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and hard work. enter your submissions today. scan code or visit studentcam. org. the deadline is january 20, 2025. >> up next, lawmakers and officials from the v.a. also discuss the agency's 2025 budget and benefits for veterans. this is an hour and a half.

>> good morning. the subcommittee will come to order. i want to welcome my witnesses to discuss the lessons we can learn from the v.a.'s efforts to modernize its technology during the last two years. the v.a. is an organization of nearly a half million people that serves nine million veterans and their family members using thousands of i.t. systems and has a total budget of roughly $370 billion a year, making it second largest agency only surpass by the d.o.d. the scale of the i.t. systems are massive and presents a lot of challenges. the department spends years or decades and costs billions of dollars. this strategy has not worked well. all i.t. projects have either

suffered badly or collapsed altogether. and this should come as no surprise. i challenge our witnesses to point to any i.t. project anywhere with a budget this large that has been successful.

finally, the digital g.i. bill has missed its completion date and its final price tag will likely double as well. not only have these systems blown past their schedules and budgets, they're struggling to live up to the user's expectations. however, there are signs that the v.a.'s leaders are learning to be take different approaches. secretary mcdonnell had the good chance to pull the plug after its -- went so poorly. the second supply chain effort has been on indefinite hold since the subcommittee exposed its poorly defined objective and the life cycle cost estimate. finally, secretary mcdonagh and their teams came to their senses before moving forward with a nearly $1 billion human capital

management modernization contract. mega-projects sound good in theory but in reality, they're always overdue, overbudget and that's unacceptable for the veterans and taxpayers. at time when a v.a. has come to us with more than a $6 billion budget deficit, the department literally cannot afford to operate this way anymore. mega-projects are also incombattable with the best practices that took told the software industry more than a decade ago. i'm talking about agile incremental development, small scale deploys, testing by real users and component-based architecture. we're going to hear about successful use of these practices from our panel of independent experts and hopefully, from our v.a. witnesses as well.

we've also seen some encouraging examples when they are solving problems with smaller systems. they recognize the outdated benefit management system and they have been proactively seg men. and modernizing it in individual parts. as with most things in government, the larger project gets the harder it is to manage and the less likely it is to

ever deliver useful capability. i want to emphasize these lessons learned. we need to build up nimbler v.a. that's more responsive to the veterans' needs. i look forward to our witnesses testimony today to help us do that. with that, i yield to ranking over-man. >> thank you for our witnesses for being here today. over the course of the 118th congress, this subcommittee held 20 hearings, examining the i.t. modernizing efforts of the department of veterans affairs. most of the programs that were reviewed suffer from the same issues, poor requirements development, poor contract

management, and an overreliance on contractors to what is possible and what the department identifies as its needs the department is taking on too much. instead of attempting to modernize everything all at once, they should be thinking strategically and delivering one or two successful projects before moving on to the other. i worry that business-led i.t. projects are part of the problem. it seems to me that oit's role is not sufficient to keep the projects on frack the very going, causing monumental down subprime effects. this lack of involvement whether intentional or otherwise contributes to the poor requirements development which leaves to the significant contract overages we see in the projects like the digital g.i. bill all for v.a. to realize they aren't getting what they need out of the product. i also have major issues with the way i.t. is budgeted at v.a.

i.t. is frequently the sacrificial lamb when it comes to meeting funding for the mission. while this is not unique to v.a., we cannot allow this to continue. as more and more veterans become eligible for care and benefits at v.a., constraints require cuts in other places. and much of the software that v.a. uses is obsolete. we hear a lot of talk about government inefficiency. fixing them ensures that employees have the best tools to do their job which starts with fund negative office of information and technology. i look forward today to hearing the witnesses testimony. before i yield, there's a few people that they would -- that

we be saying farewell to. this will be the last hearing for assistant secretary dell benning, one of my favorite chairman, rosen dale and the republican subcommittee staff of bill madison who has been excellent. he has been with us with the subcommittee its its inception and has been a valuable partner in our efforts to ensure that v.a. and his employees have the tools provide benefits to our nation's veterans. we will be losing dell benning. i have appreciated your hard work over the last past three years. i would also like to save the best for last, which is wishing chairman rosen dale well wishes.

i thank the chairman for being one of those people for working with me so openly. i were you the best. thank you so much and i yield back. >> thank you very much for this kind words and appreciation from everybody, really. i will now introduce the witnesses on our first panel. ms. carol harris is the acquisition management at the government accountability office. ms. lynn olbermann is the executive director of the beck center at georgetown university. ms. over-man served in the u.s. digital service. and mr. ren told is the non-resident senior fellow for congressional modernization with the foundation for american innovation. he served as senior technology advisor at gsa and in top

technology roles in the house of representatives. if you all could please rise and raise your right hands, please. do you solemnly swear under penalty of perjury that the testimony is the truth, the whole truth and nothing but the truth? thank you and let the record reflect that all the witnesses have answered in the affirmative. ms. harris, you are now recognized for five minutes to deliver your opening statements on behalf of gao. >> thank you. thank you for inviting us to testify today on v.a.'s i.t. modernization challenges and lessons learned. and i also want to take moment to thank your outstanding committee staff and also wish best wishes to mr. mallson as well. as requested, i will summarize our efforts to manage it as well as our work on critical factors

leading to outcomes. the use of i.t. is crucial to helping v.a. serve our nation's veterans and the investment is substantial. v.a. has obligated over $21 billion for a range of i.t. products, systems and services. unfortunately, the department's management of it efforts continues to be high risk. this morning, i'll highlight two key points. first, we've made a total of 20 recommendations in recent reports to improve v.a.'s i.t. acquisitions and management and while v.a. has concurred, none have been implemented thus far. these recommendations address health care, financial management systems, i.t. governance and procurement. v.a. has to face long-standing challenges to deployolutions in two areas. its health information system and acquisition management systems. after three unsuccessful attempts between 2001 and 2017,

v.a. is now on its fourth attempt known as ehrn. but in 2023, v.a. prioritizing making improvement of the five sites use the system. at that time, about 79% of users strongly disagreed that the system enabled quality care. in our 2023 report, we made 10 recommendations to v.a. in areas such as use you are satisfaction, system trouble reports and change management. similarly in 2016, it had a third attempt to replace acquisition systems with one system. in 2021, we reported that full implementation of the new system was not expected until 2027 at a 10-year life cycle cost on the nearly $3 billion. as of july 2024, full implementation was moved to 2030

and life cycle cost escalated to $7 billion. our two reports made a total of three recommendations to stray on costing and schedule estimating. if v.a. i want lets these, the department will be in a stronger position to course correct the acquisitions it has underway. and now, to my final point. v.a. should consider all opportunities. we have preferably reported on nine critical factors that have led to successful i.t. acquisitions across the federal government. these factors include ensuring end users and stakeholders involved in the development of requirements and the testing of system functionality that they are stable and consistent among other things. these factors are common sense. but they are also easier said than done.

