solution given v.a.'s significant lack of oversight in this area. in fact, i would argue that the problem is not that the legal questions have arisen over v.a.'s purchase care program but that for too long v.a. has operated a program where the legal basis has been challenged and yet v.a. has never changed course or modified its procedures. v.a.'s authority to purchase care without having a contract in place is predicated on individual authorizations being used, quote when demand is only

for infrequent use, period close quote. i'd be interested in finding out how much of the $7 billion expenditure for non-v.a. care in fy2014 has been obligated under this authority as compared to situations where contracts are in place. as we examine the current legal authority for v.a.'s purchase care program and whether this authority must be modified, we must first get to the bottom of how this program has been operated over the last number of years. it's absolutely critical that we understand how v.a.'s legal interpretations change and were communicated and enforced. it's hard to expect accountability when there are no clear signs pointing out the way. the testimony of mr. frye and the various legal arguments made by the v.a. litigation makes it seem unlikely that over the last number of years clear policies and procedures were in place. g.a.o.'s testimony points out

significant weaknesses in v.a. monitoring and oversight of its nonv.a. medical care program. perhaps it is now time to stop applying quick band-aids and resolve right now to fix what is wrong. it took years for v.a. to get into this problem. and it will take time to fix it. but the first step in addressing the problem is to acknowledge these problems and quickly and forthrightly come up with a concrete plan to fix them. finally, i'd like to thank mr. labonte for appearing before us today to relay his story which is absolutely horrendous. mr. labonte reminds us that the bottom line is the quality of care for our veterans. in quality can certainly be impacted by lack of accountability and process when it comes to making sure that all relevant laws regulations and policies are followed. and with that mr. chair i yield back the balance of my time. >> thank you ranking member custer. i ask all members waive their

opening remarks as per this committee's custom. with that we have the first and only panel at the witness table. on the panel we have mr. edward murray acting assistant secretary for management and interim chief financial officer of v.a. office of management. mr. gregg giddins principle executive director of v.a.'s office of acquisition, logistics and construction. mr. norbert doyle, chief procurement and veterans officer of the veterans health administration. ms. anderson assistant general council for government contracts of v.a.'s office of general counsel. mr. january frye, deputy assistant secretary for the office of acquisitions and logistics. mr. randall williamson, director of g.a.o.'s health care team.

and mr. christopher labonte united states army veteran. i ask the witnesses to please stand and raise your right hand. do you solemnly swear under penalty of perjury that the testimony you are about to provide is the truth, the whole truth and nothing but the truth. thank you, please be seated. mr. murray, you are now recognized for five minutes. >> good afternoon chairman coffman, ranking member customer and members of the committee. thank you for the opportunity to discussing the members of the veteran affairs by contracting for the community provides. this discusses legal interpretations and the process of hundreds of thousands of

purchase care transactions per year. i know we will be discussing these areas in detail and that the committees oversight is important. they will depend on a mix of in house and community care with care in the community continuing to grow to ensure veterans get the care they need in a timely way as close to home as possible. so while the discussion here may be technical, we're discussing transactions that represent the purchase of health care for a veteran who needs it. when purchasing care in the community, v.a. depends on both federal acquisition based contracts and nonfar compliance agreements also referred to as individual authorizations. these agreements are used in many situations because a provider may have a relatively small number of veterans referred by v.a. as part of their total patient mix. for those providers it may not make business sense for them to enter into a bar based contract

to provide care. this is especially true in rural areas. although these agreements are not far complaint v.a. utilized controls to ensure the care is obtained from a qualitied provider and the services billed are consistent with v.a. regulation before a claim is paid. these practices safeguard veterans to protect taxpayer dollars. the v.a. use of community care has risen dramatically n. fiscal year 2006 it was raufly $2.7 billion, for fy 2015 we estimate $10.4 billion. over those years the different authorities for purchase care have not been applied consistently and have been marked by conflicting interpretations. with the determination by the department of justice that individual authorizations are contracts and tluf must be client. the v.a. began reviewing the internal process working toward development of improving

immigration transparency and over site of all purchase care. we have recognized these problems and proposed a solution. last year an in formal discussion with committee staff v.a. noted issues that would need to be astressed by statute and in february -- in february's budget submission we noted that the department would be putting forward a legislative proposal. on may 1st we provided a formal proposal for comprehensive reform including very specific requirements for nonfar based agreements. the legislation would authority the secretary to enter into veteran agreements when far based contracts are not practical with payment rates tied to medicare rates similar to community care throughout the veterans choice program. the legislation recognized that far based contracts shall be used when they can but useds nonfar based agreements. every two years they would

review nonfar based agreements and evaluate whether nonfar bases contracts are appropriate. this is for veterans and taxpayers. mr. chairman we look forward to answering the committee's questions. >> thank you, mr. murray. mr. frye you are recognized for five minutes. >> chairman kaufman, ranking member customer and members of the sub-committee, thank you for inviting me testify today. you just heard about the illegal purchases of billions of dollars of v.a. care over multiple years. you are not not now confused. >> would be surprised. would you be completely confused if i were not familiar with the fakes. with do not intend to admit our affairs of public confused. there is confusion, inconsistent application and conflicting interpretations. as v.a. seniors we have had many years to correct these conflicting interpretations. there are conflicting

interpretations of the law. here are some facts. in october of 2012 a senior official advised me there was conflicting interproetations. [ inaudible ]. on 2012 i began a personal inquiry into the matter. i sent this official and a subordinate hoping for additional information, he declined to respond. on december 3rd i sent a note to a senior executive requesting a legal opinion as to whether these were considered far based contract and i received no response. i followed up again on december 31st and for a third time on january 15th, 2013. on february 28th, 2013, nearly three months after i requested the initial opinion, the office of general council provided me a

legal opinion dated september 20 10th 2009, this opinion categorically declared it to be far based. there is no confusion in this legal opinion despite what you heard to the contrary. neither my predecessors nor myself has acquired v.a. health care except by nonfar based methods. you may wonder why i had never seen this legal opinion and why there was such reluctance to provide it to me. this is an enigma. we testified under knowledge in 2010 stating fee based care was not far based. if this legal opinion existed in 2009 why was it kept from us in preparation for the hearing. given the recall sit ranc i submitted a v.a. hotline complaint in 2009. they refused my submission questioning my motive for submitting the complaint. i stubbornly persevered and they

stubbornly accepted it. i'm unaware of why they investigated it. i accepted senior leadership acceptance in conducting ratification actions for the massive violations of federal law. i received no offer of assistance from either office n. may of 2013 secretary shinseki was briefed on nonv.a. authority care actions and made away of our knob legal actions and i was not invited to the meeting. in 2013 i wroept a letter to representative issa outlining my concerns and the illegal matters and others and my letter never made it to him. two senior officials who were apparent friends one from the house oversight committee and one from vha conspired to keep chairman issa and others from serious violations of federal laws. in april 2014 the v.a. senior assessment team voted to close ongoing discussions of nonv.a.

medical care with mine as the lone opposing vote and in that same meeting they sponsored a motion to pass to raise the reporting leave of v.a. material weakness from 400 million to 1 billion and i believe this is an effort to avoid reporting of annual statement of insurance process. from july to november of 2014 we collaboratively evaluated nonv.a. health care. v.a. senior leadership rejected this and this past friday deputy gibson voted to make this a personal issue with me. his demeanor in actions in open and one-on-one meetings were clearly meant to intimidate me and cast violations in the future. i will allow you and the court of public opinion to decide for yourself if what i briefly described constitutes

corruption malfeasance or dereliction dereliction. veterans receive health care without protection of mandatory predilection and no one is liability. [ inaudible ] forsake of convenience. when will the v.a. senior leader be held accountable. there were more than a dozen of the senior leaders in the july 2014 meeting. the legality was positively affirmed not a single leader save one subsequently acted to save the government interest on resources. we've lost our way. senior leaders are required to obey and enforce federal laws our actions andin action do not fit anything i've experienced under 40 years as a military officer and civilian military public servant.