all too often, we have found the absence of these factors or the partial implementation of the to be the root cause of the issues. leading companies uses the approach to development brux that are relevant to their most critical needs. it brakes large projects into smaller manageable pieces. the critical factors in leading practices i mentioned serve as the basis for many of our recommendations to improve i.t. management. v.a. can rely on them to help achieve successful acquisitions. moving forward in the two areas, it will be critical to implement the recommendations.

that concludes my statement and i look forward to addressing your questions. >> thank you very much, ms. harris. the written statement of ms. harris will be entered into the hearing record. ms. olbermann, you are now recognized to deliver your statement. >> thank you. thank you for the opportunity to testify today. it is my honor to serve as the -- in senior policy and delivery roles the white house office of science and -- for more than a decade, the beck center affected people across the united states working alongside governments to build with more opportunity. rooted in the values of our home at georgetown university, we are

a network catalyst. our hub and advocate for policy making the modern age and training ground. technology modernization is central tour work. federal technology projects often fall short. plagued by ricard approaches to prioritize process over outcomes. these failures diminish public trust, waste taxpayer money, frustrate agency workers and prevent people from accessing services. when agency attempt to modernize -- one time, purchases that work upon acquisition. but software must evolve to keep up with the policies, secure demands and customer needs. technology modernization is a

continual process not a one time effort. too often, modernization projects are built in silos and outsourced to vend others who require a high cost contract. they are then overseen by agency project managers who not be experts themselves making it more challenging when projects go off track. the good news is that some agency can shifted from this management model to what we call product model with full ownership of product development and avoids the one size fits all solution that meets the needs of real people. the product model starts with a small nimble team conducted discoveries with the people who uses the services to deeply understand their needs and service delivery challenges the

software aims to solve by identifying high risk elements early. before investing significant resources in a full-scale solution. an example is the development of the direct file tool for the internal revenue service. the 2024 pilot served more than 140,000 people with 90% of users rating the tool excellent or above average to achieve this, the i.r.s. empowered their team started with a limited scope, developed the tool with deep user search and test wad small number of users. this process saved users time, money and resulted in an extremely high rate of satisfaction. what's more, the operational costs on thers to develop test and launch direct file were just

2.4 million. simply put, agency teams are positioned to identify and address barriers. to ensure that agencies can fully realize the benefits of the product model for technology modernization, i propose four recommendations that congress can work on with leaders. perhaps the most important recommendation is to ensure that agencies streamline hiring processes to recruit talent who can implement the model backed by flexible investments that support a people center approach affecting digital services. by adopting the these recommendations, they are quipped with the tool and

flexibility needed to focus on the -- [indiscernible] that meet the needs of the people ending the cycle of technology failures. >> thanks very much, overmann. reinstate will be entered into the hearing record. >> thank you. i am with the foundation of innovation but spent considerable time here at the house. i have extensive experience in that technology modernization

but i'm not a v.a. or i.t. health expert. so let me delineate that. technology should impair the -- empower the staff to problem solve. i want to briefly focus on three issues that i think would improve the outcomes at v.a. the v.a. leadership challenges improving the electronic health record modernization implementation and identify options to address future challenges in financial management and supply chain.

and place those subject it was in each executives performance plan to help create a more unified focus from v.a. leadership agency wide. the second issue that they should address is the tenure of the cil. i think with conflicts of interest to imagine, etc. his three-year term is about as long as that is going to be. the next administration should take steps to ensure that the cil has a tenure of at least five years. either a term of employment or some other process to accomplish that. when you look at the record of the electronic health record

modernization project, it would appear to me as an outside observer that the processes vary step-wise. there's six implementation in chicago is apparently the first one with a community care center and that process of moving patience from the care center to clinical care and back again had been worked out in the legacy software but was an issue in the implementation to avoid a repeated discovery as these project is implemented across v.a. and recommend that the employment man, a look at how to operationalize all of the functionality to discover what it is across all the centers. i think the fact that there's 130 instances of the legacy system reflects a broad dijerry

advance across the facilities. a key milestone, i think, is reaching a point where all of that functionally is running successfully in at least one facility. so it's not a hypothetical and it's not a pretty power point slide. you know, looking at the supply chain issue briefly, it sounds like in these repeated failures, these are the monolithic project, one thing i would note is that the [captions copyright national cable satellite corp. 2025] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org.] problem of failing to deliver creates a negative feedback and it causes a last train leaving the station phenomenon where everyone loads every capability

and every complexity. it's just their one chance in 10 or 20 years to get there -- their requirements into the system. that has to be fought with more inaccount and agile approach to the degree that it will be broke down into seven to 10 pieces, that's good progress. but the committee should ensure that each of those piece that the first piece is actually implemented and it's not another way to describe a monolithic -- monolithic approach that i would include my remarks and look forward to your questions. >> and the written statement of mr. schweickhardt will be written into the record. we will proceed to questioning and i will recognize myself for five minutes.

ok. ms. overmann, good morning, again. thank you again for being here. can you think of a multi-billion dollar i.t. project that a federal agency has ever completed on time and on budget or completed at all? >> if this is going to be a question and i will not say i did comprehensive research in the federal agencies, but i did find a successful project or two. and it's interesting because i think it reinforces the points that you made in your opening remarks. it was a cloud migration called the defense. it's an $8.9 billion contract to migrate securely to the cloud. i think the reason that this reinforces what we're talking about is twofold. one is cloud infrastructure is really functionally

infrastructure. it is something that you can acquire and deploy. it is not something that is aimed at meeting end user needs. so that has been successful and it was interesting because the way they rolled that out starting in may of 2023 was to roll out to 11,000 users to start. for some agencies, that might feel like a large amount but for d.o.d., that was a small starting point. so they did follow that model of testing with a small group of users and then rolling it out slowly over time. outside of those type of cloud migrations which i believe just provide things like secured data storage, access to different development tools and different kind of crm management, i was unable to find a single large scale i.t. project along the lines of what you're describing with the v.a. that has been successful on time or on budget.

>> thank you. mr. schweickhardt. can you think of one? >> i cannot, mr. chairman. >> thank you very much. ms. harris, what is it about the i.t. mega-project that makes them so risky and bron to failure? >> when you take that waterfall approach, you're developing all of your requirement and you're developing the system and when you deploy, that's when you realize it's not going to meet your mission need. and so you've already sunk in at that point hundreds of millions and possibly billions of dollars and you're set up to fail. it's too much risk for these agencies to take on. to go with that approach. >> ms. overmann, you make government agencies accountable for outcomes rather than a project model. that lets agencies pass the buck to contractors. what are some examples of the product model and the project

module so that the general public and understand the difference of what we're talking about. >> absolutely. i do think the examples that you provided of some of these six systems are very good examples of the project model and what the challenges are with that approach and i believe ms. harris just highlighted that. i'm going give a couple of examples of the product model. i mentioned the i.r.s. direct file. >> first time we've heard them mentioned in a favorable manner. [laughter] >> purely from a software and development standpoint, it was quite effective. i do want to point to another project that is another component of why this type of an approach can be useful which was the covidtest.org website launched in the midst of the covid pandemic. covid tests were extremely hard to find at the time. it was developed jointly by u.s.

digital service, hhx the u.s. postal service. they developed this tool in three weeks and they used existing infrastructure and there were a few components used. first of all, they designed with users in mind and made the application online as lightly as possible. they basically made a very simple form that took less than a minute to fill out. that did not on the back end, they worked with vendors who had demonstrated success in handling a high load input. and ingood on the first day, a million people applied and the system was able to bear that load. so that combination of thoughtful design worked in successfully with vendors and having a product vision owned by implementers was what made that project very useful.

>> very good. i am going recognize representative kennedy. >> thank you. thank you, chairman and thank you all for your testimony. thanks for your service to our country. ms. harris, in your testimony you talked about the v.a.'s i.t. budget. do you feel the budget is sufficient to support v.a.'s i.t. needs and ultimately the modernization efforts? >> i haven't scrub the full i.t. budget to give you that full response. but what i can say is when we take a look at these critical success factors for these large scale i.t. acquisitions, one of these factors that they have in common are having programs receiving sufficient funding. it's very important for these programs to have that. and so i do think that, you know, that in combination with other tools like having a working capital fund with money that the cio can use over

multiple years at his or her discretion is very important to give them that flexibility. but account is very important. and we can improve their cost and schedule capabilities so when they come out with these programs like ehrm or fmbt, we want the cost estimate boss to reliable and credible. that's critically important. so we have those recommendations for v.a. to improve that so when they come out with a budget request, the underlying programs have reliable estimates behind its backup. >> and as far as the v.a. i.t. acquisition efforts go, what are the biggest steps that the v.a. could take to improve? >> that will set them up for

success. also, i also agree with my panelists that having end users involved in that process early and often especially for testing is vital. we've seen success case where is agencies have built test labs where they bring the users and working on prototypes and they're testing on in real time early and often and that is a great predictor of success. >> thank you. to your knowledge, is there a single office or official responsible for tracking open recommendation from g.a.o. or oig? >> i'm not aware of that. i'm not sure. >> do you think it would be beneficial to have a single identity? >> i do so. a single point of accountability would greatly improve v.a.'s track record in closing out our recommendation as well as the

ig's. they have that substantial backing behind them to ensure that these recommendations get implemented sufficiently. >> what do you think v.a.'s biggest weaknesses are with the lack of compliance? >> with regards to it, one of the main things is for the cio to review and approve all i.t. contracts going through the department and based on almost recent work in that area, it looked like roughly 39% of those i.t. contracts were going under

the radar. so, he was not in a position to even be aware of those contracts coming through. so having automated processes that ensure that those contracts hit his desk first so he can review it and make a determination whether or not they are merited, that would be a good thing and we have an open recommendation relative to that. >> and so as far as the v.a.'s addressing his concerns and compliance, what is your suggestion? >> that, again, we have 20 open recommendations. they should implement those 20. >> and in regard to -- i'll yield. i'll come back. >> thank you very much. ms. overmann, why are the v.a.'s mega-project stuck the project

model and what problems does that create? >> certainly based on my experience that the white house working on delivery, i do think the key problem is what has been indicated by my fellow panelists which is this model of starting by trying to project over very extensive timelines what the ultimate end product is, all its functionality and gathering those requirements, handing them off to a vendor and hoping that five to 10 years down the line, cha is implemented or provided back if it is provided back works. if you think 10 years back like cell phones, for example. how much have cell phones changed in 10 years? it is almost certainly not going

to be -- i do want to emphasize. i appreciate ms. harris's obviously extensive expertise in the space but a key component of this making the v.a. successful is obviously the more technical piece but having this internal capacity, these product development teams to oversee these projects so that there is a single owner or a team that is well versed in agency mission and goals in these modern processes that own the product vision and then manage vendors on a much faster and more modular timeline is a key to success. >> very good. thank you. ms. harris, are the mega-projects inherently incabell with some of your best practices? what i'm trying to find out is where do we have these conflicts coming in? it's like would you recommend best practices in the way they're developing them?