this concludes my statement. i'm prepared to answer any questions the sub-committee may have for me. >> mr. frye. mr. williams son you are administers for five minutes. >> thank you. i'm pleased to be here today to deliver care through nonv.a. providers. they treat veterans in community hospitals and doctors offices using either a fee for service arrangement or a prearranged provider network. nonvaf providers also render care in v.a. facilities under a contract arrangement or affiliation with university medical schools. in fiscal year 2013 v.a. spent almost $5 billion for nonvaf providing medical care for more than 1 million veterans. as more veterans seek care outside of the v.a. system it is important to make sure that v.a. care is of quality and reliable and sufficient.

three recent reports acknowledged weakness of the nonv.a. medical care program and todayly focus on issue v.a. needs to resolve in this area. in may of 2013, g.a. reports that v.a. does not collect data on wait time referred to nonv.a. providers and v.a. cannot assure that veterans are receivek access to medical care comparable to care at v.a. mc's and also they do not have automatic systems capable of collecting data for all services and charges tied to a specific episode of care during in patient stay and as a result it does not know how much it is paying for care for nonv.a. providers and cannot ensure that they are appropriately billing v.a. for veterans care. in october of 2013, we reported on weakness in contract

nonproviders to provide care at nonvaf facilities and specialties that are difficult to recruit that supplement clinitians in high volume areas or fill critical staffing vacancies. we found that contracting at v.a. mc's who monitor contract performances on variety of contracts for goods and services including coin cal contracts had heavy work loads and had heavy engagement of clinical contractor which compromised diligent oversight of nonv.a. providers. robust v.a. over site is essential to ensure that nonv.a. providers deliver high quality care and fulfill the responsibilities of their contracts. finally, in march, 2014, we reported serious weaknesses in the way v.a. was administering and over seeing the program for reimbursing nonv.a. providers for emergency services for

nonservice connected veterans n. processing and reimbursing claims for nonv.a. provider we found patterns of v.a. noncompliance with its own processing requirements attributed largely to over site at the local and national levels. therefore some veterans were billed for care that v.a. should have paid for and many were not vfed that v.a. had rejected their claims for reimbursement for care for nonv.a. providers and as a result many may have been denied appeal rights. while v.a. has made progress in addressing recommendations we made in these three reports only one-third of them have been fully implemented. moving forward, as new components are added to v.a.'s nonv.a. kmad care -- chemical care program and p t3 and provisions of the choice act it is anticipated the number of veterans seeking kmad care

through nonv.a. providers will continue to grow. it is essential they provide oversight and accountability in the nonv.a. medical program such that relevant staff at every level understand the importance of and are held accountable for ensuring that veterans receive high quality accessible and cost-effective care for nonproviders. this concludes my opening remarks. >> thank you mr. williamson. mr. labonte, first of all, thank you so much for your service to the united states army and you are now recognized for five minutes. >> thank you for giving me the opportunity to speak to this committee today. i'm christopher kevin labonte and i had upper jaw virginia on august 13th in the atlantic surgery medical center. i've providing a written statement that explains in detail the events. i was coerced in a highly evasive surgery that was

provided by a student with no background to even be present in the room let alone in the residency program. i have submitted evidence to prove this statement. the v.a. medical sent has la guardia been negligent. they have allowed unqualitied personnel to gain entry and provided some of the with worse health care i've experienced. and i have submitted medical evidence along with my written statement proving the willful nelgs from the doctors and the corruption. on the day of my surgery they allowed ab re hume muhammed, a student from kuwait, to be the primary surgeon to provide my surgeon. i had no recollection of signing this document as medicate was already add mibsterred.

he cut my nerve and as a result of this surgery, i now have damage to multiple in my cranial nerve. it is known as suicide decide described as one of the most painful conditions known to man. they admit to damaging a portion of the nerve cutting it during the surgery on august 15th, 2013, by ibrahim muhammed heron he has devout islamic views and i was deployed to kuwait and at the same time he was attending the university of kuwait. it is no secret that many people from this region and religion want to harm u.s. soldiers and my question to the v.a. is why he was allowed to operate on combat vets that he would have difficulty treating and they should be sensitive to to the

neats for veterans to feel comfortable and safe with their doctors and the v.a. medical centers should be more sensitive to this fact than any other facility in the country and i should have the choice to have him involved in my care on any level, especially performing a highly danger surgical procedure that required me to be unconscious. i wake up every day, if you could imagine the worst tooth pain you have felt, that is how all of the right on the right side of my mandible feel. i have to take muscle relaxers three times a day for the muscle pain and spasms and i take muscle and skeletal and nerve pain and take anxiety pain and cause sharp facial pain and cause severe migraines and they feel like someone is kicking me in the skull and i struggle with facial disformity and my diet is live imthe to soft foods and

according to the nonv.a. doctors will i need continued medical care for my mouth and jaw and i will have to wear oral prosthetics for the rest of my life and have chronic pain management for the rest of my life. i'm extremely disappointed in the v.a. health care system. the v.a. priority is to follow order, one profit, protecting high level bureaucrat four cutting costs and five, and finally six veteran [ inaudible ] health care as health is barely taken into account. from my experience the motto should read delay, deny and hope you die. >> thank you mr. labonte. the written statements of those who just provided oral testimony will be entered into the hearing

testimony. we'll now proceed to questioning. mr. labonte, how long have you been waiting for v.a. and or emory to address the situation created by the surgery? >> since august 16th of 2013. >> okay. so nearly two years. >> nearly two years. it will be two years this august. okay. mr. murray, in the september 2011 fha fee care program white paper it was recommended v.a. conduct a cost benefit analysis of contracting out the process of claiming as with other payor models like try care medicare, medicaid, blue cross, blue shield et cetera and their applicability for v.a. what was the rest of the cost benefit analysis? >> thank you for your question. i'm not aware of that being

conducted. but i believe i'll ask my vha head of contracting activity if he is aware of that analysis. >> sir, i'm not aware of that analysis. >> mr. frye, any comment? >> i'm not aware -- i can't give you an answer on that. >> okay. mr. frye v.a. secretary mcdonald was publicly critical of you after the last hearing conducted by this sub-committee on may 14, 2014. the secretary -- is this 2015? >> yes, sir. >> i'm sorry may 24, 2015, the secretary stated that he was aware of the problems and characterized your memo as quote, just showing what he, meaning mr. frye needs to improve, unquote. he further stated, it is your,

quote, responsibility to fix it, unquote. what is your response to secretary mcdonald's statement? >> well, i think all of us make comments and then wish we could retract them. i'm not sure mr. mcdonald had read my 35 page statement to him at that point. since that time, mr. mcdonald -- secretary mcdonald came to see me last week and he expressed appreciation for me raising these issues. in answer to your question specifically, i don't run contracting. i'm responsible for overall policy in the v.a. and i have one of six heads of contract activity that does report to me but i do not run contracting for v.a. i think anyone who reads the document i provided to the secretary will see that i've struggled in trying to right the ship and i certainly was asking for assistance from he and the

deputy secretary given i've been unable on my own to fix what is wrong. so again i make comments again that i wish i could withdraw and perhaps he does as well but i sincerely believe at this point that the secretary appreciates and is probably more angry than i am at seeing this waste given that he is trying to move us forward and every time we move forward one step and this malfeasance is uncovered we move backward 12. >> i hope you're right, that he is of such. mr. williamson, your testimony states that the v.a. didn't collect data on wait times from nonvaf providers, leaving the department unable to analyze data and did not provide monitoring and data and the services provided. gao made 22 recommendations to