>> yeah, they're entirely in conflict with best practice and what we've fiend both in the public space and the private sector. we want them to be broke down into these small pieces and a large part of that is the lack of having users the end users involved in that process early and often. the last thing we want is to have everyone throwing on their wish list of items. as long as it's prioritized and they've gotten by from the end users, that's when agencies are able to break them out, these large projects into smaller pieces and deliver quickly. >> very good. mr. schweickhardt, the v.a. knows how to design i.t. systems and agile modular way. we've seen that.

it's not a technical problem anymore. what three cultural and managerial obstacles preventing them from doing it more often? >> so i think two things, mr. chairman. one, the legacy projects that have been running, the approach hasn't gone back and taking lessons learned to update how they deal with legacy project. i think there is a trust issue with my outside impression because projects haven't delivered in a timely fashion. there is that tendency to load everything in. and i think that one of the things -- >> so when you say the trust issue, break that down from me. from the people that are responsible for developing -- >> from then users, from the

employers that -- >> ok we're not going to get another delivery for an extend period of time. so let's go ahead and add everything -- or request on right now? >> that's right. and is there a little bit of burnout, now we're on the fourth try and nothing happens. so why should i really participate? because i'm busy. because this trial is probably going to fail as well. so why do i need to get involved? and that's a management and a culture challenge. i think the other challenge is build one used -- to say we're going to build this and there has to be user input. but everyone needs to take it and secondly, the phrase from my soy colleague at gsa, minimal viable product is a short hand way to say build just enough for it to be useful, get it into people's hands and integrate but

whey need to do that enough that people believe it's going to work. they have to build that trust. >> very good. thank you very much, mr. schweickhardt. i now yield back to representative kennedy. >> thank you, chairman. ms. harris, back to you. thank you. as ranking member mccormick indicated in her opening, we are concerned about the business-led modernization effort. has g.a.o. done any evaluation or do you have an opinion on how effective business-led modernization is versus oit led? >> i've seen a mix of arrangements whether it's business led or soy led. i think the critical key is for both to work in partnership together in close collaboration so that's, again, those requirements are being flushed out appropriately and that there's adequate engagement with

stakeholders and end users. that's the key, rather than who is leading the effort. >> do you think that oit should have a bigger or a different role in the modernization efforts at the v.a.? >> i think that oit should be involved as early as possible in an effort that's led under vha or vva, for example. that's their involved in the acquisition phases so that they understand and that they get end users even involved in like before the -- before we're even talking about contracts so that requirements are adequately defined. and i think oit understands or has a better understanding of what best practices in oit actions are so they should be involved in that process to be able to lead those discussions effectively. >> thank you. you identified failing to

conduct deep user research as a risk tock successful technology modernization. i associate this with v.a. struggling to do comprehensive requirements, development. how do you think an agency like v.a. could or should improve upon this? >> i think you're hearing a lot of agreement here on this need for user research and it has to be in combination with small starts. so start small. build the minimum viable research and get it right. there's a hidden benefit as well. this will make for more successful longer term development. and also very early surfaces if something is not viable. so you can stop projects that are not going to work before they get several years in and multi-billion dollars in. there's really two users that we need to test for, the end users of the product, but also the

agency staff. because the agency staff as mr. schweickhardt mention how frustrating it must be for people who are trying to serve veterans to have to deal with this clunky so i have ware -- software that are getting in the way of the services that they're trying to provide. so there's kind of -- i can't imagine that everyone isn't frustrated by the current status. the other value of starting small is that the implications of being unsuccessful are much pleasant impactful. >> thank you. you also indicated that you have thoughts on the budgeting and appropriations process. and how they should be changed. can you expand on that? sure. i think honestly, the that you're going hear from me repeatedly is how important it is to have digital expertise in the government. and i think for two key reasons, ms. harris mentioned how valuable it is to have oit involved. if they don't have it, it's going to be very difficult for

them to be actively involved that the v.a. manages and should be working on. the other thing is the flexible multi-year funding to ensure that as these projects and products are developed over time, they're not hall halted or slowed down by your year-to-year money challenges. i think those are really the two key things. and i do think the other benefits of modular develop is you're going to have a much more consistent spend over time as opposed to getting these huge spikes around these large development projects where you think you're making a one-time investment but as we've seen, that is a big dump of money to start. it doesn't work. there's another dump of money, etc. so overtime, we believe this product model approach is more cost-effective for the agency as well. >> thank you. i yield back. >> very good. thank you. ms. overmann, you've worked with

a lot of federal agencies. which ones do this well and what kind of culture or management structures do they have? >> you know, it's interesting. as you mentioned, i worked with the u.s. digital service. i think usds is the best example that i can think of and the reason for that is a lot of agencies again do, not have the internal capacity and often times what we would see is the teams would get called in when a crisis point had hit. we are seeing a growing number of digital service teams evolve. i believe d.o.d. is further along. i think dhs is further along in having enough digital service capacity to do these things on their own without having it rely on that external support. and i think the interesting thing about d.h.s. is they also have a very large customer

experience office. and we've seen those two things in combination. the digital service engineering product development expertise plus customer engagement experience to be a pretty potent model. >> more like the private sector does. >> exactly. exactly. >> their focus on customer service. >> yes. >> very good. very good. thank you. ms. overmann, how do agencies get in trouble when they buy commercial off-the-shelf software as the v.a. has done with the h.r. and cgi momentum financial system? >> again, i feel like a little bit of a broken record here. if you start with end users from the going, it is entirely possible that a commercial off-the-shelf system could work. but you have to be very careful in understanding what those systems are offering and does it fit with what you're trying to solve for? there are some downsides to cots regardless of the fit. one, it really only works if the

agency is capable of adjusting its progresses and workflow to meet the colts system. and two, you end up paying for functionally that you don't actually need because you're buying the whole package as opposed to having a customized response. generally what i have seen is you don't want to be absolute about anything. there are certainly cases where having the cost system might be the easiest way to solve for problems. if you are dealing with a lot of agencies deal with which is a user base that is not common the private sector or is not met by a private s.e.c. technology, you have the internal experts who can guide a number of different vendors towards meeting the end needs. so if there is any customization at all, you don't want to go with cots. the other challenge is a lot of