address v.a. shortfalls but how is the department addressing them at this time? >> on all 22? i could provide all of that for the record, but i will say that they have made progress. it is not like they are ignoring -- they are meeting with us and making progress. but to consider a recommendation from our perspective, we require some rigorous documentation and v.a. hasn't provided that documentation as of now on many of those. >> okay. thank you mr. williams. ranking member custer. >> thank you mr. chairman. i have a question at the top just to get to the bottom of the issue as to what legal authorities provide the basis of purchase of nonv.a. care and so i'm asking our representatives from the v.a. to provide the following documents. the 2008 guidance from the chief

acquisition officer and office of general counsel that nonv.a. care was not governed by far. i think that was the original 2008. and then the may 2013 white paper provided to secretary shinseki on nonv.a. care authority options. and then finally, and i don't have a date for this, but i think from the testimony it is 2014, the department of justice ruling that referenced that v.a. must consider all fee-based care actions as being far-based. so i want to -- i'm interested in going back but i also want to try to go forward, where we go from here. i think whenever we talk about health care, we're talking about sort of a triangle of access, quality and cost. and it seems to me part of the problem that we have in terms of public policy going forward is

the sheer scope of this problem. because part of what the choice act, it entails is to bring in private sector network coordination through tri-west and health net. essentially that is what we're talking about here. i mean it is massive in scope to have individual contracts and my district is a rural district in new hampshire, i know about these contracts and i know about these authorizations. could you comment -- and we'll start with mr. murray but i would be interested mr. williamson with your knowledgech -- knowledge of reviewing this if you have a knowledge, even a opinion at this, could we get out of this harass, but simply changing the rules of contractor or do you think that we should try to bring in the authorizations and the -- even the far-based

contracts into these private sector networks and i'll just put -- set it up to mr. murray if you would? >> so the choice act does have triwest and health net as the to, we call them third party administrators. and as you know, we have not got off to the start -- the quickest start with those programs as we would like. rest assured that the -- all leadership the deputy secretary, are all doing the most to exercise those programs at the maximum ability extent to get care to the veterans that urgently need it and have earned it and deserve it. the model looks like -- i go to the access meetings every morning. many of the members of this committee have been invited to the morning access meetings. we believe it will be an effective model for providing

care to our veterans. >> can you envision a time in the future where the networks will be sufficiently extensive where you would have dealt with the cost issue whether it is medicare reimbursement rates, whether you would have the quality issue addressed via the over site by the third party administrators, can you envision a time where we wouldn't need to have these one-off individual contracts? >> i will defer that question in a motion to the acquisition folks and the vha individual here nor doyle, but it is about having the right type of providers in the network and certain geographical areas in the country and we see this in the morning through the meetings with the dep sac and that it is all about ensuring you have the right clinical care and right

physicians in the right part -- >> is there an attempt to get the physicians that you're already dealing with through the individual authorizations, is there an attempt to get those physicians into these networks? >> absolutely. absolutely. and health administration dr. tuckman, could tell but the options they are skir sizing reaching out to their current provisor network and encouraging them to get signed up through choice through triwest or health net. and all hands on deck, moving full bore to do that. >> we'll have to come back to mr. williamson on another round because my time is up but thank you. >> dr. benishek recognized for five minutes. >> thank you mr. coffman. thank you all for being here this afternoon.

i think that to me, what i've learned from this, is that it is not as easy to get health care in the private sector for the v.a. as one might think. i think that tricare model is interesting. but they pay tricare the medicare rate and try care pays the providers less than the medicare rate. in my district nobody wants to sign up for this stuff because it doesn't pay very well. and it's been problematic. some of the choice people -- are offered choice but there are no providers that will do choice because they're getting paid less than medicare rates because they pay tricare rates but they don't pay the people providing the try care rates and to get those numbers, it is tough for me to figure that out. but my concern more is about --

for today a little bit is about this -- apparently legal -- illegal activity that has been happening. and i'm just wondering, let me ask mr. doyle, were aware that some of these things were illegal, mr. doyle? i mean that is what mr. frye seems to be telling us. that all of these purchases are illegal and then you have a legal opinion this is not the way it should be done from a long time ago and you didn't know that was the case. your sort of in charge of procurement of outside care right? >> yes, sir. as the chief procurement and logistic office for fha, we do do contracts. >> is your opinion this is not illegal what is going on. >> i'm not a lawyer or a judge and i refer to my legal council and i don't believe they would say it is illegal what we are

doing. >> so there is a difference what you believe and what mr. frye believes is that right mr. frye, is there a basic difference here or am i talking about two different things. >> i think what council will tell you these aren't illegal, it is improper. it is ill loel to go through a stop sign in my neighborhood hood but it is improper to spend billions of dollars outside of the v.a. it makes no sense. this is the same argument counsel used years ago when there was an argument about the buying of pharmaceuticals without contracts and at that time the deputy secretary was here at the table and he -- in his oral statement was about to make the statement that it was improper and not illegal. and this body absolutely confirmed that it was illegal. if we are going to a court of law, the supreme court, i would love to have the argument made that these are improper and not

illegal. but this is the court of public opinion. the court of public opinion not a court of law. >> isn't fee for service providing different than contract? if i'm a private physician, i worked for the v.a. for 20 years and i was a fee for service physician so i didn't have a contract. i agreed to a fee and frankly i wanted to do a contract but it was so difficult to get the contract it would take months or more than a year to get the contract negotiated and completed and they couldn't get it done and they would prefer to do it fee for service because they could get that done right away and i don't know what the details were. >> i'm sorry to hear you weren't on contract. i'm not familiar with the methodology that they used to bring you on. but if we're required to have a contract, we're required to have a contract. >> and let me go to a different

thing. mr. labonte. let me ask you a question about your care. you don't think you signed a consent form before you had narcotics. >> i signed a consent form after i was administered an anesthetic on a digital pad. i wouldn't call it a consent form because i never saw any paperwork but apparently i scribbled on a consent pad under anesthetic to give heron the primary surgeon slot instead of martin beach steed, the surgeon that was supposed to be conducting the surgery. to be that sounds illegal. >> it is highly unusual in my experience, that anyone -- where i come from, nobody is allowed to sign a consent after they've had any drugs. i'm just -- that is usually witnessed by somebody. i imagine you have all of these documents. are you doing a lawsuit in reference to this.

>> there is a court claim pending. and what is unusual is heron is the only residents in the entire program that has a bachelors degree instead of a doctorate and i find that unusual. there are a lot of things that are unusual about the atlanta v.a. medical center. >> and i think that requires more time and work than we need more here today. i'm out of time. >> and we recognize the gentleman from north carolina for ten minutes. >> i'll ask you, because mr. frye summarized what he thought your response would be to the question, was this or was this not legal? >> and not to put too fine of a point, these were not illegal actions or illegal activities. yes, they were not far-complaint. an illegal contract and i'm speaking as a little an illegal action or illegal activity, it

is not enforceable. these -- these commitments are enforceable. in fact, the federal acquisition regulations acknowledge understand that there are times when officials not authorized to commit the government they do commit the government and there is a -- a formal ratification process. the courts and the boards have recognized that when the government makes a commitment, pays receives the services that the government can -- can hide behind the fact that you didn't follow the far, and there is a legal theory for recovery on that. and so i disrespectfully disagree with mr. fry's position

that these are illegal contracts. >> it sounds like, i may or may not be following the distinction, it sounds like this is a -- a obligation by which the v.a. is legal by bound to fulfill. did someone at the v.a. do anything illegal in committing the v.a. to this obligation? >> if we're addressing merely the fact that a person not committing -- not authorized to perform or enter into a contract, the answer is there was no illegal active. >> and so for mr. murray to follow up if this was not illegal, was this improper? >> thank you for your question. it's -- proper is an interesting question because if you establish the obligation, the provider provided the service the provider billed correctly and the provider was paid.

one would argue that it was proper but not far-complaint. >> should the obligation have been entered into in the first place. was that proper? >> so thank you again for your question. so was it proper? if it was -- proper? i'm struggling with the word proper. yes, you can. >> i would like to address that. and this is going afield on the appropriations -- the appropriation area. so if funds are available one, we have the authority to contract. done improperly, but we do have the authority to contract for these services. funds are available then they are proper the payments are proper, from an appropriations and authorities.

>> so let me ask this follow-up question mr. murray, have these obligations been ratified in other words has this been blessed by the v.a. i think we're concerned about what happened here and we want to know if you are concerned and whether you think this is appropriate or not. >> as we know, the office of in spector general recently reviewed unauthorized commitments in the purchase card program. for those that were -- that were identified by the oig, we did 100% review of that entire sample and referred those to the head of contracting activity for ratification review -- if appropriate. so that is where those are. now those are, with respect to the purchase card transaction, above the purchase card. and if we didn't have the

authority, the purchase acquisition, which can go to 10 k, mr. frye will tell you about that and if they are above the $10,000 free care and nonfar based one can logically say they properly require ratification. and if they require ratification, one can make an argument, perhaps they were not proper. >> i'll allow a colleague to pursue this if they choose because i'm out of town and for the record i'll ask mr. williamson what is noble about the cost -- known about the cost of purchasing this care without contract $7 billion, is it noble, and so we'll ask this question for the record and i yield back to the chair. >> thank you, mr. o'rourke. miss walorski five minutes. >> thank you, mr. chairman. and aiming in the direction, not

sure which but there is a business in my district that provides specialized shoes to the v.a. and however this business doesn't have a contract, in november of 2011, they were notified that the custom orthotic appliance and related service released a request for proposals. the business filled out all of the paperwork and they were denied of not having a certified podiatrist, and my question is who sets the technical requirements for the main v.a. office and since they didn't have a contract, how was the v.a. paying them for the services they provided? it doesn't matter. >> i'll take that. >> okay. >> one i'll need to explore more the specifics of the case but the requirements if it was done by vision 11 it was probably done by the local contracting office and they work for me and my organization and

they probably worked closely with the prosthetic folks in that vision or that medical center to develop the requirements. it is not set by the central office. >> i don't believe in this particular case. >> it is possible they were being bought under the micro purchase threshold which is $3,000, by the local purchase card. >> and the owner did say they would receive a purchase order with a credit card number and a expiration date and couldn't purchase more than one set of shoes or incertificates per time and my question is when you are talking about this particular organization serviced about 200 veterans in my zrik and now they can no longer do that, there is no competitor. and when businesses that are highly specialized that service veterans get stuck in this cycle in the v.a. between -- they are not setting the rules. they are responding to an organization saying, yes, we'll

join with you and in partnership to provide specialized care, it is harmful to the folks on the other end of this trying to comply and getting an rfp in the mail saying now you have to sign this and they've been providing this already for a couple of years and they get thrown out because they didn't have the minimum certification and it was okay and they were being paid through the credit card number and the purchase order and don't you see an in equity in that when you are trying to keep service providers available. and they have no idea what is complicit and not complicit. >> right. i understand what you are saying. one could make a logical argument that is a split requirement. if it is a split requirement that goes above the micro purchase requirement of $3,000 in this case there should be a far based contract in place. >> and you can check this out for me if i give you the info. >> yes, i'll be happy to. >> i appreciate. it i yield back mr. chairman.

thank you. >> thank you miss walorski. miss rice you are recognized for mief minutes. >> thank you mr. chairman. i feel like i missed something here. i'm just trying to figure out why, and maybe mr. murray you can answer this question why is there such a reluctance to apply far regulations when you are talking about nonv.a. care. if you can give that answer succinctly because i have a lot of other questions? >> i don't sense a reluctance at the leadership levels. in fact on the leadership levels i see pc 3, choice provider agreements seem to be the preferred approach for providing care in the community. that -- and if you want to delve into this, i think the chief acquisition officer and the head of contract activity might have some sense for why this could be

true in the field. >> ma'am one of the things we try to do with the requests and the legislation requests is to recognize there are some vendors that may shy away with doing business with the government. we're not known as being the most streamlined and easiest to do with. they have to get it done with brad street numbers and apply for federal contract wage statutes and there is a lot of business activities they have to do to do business with the government and what we try to recognize with the legislation is there is an order of legislation. we want to provide care in our v.a. medical senters and next with contractors and last is with the v.a. authorizations and we want to have that backstop and as we go through this priority and the hierarchy of providing care and we see that as the least preferred option but one we don't want to take away from approximately 400,000 veterans being served by some of the small providers.

>> mr. gibbons, it has become a $7 billion backstop. pardon? >> i don't know all 7 of that. some of this is for over all fee, and some is through far and nonfar. >> well the problem is that there is no comprehensive auditing that has been done. i guess, mr. williamson if you could -- i mean what -- what i see a pattern of is gao or inspector general saying here is a problem and here how you fix it andin ---in -- an in till gent way to take the recommendations and fix them and so can you tell them where they are still lacking. >> of course you know v.a. put

on the high risk list very recently and part of the justification for that they are not implementing many of the recommendations. in fact there were over 100 recommendations we've made that v.a. has not implemented just in the health care area alone. so just -- there are 22 recommendations and i don't want to use your time up but let me give you a couple examples. one is we recommended that v.a. keep track of wait times for -- for veterans that went to nonv.a. providers. they have not yet done that. we've talked to them about that. they still haven't done that. >> what is the reason for them not having done it? >> we don't really know. >> well, when you ask them you tell them how to do it? >> i think they want to close the case from the time the veteran starts the process of getting an appointment to the

time the claim is paid, they want to do that in 90 days and they are tracking that but for some reason they are reluctant to track the 30 days. >> why? >> good question. i don't know that they've given us a great answer on that. >> what would be a good answer? is there a good answer. >> they probably don't have the system to do it. it takes a lot of work. it does. it takes some good data. but that is not a good reason necessarily for not doing it. >> mr. williamson, so you've laid out a blue print for how the v.a. can improve, whether it is tracking wait times, doing better audits to see where these multi-billion dollar expenditures are going and i guess what i -- maybe there isn't an answer to this that it seems to me that you have not been able to get any satisfactory answer as why your

recommendations have not been implemented and maybe you are not the right person to answer this but i haven't heard mr. murray give any explanation as to why so -- >> and i think it comes back to the same issues no matter what program you are in, in v.a. the data is often insufficient, the automated systems cannot produce the kind of things they need and a lack of over site both at the local level and at the headquarters level. and time and time again, the claims processing problems we found on the emergency care for -- for nonservice connect veterans same thing, the problem is that you -- there will be no overall cultural shift at the v.a. unless there is meaningful over site whether you are talking about this issue or how whistleblowers are

treated or anything else. and that is really at the heart of the problem, isn't it. >> it comes down to accountability and it is not there. >> thank you mr. williamson i yield back. mr. chair. >> thank you mostly sunny rice. and mr. lambeau. you are recognized for five minutes. >> and thank you, thank you for pursuing another scandal. here it is june 1st and we have another scandal. and it seems like the whole year has been like this and i for one am getting sick and tired of it. mr. williamson i would like to ask you for some back ground in this whole issue. whether we call the contracted illegal or just improper or noncompliant noncompliant, what can go wrong when the v.a. doesn't follow the proper procedures as -- in regards to these contracts? mr. williamson? >> you're talking to me?