stow contracts mean you don't have access to the code. so you can't modernize it yourself. even if it's fit for purpose at the time of acquisition, three to five years, you're stuck with a system that you can't change. >> very good. mr. schweickhardt, do you think the health record modernization program reflects a modular approach? >> i'm not sure it reflects any of those. i think the challenge is how to create an incremental or modular approach. and if i could touch back on one of your comments in your opening statement about underinvestment and infrastructure. you talk about modular approach. but you need a pluming or the architecture so that these different pieces can be installed easily, you know, that the door frames are a standard size so you can buy another door or a different door. and so, you know, with where

they are, with this system, with the electronics health records modernization system, can they fully validate the environments with small groups of users at test lab would be helpful. but in my mind, the key milestone is they've got all the functionally implemented once which means in the other centers can come and look at it and say so this is what we're going to go do. >> right. >> and we're not going to mess around every time we come to another center and say, oh, we need to change this because i like, you know, vanilla instead of chocolate ice cream. but they've done enough exploration and enough demonstration and validation in the real world this really works. and we can roll it out rapidly to the remaining centers. >> makes sense. as a matter of fact, i am sure

that you all can go back the statements that they made going back to as long as three years ago. we want to have a fully functional system at one facility before we start rolling it out on others. i've used my time and i think that we are finished with this panel. ok. this panel is excused from the witness table. i want to thank you all so much for coming in today. and taking the time to answer questions for the committee. and we're going to go ahead and switch out the next panel. i'm going to go ahead and introduce the next panel as everybody is switching up so that we can utilize this time as efficiently as possible. i'd like to now welcome the witnesses on our second panel to the witness table. first one from the department of veterans affairs, we have the assistant secretary for information and technology and chief information officer mr. curt dell benny.

good to see you with us. we have mr. robert -- that benefits in memorial portfolio director and mrs. sherry waters. the portfolio director at the office of information and technology. once we are all situated just like every meeting, we've had you seated. now we're going ask you to stand back up again and please raise your right hand. do you solemnly swear under penalty of perjury that the testimony you're about to provide is the whole truth, the truth, and nothing but the truth? thank you. and let the record reflect that auto witnesses have answered the affirmative. mr. dell benny, you are now recognized with five minutes. i understand we have a little bit of extra time. >> thank you for the opportunity to testify on this critical mission to build a world-class

i.t. organization to support the critical work of the depp of veterans affairs. i've been accompanied by two directors in sherry waters and mr. problem benefits of memorials services portfolio. over the past three years, oit has transitioned from a traditional i.t. approach to a modern organization patterned after high-tech product development practices. this motto aligns with our broad range of products and services to stakeholders and veterans. while we've made progress, much work remains to be done and the ongoing support will be essential in advance of this transformation. oit sets a reliability standard of at least 99.9% of time across all critical systems and services. we've made significant steps towards creating a flatter portion structure empowering teams to take ownership with their work. this transformation fosters more

agile environment and allows for more efficient allocation and improves the needs of stakeholders scening the overall veteran experience. oit focuses on developing a list of i.t. investments. this improves management of resources. these efforts ensure that every dollar spent benefits the veterans through improved services and support systems. in the past three years, we've made strides in our major i.t. programs and projects enhancing the services we provide veterans through focused efforts in , financial management, and education. most critical technical priority is cybersecurity. we have refocused the team from merely executing cyber as a policy and compliance exercise to a risk-based approach. we have embraced a zero trust

strategy achieving over 90% enforcement multifactor authentication, encryption in transit. a cornerstone of our efforts in supporting streamline claims processing for veterans. 2020 four alone, processing 90% of the claims with established timelines showcasing our commitment to creating a user centric platform that empowers veterans. to our efforts to improve the veterans with digital experience, oit has successfully launched the healthy a application downloaded 2.8 million times, actively used by 1.2 million veterans each month. we also supported millions of monthly visits to v.a.. go to and customers receive the same information regardless of how and where they interact with the v.a. the initiative has undergone a door reset since early 2020 three, focusing on integrating user feedback into systems designed. we have planning a restart of

deployment efforts in 2025 ensuring that our electronic health records system meets the needs of our veterans and staff. modernize financial management processes across the v.a., enhancing our ability to manage our resources effectively. as of november 2024, we have successfully completed multiple phases of the initiative resulting in a more agile financial management system. our work on digital g.i. bill has resulted in technical advancements that ensure timely and accurate delivery of payments and benefits information for veterans. this initiative subdivides our effort to reliability and delivering essential services. while we celebrate the successes, challenges also lie ahead as we continue our modernization efforts. enhancing the technical skills of our workforce is a vital and adapting to evolving cyber security threats. oh must also navigate the complexities of modernizing supply chain and hr systems.

our effort in modernizing be a supply chain management systems have made slow progress and we are committed to leveraging a more liberal and incremental approach. likewise, hr modernization need sustained investment beyond the current implementation. the enterprise human capital management modernization efforts aimed to enhance the employee and user experience while ensuring information transparency. continued investment in oit's major initiatives is essential to building progress we have made over the past three years. these initiatives are crucial to fulfilling our mission to provide secure and effective i.t. services to support veteran care. above all, we in i.t. must continue to hone our craft, focusing on a clear vision developing copperheads of roadmaps and being relentlessly focused on the operational excellence. investing in our people, our greatest asset, is key. we have made great strides but the work must continue into and beyond the next administration. chairman rosendale, ranking

member cherfilus-mccormick, members of the subcommittee, thank you to provide -- this opportunity to provide this testimony. i extend my deepest appreciation to the subcommittee for your oversight, tension, and unwavering support of our nation's veterans. i look forward to your questions. rep. rosendale: thank you, mr. delbene. the written statement will be entered into the hearing record. we will not proceed with questioning and i represented -- recognize representative kennedy for five minutes. rep. kennedy: thank you, mr. delbene, other panelists, thank you for being here, your service to the country. i have serious concerns about the size of the v.a.'s fiscal year 2025i.t budget. i understand you do, as well. it is clear to me the budget will not just keep the lights on, it is going to severely curtail many of the departments modernization efforts. do you believe that the funding

for next year's levels are sufficient? mr. delbene: thank you for the question. i do not. as i have talked about in the past, the budget is down in a significant way from the previous budget but even a flat budget in this environment of growing security threat, need for monetization you talk about, that would not be sufficient. some of the key highlights i would flag is development is down 99 point 2% in funding. staffing services are up 5% but much of that is covered by an increase of the actual net increase, the account is zero essentially. modernization efforts down 66 point 5% over 24. one critical area is readiness program, off 65% through the current budget. that is the rolled out on a sustained basis of new pcs, etc.