>> yeah. >> oh, okay. >> from a gao perspective? >> i'm not a lawyer or a procurement expert either and listening to what i've heard from the v.a. witnesses i'm a bit confused because on one hand, they say there is no impetuous or reluctance to go to a far-based kind of process for purchase care for v.a. nonproviders and i think there obviously is or otherwise mr. frye would not have had the difficulty he's had. i think i would want to know -- i would want to know what a far-based system would mean to accessible care for veterans. because the end game here is still providing high quality accessible and cost effective care for veterans. and so if a remedy to solve the problem, if a bar -- if it is

determined that a far based system should be used here, the remedy should -- i would want to know how long would it take in this process for -- for a person -- for a contract to be executed, and what the process means, and i would want to know how it would affect the accessibility to care for veterans. also one thing we haven't mentioned yet is the whole idea of what it would mean for the acquisition work force. when we did our clinical contract care work we found that the contracting office and the contractors doing the leg works are already stressed in terms of work load. if you increase that work load, you double it ten fold whatever it would mean to get a far-based system then you know, what would it mean in terms of budget for hiring new people and so on.

i just don't know what a far-based system would do in terms of accessibility and the work force and that is what we need to know. >> and what is interesting the gao acknowledged six categories when proper over site is not provided by the v.a. the type of provider care, credentialing and privileging critical stands medical documentation and business proz he ises and the most important to me is the access to care. so let me turn now to mr. frye. would you agree that those six areas are called into question when proper procedures are not followed? >> well yeah, absolutely. and in addition to that, when federal contracts are required and you don't use them there are terms and conditions that are completely missing from the contract. by federal statute you're

required to have terms and conditions. these include the termaination for defall, the dispute clause, fair and reasonable price determination, just a whole host of issues, not -- and probably more important in terms of health care, the safety and efficacy terms and conditions that are required to be followed by these specific contractors. without those contracts without those contracts and terms and conditions, the contractor is free to do what he or she wants. >> and that is my concern. and miss anderson in regards to your statement earlier i have to agree with you the government is obligated pay for services that are rendered, even if the proper procedures weren't followed in -- in soliciting those services. >> thank you for the opportunity to respond to that.

we were comparing a far-based contract and what -- and what it will take to become far-complaint and then to mr. williamson's point, to what end. will that result in immediate care to the veteran. and i chaired a work group in july of 2014 and that work group was responsible tasked with identifying measures and how do we become far complaint. we quickly realized after three hour sessions over four months, three hour sessions over to mauerfour months that are a lot of hurdles to over-comes not the least of with consultations with labor, hiring a work -- a work

consultation work force estimate 600 and then how immediate can we really give the care at that point. still we need to go through the hurdles. so we quickly realized that we need to really begin aggressively pursuing legislation. and aggressively pursuing legislation, we will work with the department of labor, working with omb, and working with the department of justice, we -- we've embedded in the legislation protections credentialing quality of care -- >> ma'am, you are getting into another issue a legislative issue and my time is over. i want to make the point, nobody is arguing the government should not pay the contracts i'm concerned that what gao and what can go wrong when the procedure

is not followed. i yield back. >> mr. wals now recognized for five minutes. >> mr. labonte my deepest apologies for you and what i understand and you understand, much more clearly is that veterans care is a zero sum proposition. if one veteran doesn't receive the care they are entitled to and the best quality then it is a failure. so your situation is unacceptable. the thing i would encourage you on and i looked into this, the tort issue. that is your recourse on this and they will always try to throw barriers up both in the private and the public sector. but there is a lot of good folks out there that can help with you and i hope you can pursue that. >> the efficacy of the tort program is the v.a. essentially investigates themselves. their attorney acts as their investigator. >> trust me, people win these. and what i'm saying is if this

was wrong there are people out there to assist you and veteran attorneys that are veterans themselves and their job is to try to help make this right. >> but the v.a. has a six month head start to coach witnesses where you are not allowed to file a federal appeal. >> i agree. and as you are sitting here listening to this, the issue is all of the rest of this is irrelevant and the issue is what happened to you and from your perspective, there are two things, we are at the 40,000 foot reform discussion here but my advice to you is go down that road pursue that hard and you can get redress. >> that is what i'm doing now and i'm witnessing that program is ineffective as far as the v.a. investigating themselves. the v.a. attorney, the information i send the attorney/investigator tells the privacy officer which records they need to keep or manipulate

or lose and they tell their department how to coach to that particular matter and that course is ineffective and designed to protect the hadn't's reputation than help the veteran. >> i wouldn't disagree with you. but there are folks out there to advocate for you stick with you and others so stick with it. so i'm if i'm going to move back to this 40,000 foot -- sand i appreciate you being here. and my colleague from new york, miss rice was hinting on this, mr. williamson, i've seen this before, gao puts out 22 recommendations, what is the weight of a gao recommend, and what does that do? >> well you are. because we report to the congress and the congress provides the leverage we need. and it is forms -- forums like this that we have that bring those things to light. >> exactly. and again mr. murray, and i can

go down and ask some of these and i don't think it was -- necessarily a rhetorical question i do think you are the wrong person to answer this and this -- and this needs to be fixed and somebody needs to deal with this but this is a much broughter issue and a reform issue and the v.a. being all things for all people and not to aning to onnize my chairman this is the v.a. trying to build hospitals and do everything for everybody and we need to have that discussion to figure out how do we best leverage both the private sector the public sector and our promises to our veterans and get quality care and in the most cost effective manner. and we're here and i would argue dealing with inappropriate versus illegal and they do matter. the bigger issue here is if i would ask the questions and again i don't think they're fair to you mr. murray what should the v.a. be doing and how do we fix the contracting and we'll

get back into mr. frye pointing out where the holes are in there, but this is probably not the forum for that. so i appreciate you all being here. i don't question that we're all trying to get to the same point. but you heard mr. what happens when you break faith. he doesn't believe anybody is going to get good care, and we can tell him countless stories of the highest quality health care delivered in the country by a v.a. hospital and it will be irrelevant to him. that's a noble goal for us to continue to strive for but i don't think we're going to get there in the current system. i'm quite confident your 22 recommendations will be recommended 22 years from now and we'll still be trying to implement them. >> they have implemented seven of them. >> yeah. and again, it's not because of the motive is to not provide quality care. i think it goes back to the institutional design and some of the issues on culture that we're trying to get through. i think that level over the top of this is going to make

answering menany of these questions difficult. i thank you, chairmen, for your time. >> well, again i certainly apologize for your situation, and i think you personalize the problems in this process. i'm stunned by the kind of bureaucratic incompetence, the corruption the lack of leader leadership demonstrated here today. where what i've heard is, yeah, we have these rules. they're really not important. the kind of lawlessness that exists in this department is extraordinary. mr. frye, how do you -- what you have heard today was essentially all splitting hairs. it's oh, it's really not improper. it's really not illegal, but we don't follow the law here because we're somehow above the law. could you comment on what you've

heard today? >> that's exactly right. let's talk about those purchases above $10,000. they're using the same methodology $1 that is used in $1,000 to $10,000, above $10,000. that authority has never existed. every purchase, every acquisition of health care above $10,000 must have a far based contract in place. it must be signed by a dually appointed contracting officer and i'll take issue with ms. anderson. we can't pay that unless it's been ratified by a contracting officer. a ratification is a requirement where a contracting officer must do an investigation. we can't liquidate that willy-nilly, but we are. we're going ahead without doing ratifications and liquidating the obligations. those are improper payments, by the way. our own regulations and the gao red book and other statutes state that we will not pay

unauthorized commitments until they're ratified. we have done it wholesale. to my knowledge, not a single one of these requirements above $10,000 has ever been ratified. and we have bought billions of dollars worth of health care. if that isn't illegal i don't know what is. but i guess we can parse words here. >> mr. frye is there anybody else in senior leadership beside yourself that actually cares about getting this right? >> it doesn't appear that there's anyone outside my organization that cares. i come to work every day, and i watch this malfeasance. i watch this malpractice. you know they have made a mockery of the federal acquisition system. they have the same force and effect as the law, we know that. those of us who are trained, and it's use and the certains know that, but we're ignoring it. this isn't done in any other government agency. if you would to bring other government agencies chief acquisition officers you wouldn't get the same story.