fmbt program is down 63%. enhancements down 87 .7%. across the board what you find with his budget as we are focused on sustaining what we have and not being able to move forward critical programs. it's a very challenging budget. rep. kennedy: so it is a maintenance budget. what are the short-term and long-term impacts of this so-called maintenance budget? mr. delbene: on a positive front, as i have talked about with our one to you and the prioritization, focusing on execution, we are figuring out how to make it work. a few things that i would call out. while we have a 20% increase in cybersecurity investment, transformation to a zero trust architecture which i firmly believe in and an expensive operation. i will be put out a pretty comprehensive roadmap that they asked us to follow in terms of

our implementation. we will not be able to do that entire deployment. we also have to make very difficult decisions about which programs to invest in modernization of. i would also say because of the good work going on in the pack act serving more veterans, the headcount levels have increased in the administration's. that means we have to pay for more pcs coming do more customer support. as a result, we are short in the field on the number of people we need to actually support folks. we are coming from a legacy of very good customer support. our user satisfaction in the field is very, very good. i worry those numbers will come down as we are spread more thin. rep. kennedy: thank you. if you have the ability, what would you do to restructure the oit budget? mr. delbene: i think it just needs to be at a higher level. there is the opportunity to have money that goes over multiple years, however, i should point

out, the common theme in this hearing of incremental, what i call big bang development, i fully agree with that. what it means is not if the budget were larger, we would have super large expenditures in either program, it would mean we would have an adequate investment across modernizations , broad set of modernizations that we would do an incremental approach. that kind of sustained budget at that kind of, whole notion of an mbp followed by an investment on a year-to-year basis, getting us to a point where systems are what we call evergreen which means you are always doing an incremental amount of improvement every year, that is how i would like to see the budget followed that structure as well. rep. kennedy: i will come back for more questioning. rep. rosendale: thank you. mr. delbene, good to see you again. thanks for coming before us. v.a. started to develop the veterans management system in 20

13 to digitize the paper-based claims process. the system was a disappointment for many years, but in 2022, you changed your strategy and the vbms has noticeably improved. explain how and why the v.a. changed its strategy with vbms. mr. delbene: i am proud of the work that has been done there. i will pass over to rob or if you see in that but a couple of things i want to highlight first. when i came on board, kind of a focus around operational excellence, we looked at the uptime of the system and made changes in terms of our scalability to make sure that we would just not fall over as the demand was continuing to increase. we have gotten vbms to a point where it is a highly reliable, optimal system, which is the first key. the second key is going to this notion of creating a target

platform for the modernization where you want to go and then incrementally getting there. we have this new program called bp. we want to move everything there but you don't do it at one time. rob, you want to take it from there? mr. orifici: thank you for the question. in 2022 and earlier, we could only release a version of vbms once a quarter because it was so large, so many pieces needed to be tested, gone through and fixed as the bugs were found, it didn't make sense to continue in this model in which we had to wait so long to get a piece of it out. we looked at the very strategies we could take before releasing vbms faster and good and capabilities into the field, testing individual parts without having to retest the entire system. that led to the modular approach that we are taking with vbms today. we can work in smaller modules. the parts make up the whole. we can deploy. right now we are deploying

functionality every two weeks and we have a very ready, agile system to make sure they have the functionality they need. rep. rosendale: thank you so much. mr. delbene, in 2020 three, the v.a. was soliciting proposals for a $9 million project to replace its human capital management systems. you recently abandoned the idea and now you are considering a modernized in-place strategy. why did you decide against the megaproject, what is your strategy now? mr. delbene: i think there are two aspects. the first is the austerity environment we find ourselves in. we are not going to be able to go out for a very large bid for the entire hr system to a new platform. moving to a new platform is important. the current system is an on premise system. all the major vendors are moving to a cloud-based platform. i should note the contract, if you look at it, at the notion of minimal viable product in it. basically said we will, create a

pilot it will do just the atomic functions necessary. we would only pay for that milestone. with fiscal austerity as it is, we are moving to a model that says we want to find, similar to how we are doing with vbms, find that new platform we want to move to, cloud-based platform, figure out how to take a small modicum of functionality from the process flow, recruit to your off board at the end of your career, take a slice of that, figure out how to move that to a modern platform, and then figure out how to move the other pieces online. that will change the notion of funding as well to be a very incremental thing over time and we will come to you in the future once we have figured out the strategy, this is how much we will need in each year, to do that continuous modernization. rep. rosendale: very good. thank you, mr. delbene. earlier this year, the v.a. was planning another project to consolidate 63 systems at a cost of over $9 billion.

why did you decide not to move with this project and how is the current strategy better? tell us the improvements on that. mr. delbene: early on, it was the target environment. it was being used by the dod, also felt that sharing catalog of inventory elements would be a good synergy across those two organizations. i think we lacked a clear understanding of what the gaps in the systems are today from an end-user perspective and what an incremental approach may look like to improving our supply chains approach. i think we are stepping back and looking at that now. let me pass to cherri waters who has been involved in the project. ms. waters: thank you very much for the question. i'm actually really excited to tell you about what we are doing in the supply chain initiative. very much like we heard about in our first panel, we are having a

very and user focused approach and we are doing an iterative strategy. recently brought a group together and we looked at what are the most challenging problems that we want to resolve with the system. then we had teams take them back and evaluate all of those top 24 that were identified from a people, process, and technology perspective. by looking at it in that way, it helps us begin to prioritize how we get quick wins so that we can deliver a minimally viable product, improve on products we already have in place, and work with our partners to improve processes at the same time. rep. rosendale: i will yield back. i recognize representative kennedy. rep. kennedy: thank. mr. delbene, i'm concerned the v.a. has a shadow i.t. or i.t. modernization happening outside the office of information and technology.