this is just another example of us trying to blow smoke up your sleeve. >> secretary mcdonald just a place holder? i don't get that he's working to make a difference. >> i hope secretary mcdonald cares. again, i hope he dislikes this scandals, this masfesance more than anybody else, because he's got a very shor window to move the v.a. forward. he moves us two steps forward and we move 12 steps backwards every time one of these scandals arises. >> thank you. >> ranking member custer you're recognized for five minutes. >> thank you. mr. fry let me just follow up on this. is every single one of these contracts was far qualified or whatever the verb would be, what would the time commitment and cost to the v.a. be for that process?

>> thank you for asking that question. so, from $1 to $10,000 we have a nonf.a.r. compliant, although, it is far-based system in place. like falling off a rock. it's non-far comply want. the appropriate terms and conditions are in the contract. simply a process where authorized personnel not contracting officers, sign this document, and they're on their way to the doctor. it's not hard at all and it's been that way for years. we recognize, including the counsel, it is not compliant with the f.a.r. so a year ago in july, we began a four-month effort to bring it in compliance compliance. in november, after all that effort, the veterans health administration subamarally rejected it. it didn't go far enough for them. >> that's my concern we have heard from my colleague that a company that had been providing

services was obviously somebody draws attention to that, they didn't have a contract. they tried to go through a contract, but in fact, the process was so burdensome, what ended up happening is the veterans didn't get the podiatry they needed because that company was disqualified. there was no other company available. so i want to try to understand how do we get from here i recognize the problem, i agree with you. we've got a problem. how do we get from here to veterans all across the country getting timely care in a cost efficient, high-quality manner? >> sure and i realize there are issues sometimes with veterans getting care. no matter what system we have, whether it's in the v.a. hospital -- >> but would you agree there's an added cost for all this administrative procedure on top? i'm not condoning it. i'm just asking you --

>> i have no idea if there's an added cost. there is a requirement. >> we're talking about 600 additional people. >> there's a requirement to do it. we don't make the laws. i comply with the laws. >> that's up to us. >> right. >> what i'm asking you is what is the cost to the system for each one of these authorizations to be compliant? >> you're asking the wrong person. you would have to ask the program officials. >> do you agree there is a cost? that there is potential delay there's administrative procedure that has to go on? there are individuals who have to be involved? do you agree. >> there's a cost of doing business with any system. by the way i'm ambivalent if the acquisition wasn't used that's fine, but we have to have a system. we can't just spend money like drunken sailors, willy-nilly. if we're going to have a

non-f.a.r. system, let's put it in place. let's go through the rule making process at omb. let's promulgate those rules and then let's comply with rules. >> what do you think is the correct dollar amount that we would have the balance of being able to supervise contracts but not have every last paper clip be covered by this contractual obligation? >> again, i have no idea. i'm not the program official, but i can tell you this we have f.a.r.-based programs in place. pc-3 is a f.a.r.-based contract. it provides specialty care. and it goes up into the hundreds of thousands of dollars in veterans are getting care every day using pc-3. >> do all of the providers in the network have a far-based contract. >> a what contract? >> a f.a.r.-approved contract? even in a rural area like i'm

in? >> no, there are some rural areas, for instance, another f.a.r.-based contract which is called arch. i'm not that familiar with it because i'm not a program official, but i know it exists because of care that's required out in rural areas. >> so my time is nearly up. i think what i'm interested going forward is let's separate out the ones that are possible. i would like to hear more about the pc-3 far-based contracts and not chase every last one down a rabbit hole with 600 new employees, but let's try to use the public/private arrangement because i know it's expensive. i've been in health care for the past 25 years. it's expensive to supervise these contracts and we're going to have to get to the bottom of it. thank you. >> you're now recognized for five minutes. >> thank you. mr. murray i have a question or

two for you. i want to ask you about the proposed legislation that the v.a. has come up with, and i think ms. anderson made reference to it basically to let v.a. off the hook and say you don't have to follow f.a.r. anymore. for these kinds of contracts. and that really bothers me because one of the potential abuses that can happen when f.a.r. or something equivalent of f.a.r. is not followed is that there's a potential for cronyism or higher prices, sort of like soul sourcing of contracts, and the taxpayer isn't given the benefit of competing bids and that kind of thing. would you agree with me that the legislation, or i won't put it that way. are you concerned that the legislation v.a. is proposing could allow for those problems to arise?

>> i am. and i'm concerned about that sort of thing, fraud cronyism, pay more than you should across programs, whether it's travel or conference spending or whether it's pay roll, a major initiative to make sure that we pay roll is where it needs to be in terms of controls. so absolutely, which is why it's so important that controls that we suggested and perhaps more are required in this legislation be implemented. you know, reviews the control that i'm intrigued with is that we review these individual authorizations to see if they pass a threshold a million dollars annually, and if so we think right away, maybe it needs to be f.a.r.-based. we're doing a lot of this. >> well, the specific language that concerns me in the proposed bill says, quote health care

can be awarded quote, without regard to any law that would otherwise require the use of competitive procedures for furnishing of care and services, unquote. so to me that opens the door for potential cronyism. mr. frye, would you like to comment on that same question? >> that piece disturbs me as well. but i think in the background, there may be some additional information council down at the end of the table was involved in putting that together. but certainly, again, if you give us legislation that allows us to do something besides the f.a.r. i'm ambivalent but we've got to develop the rules, go through the rule making process, put those rules in place, and then we have to enforce the rules and hold people accountive. we don't hold people accountable for anything right now. you know we come down here. i read the newspapers every day. chairman miller says, you know

why aren't things working? why don't we follow the rules? it's because no one is held accountable. no one. no one has been held accountable at all for these violations of federal regulations and law in the courses of events with these obligations for fee-basis care, and i suspect no one will ever be held accountable. there are hundreds of thousands of these transactions that should have been ratified. there are billions of dollars that are being spent and we'll just sweep it under the carpet. >> well, i'm truly concerned about that, mr. chairman. i appreciate your leadership on this issue and i yield back. >> thank you. mr. o'rourke, you're recognized for five minutes. ms. rice you're recognized for five minutes. >> thank you, mr. chairman. i want to follow up on ms. custer's line of questioning in terms of the v.a.'s position that was stated previously that

following f.a.r. would impact a large number of veterans by compromising immediate access to care by providers. forgive me if this was already spoken about, but do you share that? >> i share very much a concern. again, unless i know more about how a f.a.r.-based system would work for purchased care for non-v.a. providers and i know how long that takes to execute these contracts, i can't give you an answer. if i had that i would -- my concern is that it's going to take a longer period of time to do. in the meantime, that veteran, the access that veteran has to the non-v.a. provider is going to be degraded. >> so we have to figure out a way to either not have f.a.r.