what authority do you as the cio have over these business-let i.t. efforts? mr. delbene: i share the concern and we have worked closely with the administrations to come into a better partnership there. the authority i have, the leverage points we have really tried to drive around the authority to operate process which says if you are going to be on the network, we have to review specifically from a cybersecurity perspective but we can broaden that approach as well. and then fitara review as well. the points around whether everything goes through the fitara process is one where the gao work was good to survey projects, to see how many do and don't. we've been working within our offices in strategic sourcing oit to put processes in place to make sure more and more goes through the fitara process. i'm a big fan of the fitara

process because it gives us the ability to review everything as it comes about. the capabilities to do the technical review of these projects is not strong within the administration's. they would recognize that as well. we have reached out to those groups and said we want to play a bigger role in doing a bigger role in doing the technical oversight of those projects. in most cases there is a receptivity there. the work in particular in the g.i. bill has been good. let us get more involved. let us review the release plans, make sure that they make sense, that we do that iteratively. there is more for us to do. shadow i.t., we call it business-let i.t., is a big concern. rep. kennedy: how would you restructure these efforts going forward? how do you think it would improve the v.a.'s success? mr. delbene: my biggest concern over all bar none is cybersecurity. the sacredness of the data we

hold is held in trust, and we have to make sure. the first thing we are pushing for is our policy 65 requires that people purchase software that is cybersecurity. we are holding people accountable for that. that means you need technical resources on your program even if it is a business or i.t. program to actually assure cybersecurity. it is our goal to review that. it is not our responsibility to ensure the development you went through is a secure one. second thing we are doing is, and we are doing this at a pilot level right now, is we are engaging in drafting eight and operational agreement with the administration that says not just in cybersecurity but operations as well, we will do this, you will do that. we will work together in these areas in these ways. we did a lot of this in the commercial sector when we had

the windows team working with the office team, delivering together. we have to come to a common operating model that says these are your responsibilities, these are ours, and this is how we work together. my first approach which has been very iterative has been just to clarify by virtue of a memo and policy what the responsibilities are but we quickly found it is much more complicated in a back-and-forth thing, so this operating agreement principal works better. rep. kennedy: thank you. i yield back. rep. rosendale: thank you. mr. delbene, in your testimony, even in the questioning, you described taking an incremental approach as opposed to a big bang solution. why should big bang solution to be avoided? mr. delbene: the whole notion that you can determine exactly the cost of a program, the precise requirements for a program of a large size from the beginning is just very fraught. once we get involved in a

project, things evolve in terms of the requirements, new requirements emerge. the technical complexity of the project invariably increases. so this notion of building a minimum viable product that you can build upon and build success upon success, it basically allows you to hone what you think you will deliver more broadly, but it also builds on success from people's minds as well. they see it rolled out, initial difficulties, they see it getting better, and they start getting excited about the project as well. i completely agree with the sentiment of the first panel but there are very few successes from big bang solutions. this is true in the commercial sector, as well. rep. rosendale: you have had the unique experience of operating on both sides. mr. delbene: we have had our share of big bangs on the commercial side as well. rep. rosendale: mr. delbene, clearly learned some lessons in vbms, hr, moving toward a more

agile, less risky approach. we are also arguing plummeting this? mr. delbene: ironically, where we are ending up in the ehrm program is an incremental approach. if you look retrospectively, we have established six locations where it is today with the pause we are resetting to get it right . hindsight is 20/20, but you probably should have done that from the beginning. scope of the project from the beginning should have been this first pod, and then you would broaden beyond that. i think it's the model we are using everywhere. even if fmbt -- it's been talked about as big bang. it is not really. get the blueprint of the financial transformation right, start with some of the core offices and add vba. that thing we will have to do in the future which we are just

doing with the central offices in the first to central office first is the rollout. that will be complex. but i don't think it is completely accurate to say that it was a big bang project. the other thing i would say is the nature of erp projects in general which is what that program is. it is a big commitment. there is no way to absorb halfan erp transformation. i did half of the transformation at my previous role at microsoft. there we were consolidating 34 different erp systems into a single global system. but the target was one single large system. you just have to do it in an incremental fashion. rep. rosendale: very good. mr. delbene, six years into the fmbt, ehrm systems, is it too late to change them wholesale to make them more agile? mr. delbene: as i said with fmbt , i think it is pretty agile.

the challenge is it will be an expensive program. it is an essential program. every successful organization has a strong financial management system. as has been noted, ours is 30 years old. it is time to do fmbt, but it will be an arduous process to get it done. i think it is important, in the approach we have taken, annexing they will do is take a particular visn and use a willing visn that is excited about the project and getting that right. they are focused on process transformation that has to happen in concert with the actual rollout. that when i think will work on it will take time. on the ehrm, we just need to get the criteria are right, get the situation right, where we are, which is what we are working on. after that appropriate time, we will do the planning to move onto to another set of visns and

locations. again, cost, get that right. there are good signs there, too. the level of the climate has been good, received well, and that's a good sign. but that will be hard work, too. rep. rosendale: additional staff available to them to give them that support, which again, when we start to look at the total cost, that has been a big part of the problem. we don't have just the over run the program itself but the incredible additional staffing requirements that have been necessary to try and even implement the system. so when will we start seeing the results from some of these changes? mr. delbene: i think we are already seeing some of those. for instance, in fmbt, the success of the project so far has been good, the up time of the system has been strong, as well. in many ways, fmbt, a very large

project which is not easy to do, has been fairly successful. we are seeing on the ehrm side greater stability and uptime of the oracle system. they are meeting requirements on uptime, free time, and user responsiveness as well, so those are good signs. the harder work, and this is ironic to say when technology is so hard, the process aspects of that. getting the system to meet the processes. this was spoken to before. there is a lot of diversity in the processes even across the visns. another thing is process standardization within ehrm. that has been a big part of the work, as well. as the secretary said, you should expect to hear from us about a restart within the fiscal year 2025. rep. rosendale: mr. delbene, why is it so difficult for large government agencies and the v.a.