apply, right and implement your recommendations -- >> it wasn't our recommendation on that particular aspect. but you know listening to all of the dialogue here, and i think that whatever -- we have to know some facts first about how the system works. >> where can you get the facts from? >> what? >> where can you get the facts from? >> well, first of all, you know for the care that's given, by the way, pc-3, 80% of the veterans used the pc-3 network of providers, it would solve a lot of your problems. but they don't. very minute number currently use it for a lot of reasons. any case -- >> you think that's the answer? that could be one of the answers? >> one of the answers, certainly it is. it is. and for every other form of

care, you have this issue of what is f.a.r.-based and whether we're doing this illegally or not. but the remedy has to be once you know the question with clarity, not only on the accessible care issue but also the cost, as i think that the impact on the acquisition work force, the v.a. would be potentially quite a bit more in terms of having to hire more people. you have to get those answers first, and i haven't heard it here. >> well, that's the problem at these hearings. a lot of questions are asked and very few answers actually are received. thank you. i yield back. >> could i follow on your question please? >> mr. chairman? >> sure. >> so i find myself in complete agreementwilliamson

that wie have to provide the right structure that represents the interest of the taxpayer so it's balancing what's good for veterans and taxpayers. the answer to the question is of how we look at that and balance that, i'm going to work to put that together. i would love to meet with the committee and/or the staff as we do this and give you input but i have to find a way that allows us to balance this, meet the needs of veterans manage their access while representing the taxpayer and recognizing the federal acquisition regulations and all the appropriate laws. i own that for the department. >> thank you for that offer. >> i would like to thank the witnesses. you're now excused. let me just say it really doesn't matter how the systems change, because if you're not going to follow whatever system is there because you don't have the discipline, the leadership it really just doesn't matter. i mean, at the end of the day, there's got to be a rule of lieuaw

and this is just -- i think some of the witnesses today really demonstrated how lawless this organization is. you're now excused. today we have had a chance to hear about problems that exist within the department of veterans affairs with regard to oversight of its non-v.a. health care program. the hearing was necessary to accomplish a number of items. number one, to identify the continuing widespread problems with procurement of nonv.a. health care, two, to allow v.a. to provide answers as to why these problems still exist and have been allowed to continue for so long. and three to assess next steps that must be taken by the department in order to stem the continued waste of taxpayer dollars. and jeopardize services provided to veterans. i ask unanimous consent that all members have five legislative days to revise and extend their

remarks and include extraneous material. without objection, so ordered. i would like to once again thank all of our witnesses and audience members for joining us in today's conversation. with that, this hearing is now adjourned.

a computer. you just happen to make it yourself. it has the playability, the intuitiveness and accessibility, but it's powerful. kids around the world have used it to use servers, to automate the position of a solar panel. kids using the kit have created and shared over 5 million lines of code. the idea behind the project is more to build and you kind of computer company, one that puts creativity in front rather than consemption. it starts with a simple kit, but from there you're building a hardware system with speaks. servers, radios. you're looking it up to the internet. i think it was inspired in many ways by the notion that making

learning and playing are all intimately connected and all of us have this curious and creative spirit of a 9-year-old inside of us. all you need are these simple steps, stories and affordable tools and you can break out. play can often become one of the greatest accelerants of invention in our view. >> here are a few of our featured programs for the three-day holiday weekend on the c-span network wrarb friday night at 8:00 eastern, radio personalities and executives at the annual talkers magazine conference in new york. saturday night at 8:00 an interview with new york times chairman and publisher, and executive editor on the future

of the times. and sunday night at 9:30 eastern, members of the church committee, former vice president walter mondale, and former senator gary hart on their ground breaking efforts to reform the intelligence community. on book tv friday night an author on how the increasing use of artificial intelligence could make good jobs obsolete. saturday night history professor carol berkin on why the bill of rights was created and the debates it spurred, and sunday live at noon on in depth, join our three-hour conversation with author and government accountability institute professor, he's written books on extortion, and throw them all out, and on american history tv friday evening at 6:30, the 70th anniversary of the united nations with california governor

jerry brown, nancy pelosi, and u.n. secretary-general ban key among. saturday night at 8:00 hear a lecture on the revolutionary war and how the individual personalities, supplies, and timing influence the outcomes of major battles and sunday afternoon at 4:00 on real america, a look back at a 1960 film featuring actor and performer joe brown about a nationwide search for old circus wagons and the circus world museum's effort to restore them in time for a july 4th parade in milwaukee. get our complete schedule at c-span.org. a preview now on some of the smithsonian institution's future projects. acting head albert horvath outlined the house administration committee's plans for the museum's kurbt and upcoming programs. he also talked about efforts to digitize objects in the collection and gave an update on

the museum of african-american history and culture currently under construction on the national mall that's expected to open in the fall of 2016. this is about 50 minutes. >> i now call to order on committee administration for today's hearing on the smithsonian institution. and we appreciate acting secretary horvath coming and all his staff coming in. we appreciate them bringing him. we appreciate them bringing him. before i make my opening statement, let me just say, i think we've all had an opportunity to look at some of the coolest things here. as you see, it's a bit unusual for committee hearing to have smithsonian artifacts here but everyone will get a chance after the hearing to take a look at them all. they are really unbelievable. i mean, you've got meteorites here, sort of makes you think of jurassic park.

the first heart, artificial heart. a picture smithsonian got off ebay of harriet tubman they had to do nothing to it was in such great condition. somebody took great pride keeping that picture. anyway, everyone will have a chance to take a look at these artifacts. we thought it would be a way to sort of set the stage, if you will, for what goes on at this unbelievable national treasure at the smithsonian. in fact, i told some of your staff when i leave here i'm going to try to get a job at the smithsonian it's such a cool thing. i'm kidding. but wow, really amazing. today we're holding this hearing to discuss the current priorities in the institution as well as challenges and opportunities on the horizon. congress established the

smithsonian institution in 1846 to carry out the will of english scientist james smithson. smithson sought, quote, to found at washington under the name of the smithsonian institution an establishment for the increase and diffusion of knowledge, unquote. since that time the smithsonian has developed into the largest museum and research complex in the world with 19 museums, nine research centers and, of course, the national zoo. the smithsonian collections include 138 million items which form the basis for the exhibits, educational programs and research activities. last year more than 28 million people visited smithsonian museums and national zoo. 99 million viewed their website. more than 6,000 volunteers joined 6300 employees for the work of the institution. the smithsonian is much more than our nation's attic. it plays an important role in collecting, observing our nation's history as well as advancing critical scientific discovery and research.

while the institution encompasses the renowned museums on the national mall, which all of our constituents appreciate visiting at zero cost, it also includes research facilities in panama, astro physical observatory, traveling exhibits across the u.s., and a strong international presence across the globe. size and scope of the smithsonian presents enormous opportunities to achieve the mission of continually increasing the reach of knowledge. this committee commends the smithsonian for unrelenting effort in identifying future opportunities. one major opportunity for the smithsonian is leverage collections for enhanced education and inspire lifelong learning. education is fundamental to the smithsonian's mission and certainly one of the most important services the institution -- the institution can provide. the committee is interested to hear how the smithsonian is revitalizing education,

increased digital access for 3d printing and plans for expanding those activities. also significant challenges managing complex entity such as smithsonian. one ongoing is serve as stewards of their vast collections which provide objects of cultural and scientific value and range in size, scope, and diversity from the smallest organisms and inspect specimens to various artwork mediums and live animal exhibits. fundamental to achieving institutions mission now and in the future. this committee held a hearing last congress and heard from inspector general who identified collection stewardship as one of the most pressing issues for the smithsonian. management indicated work was ongoing to improve current collections management and to plan for the future. so we look forward to hearing about that progress. in addition to collection stewardship and education we would like to receive an update on how the institution preparing for national museum of african-american history and culture.