in particular to implement these mega projects successfully? mr. delbene: that's a very good question. i think mega projects are difficult to do any time. i think it is probably the industry minimizes the complexities involved. we go out and asked for a new system which probably we should say we only want the m.v.p. people on the industry side say we have a solution for you, it will solve all of your problems. that probably sets the expectations of folks to hike in terms of the simplicity of doing it. i think cost estimates are part of the problem, that they tend to underestimate the cost. to your earlier question about have you ever seen a program that didn't overrun costs? part of that is as you get into the complexity of things, things become harder and more expensive. part of it is the underestimate of the cost from the beginning. lifecycle estimates, cost

estimates almost invariably increase over time. i think it is tempting to say this seems easier than it is. you just have to be very wary. these are very complex projects that have deep infusion into how the organization works, and that is not always thought about. the final thing i would say, we need deeper technical expertise within our i.t. organizations, so that -- i have seen a lot of bad programs in my life. i am constantly wary. great leaders that i'm with today are constantly wary of these challenges that come up. we need more of that. rep. rosendale: from my view, it seems, quite frankly, like bad legislation. you take a piece of legislation and you continue to pile everything on it because everybody thinks it is the last opportunity to get a bill passed. when you end up with is a really big, ugly, unworkable piece of

legislation. that is the problem with the city, quite frankly. using that in relation to software, if people think this is the opportunity that we have to fix, and everybody starts trying to throw their piece into there as well, and becomes an unmanageable great, big mess. instead of listening to the experts and saying, we will take a component of this, make sure we have that right, then we will take the next piece and build upon that. mr. delbene, you inherited ehrm, fmbt, all the other mega projects, decisions that were made before you arrive, which stinks but is the nature of the beast. if you could go back in time and start over with one of them, how many of those would you design, start differently? mr. delbene: the critical question on ehrm as we have discussed in the subcommittee is

modernization of system versus building up a new system. there are real values of building a commercial system but it is a very difficult debate. you could have debates on both sides of it. there have been failed attempts to modernize vista. this notion of getting vista into an incremental modernization where it is evergreen is, had i gone back, that would be the leading candidate on the improving the stuff side. i was not involved in the evaluation. only a few commercial vendors that the v.a. could have gone with on the cots side of things so i don't have that much visibility into helm that selection was made. but there are real merits of going to a commercial product as we have done. i think we are over the hump now and those merits outweigh the whole re-litigating this question of modernizing vista. we do need to continue to modernize vista because it will

be with us for some time. given where we are at, i would have, certainly now, would have continued with the rollout of oracle. fmbt, by nature, is an incremental effort. i think they probably took the right approach. the one interesting thing is a choice of a system that is very federal government-specific, which is what cgi system is, but that makes sense because they have a large market share, unique aspects of what that means to the system for federal governments. those kind of makes sense. the supply chain and hr one, we should have been incremental from the beginning. rep. rosendale: very good. i'm glad to see that we are starting to get our arms wrapped around some of these, taking smaller portions of them and trying to get them functioning. taking individual facilities and getting them to work. as i say, if you talk to a

vendor, contractor, engineer, we can build a bridge from here to europe. is it possible? absolutely. but how much time and money will it cost? any of these things, sure, as far as a megaproject, the engineer, developers will tell you, sure, we can do that. they can eventually. but how many challenges and what is the cause going to be along the way? i would urge your successor to be skeptical of the contractor's promises, and hopefully stay on the same path that we have all worked together here to get us going down. because it has startedsome incr. i guess everybody is done. i had nobody give me any closing remarks so i want to thank the witnesses today, both panels.

the potential benefits of modernizing the i.t. systems are undeniable. with the right strategies eva will deliver health care and benefits to veterans faster and better, no doubt about it. but if the v.a.'s leaders keep repeating the failed ways of the past, they will burn through billions of dollars of taxpayer money, only to be left with dysfunctional systems that do nothing to improve services for veterans. today, the ranking member and i laid out the subcommittee's position based on all of the evidence we gathered in the past two years for how the v.a. should be approaching the i.t. modernization. v.a. should not be doing i.t. megaprojects. they just don't work. and they always turn into black holes sucking billions of dollars of the taxpayer's money into the contractor's pocket. put together, fbmt, and the digital g.i. bill are conservatively going to cost the v.a. at least $27 billion more

than what they were initially planned. no organization, and that includes the federal government, should be allowed to operate that way. this is just not our opinion. our expert witnesses the pitfalls of buying or developing software without a clear understanding of the organization and its requirements. they know that once a faulty project is set in motion, it is very difficult and expensive to restructure it. and i appreciate them pointing out that sometimes the best course of action with a project is just simply to cancel it, and we have seen that, and i appreciate it. v.a. witnesses also understand this. we have discussed supply chain, human capital, where you have wisely stepped back and reassessed the requirements and restructured the efforts in smaller, less expensive, less risky pieces.

we have also seen the v.a. begin to convert into a modern modular system. this is encouraging, but as long as the v.a. leaders continue to answer the siren song of megaprojects, i am afraid we will see more poor results, overspending, and budget problems. no project should be too big to fail, especially when it is failing because it is too big. finally, i would like to thank bill, his staff, sam, i understand he will be stepping up, everyone who is behind this who has helped us to this work. representative mccormick, the gao for all the information they have helped us with. secretary mcdonagh, i have truly enjoyed working with him and the v.a., and all of us working together to identify the problems that we are facing, and to make some incremental steps

towards resolving several of the big issues which have plagued the v.a. for years. have plagued the v.a. three years. and i will tell you it has been my honor to work with you and to serve on this committee. with that, i ask unanimous consent that all members have five legislative days to revise in extent remarks and include extraneous material. without objection, so ordered, this hearing is concluded. [captions copyright national cable satellite corp. 2025] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] announcer: c-span now is a free mobile app featuring your

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