that opening, which is targeted for completion next year, i believe, in about recent announcement as well regarding smithsonian exhibition space possibly being part of a cultural complex in london. the smithsonian institution is cherished by all americans. each of us feels a personal responsibility to ensure success of this valued institution in its continued operation for future generations. the smithsonian is truly one of the great treasures of our nation and the world and we look forward to the institutions continued service. so again, we thank our witness for his attendance. i'll formally intro him in just a moment. at this time i'd like to recognize, our ranking member mr. brady was not able to attend and recognize mr. vargas, our gentleman from california and represents him today for his opening statements. >> thank you very much. madam chair. again, i want to thank you. i think my microphone is having

feedback issues here. there you go. i apologize for that. thank you, madam chair. i appreciate the opportunity for being here and thank you for holding this oversight hearing and giving smithsonian a chance to show off some of its treasures early this morning as you were noting. again, thank you very much for that. this is a period of rising expectations for smithsonian institution. a new secretary will arrive in a few weeks and smithsonian african-american museum will open in less than a year from now. by the way it is magnificent every time my driver walked by there i get very excited. it really is looking magnificent. also historic national campaign, raising record amount of private funds for the institution and museum of american lutono within the smithsonian has been recommended by a national commission that will be reviewed by our committee this year. a proposed national women's history museum is about to be studied by another commission and visitors advance levels at smithsonian museum are about on

the rise. the value of the smithsonian endowment is record high and cost of admission to american people is still zero. i commend acting secretary. thank you very much for your ability to step in quickly and insure the continued continuity between the period between the secretary's departure and the doctor's transition out of cornell university. this is a busy season for our constituents who visit smithsonian during warmer months. we off hear from them how much they enjoy the experience. i have to say i was able to go recently to the national portrait gallery and was very excited to see the painting. of george washington, and also to see it my understanding is it's about to go in for some needed work, but it was very exciting to see those two magnificent paintings there. though i believe antietam, it's shared with boston museum half

and half, i think that's the deal, but again, i welcome you it's such a joy to have you here. we're very, very proud of your institution and the work you've done. thank you very much. madam chair, i yield back. >> thank you, do any other members wish to make an opening comment or statement. okay. at this point i'd like to introduce our witness, albert horvath became the acting secretary following the retirement of the secretary. he will serve in the position until the end of this month. we had an opportunity to have you in our office last month, i think it was. it was a fast-paced last several months and eye-opening and interesting. but as was mentioned, david skorton will take over as 13th. secretary of the smithsonian. as acting secretary, mr. horvath oversees thousands of projects under way within the smithsonian institution. before becoming acting secretary

he was under-secretary for finance and administration and chief financial officer of the smithsonian where he managed administrative offices including facilities, maintenance, human resources and financial operations. we are happy to say that's a position he'll be returning to as well following his tenure as acting secretary. before coming to the smithsonian in 2011, his career spanned more than 30 years administration at five different universities. we certainly thank acting secretary for being with us and at this time we recognize you for your statement, sir. >> thank you very much. chairman miller and members of the committee, thank you for the opportunity to testify this morning. in 1846, congress established the smithsonian as a public/private partnership dedicated to increase and diffusion of knowledge. 60% of our annual funding comes from federal appropriations, 40% from philanthropy and other sources.

the federal commitment provides the critical foundation for all that we do and is helpful in attracting private support. we are grateful that the continued confidence of the administration, the congress and the american people. i assure you the confidence is more than justified. the state of the smithsonian is strong. we are making great progress and will welcome our 13th secretary on july 1st, dr. david skorton, currently president of cornell, who will push for even more progress. since january 1st, i have been privileged to serve as acting secretary. upon dr. skorton's arrival, i will return to my previous post as under-secretary for finance and administration and chief financial officer. i will do so firmly convinced that the smithsonian is more efficient and entrepreneurial than ever. it is also more effective offering close-up authentic experiences of what it means to

be an american. for example, on may 8th, i stood at american history museum to witness world world war ii flyover celebrating victory. in europe day. i'm sure many of you saw the historic planes flying over the national mall. our national air and space museum director general jack daily participated. the former assistant commandant of the marine corps was in the mustang in the formation that executed the missing man maneuver. the next day some of the participating planes were on display at our air and space museums stephen f. center for all to see. the center also houses among many treasures space shuttle "discovery" which flew over national mall three years ago. online we offer a three-dimensional scan of the right flyer that any teacher, student or lifetime learner can download free of charge. as i looked west that day, i saw our national museum of african-american history and culture rising out of the ground.

museum curators have collected more than 33,000 artifacts including spirit of tuskegee airplane. the museum is targeted to open in fall of 2016. we continue to implement 2010 strategic plan that focuses on our four grand challenges. we have an agenda, first phase of west wing american history museum reopens on july 1st. the smithsonian american art museum's renwick gallery reopens november 13th after a significant revitalization. we can offer so much to so many people because smithsonian i the largest museum and research complex in the world. with passionate professionals and volunteers devoted to their work. we have 19 museums and galleries, 20 libraries, 9 research centers, the national zoo and 201 affiliate museums in 45 states, puerto rico and panama.

we're open 364 days a year and admission is free. we operate in more than 130 countries. if you can't come to us, we're coming to you through digital technology. more than 200 website attract 100 million unique visitors. we have 6.6 million followers on facebook and twitter alone. last year our museums and galleries had almost 27 million visits and another 4.5 million people visited our traveling exhibitions in all 50 states. our collections total 138 million objects including 127 million scientific specimens, 340,000 works of art, 2 million library volumes, more than 2,000 live animals and much more. some of those treasures you see on the table in front of you. we protect and present treasures everything from the star-spangled banner to the hope diamond, the portraits of george washington to the skeleton of

t-rex, edason's light bulb to nat turner's bible. we take stewardship very seriously as reported to this committee two years ago. since that time we've made many improvements and completed an in-depth study of collection space needs that will inform our long-term capital plan. our 500 scientists are making important discoveries, especially regarding biodiversity issues through forest geo for global earth observatory network. worldwide partnership monitoring the health of 6 million trees in 24 countries. our new tannenbaum initiative, marine geo seeks to replicate success and assess health of coastal areas and the oceans. we offer american, asian and african art. we deliver education materials to students and teachers in all 50 states. more than 2,000 learning resources all tied to state standards are available online for free.

for 30 years our smithsonian science education center has been improving k through 12 education in our nation's schools through its innovative stem program. we do have concerns about the age and upkeep of our facilities. particularly at our air and space museum, zoo, gallery of art, arts and industries building, the castle and other sites. we will need your continued support in those areas to ensure the vitality of these spaces, many of which are historic. our 6400 dedicated employees and 5400 generous volunteers are creative resourceful and dedicated to our mission. that is why for the fifth year in a row, smithsonian was ranked as one of the best places to work in the federal government. all of us are honored to be part of this great american institution. as we face both exciting new opportunities and imposing challenges we will carefully steward important resources

provided by the federal government. again, i thank you for this opportunity and i look forward to your questions. >> thank you very much. appreciate that. you mentioned that you had 138 million artifacts. you may or may not know, the miller family has a bit of history with one of those 138 million. my husband, who was a fighter pilot in vietnam over 30 years ago delivered f-100 super saver jet on display there. so all the old fighter pilots like to hang around and look at those old jets. that's for sure. remember the glory days there. my first question, looking through the strategic plan here. as you mentioned how you want to increase and revitalize education. i have a particular interest in that, as i think i mentioned when you were in my office, southeast michigan where i come