By January of 2011, the parking lots at the 285-bed VA Medical Center in Tucson, Ariz. – the flagship of a Southern Arizona VA Health Care System that serves more than 170,000 veterans – are going to look quite different: They will be covered by large carport canopies made from silicon-based photovoltaic solar panels.
Beginning in the 1950s, the Veterans Health Administration (VHA) recognized that it would be dealing with issues of aging among the 16 million men and women who served in the U.S. military from 1941 to 1945. Those with an eye to the future realized that within 35 years, these service personnel would begin reaching the age of 65, all at roughly the same time.
In August 2010, REC Solar of San Luis Obispo, Calif., won the bid to design and install the largest carport-mounted photovoltaic solar system in the United States at the Southern Arizona VA Medical Center. When finished, the panels will stretch across seven different carports at the facility and provide 2.9 megawatts of electricity. When combined with a 302-kilowatt ground-based system already completed by REC, it will help to provide 5.2 million kilowatt-hours annually to the 900,000-square-foot hospital complex – enough to power 500 average U.S. homes for a year. “They think they’ll get about 18 percent of the medical center’s electricity generated through the sun’s energy at that facility,” said Edward J. Murray, the VA’s deputy assistant secretary for finance. “That’s about a $15 million project.”
The system will feature a single-axis tracking system that will allow the panels to rotate and follow the sun throughout the day, while the carport canopies keep the hundreds of cars parked beneath them considerably cooler. The solar array is just one of several solar projects announced by the VA – which, with funding from the American Recovery and Reinvestment Act (ARRA), is conducting solar feasibility studies at 31 additional facilities.
$15 million is a lot for a capital improvement project, but it’s just a small fraction of the $419 million in stimulus money directed to 302 energy-related projects at government hospitals in 2009, including renewable energy installations, HVAC improvements, energy conservation, and metering improvements. And the solar installation at the Southern Arizona VA Medical Center will comprise a tiny percentage of the total funding – $1.8 billion – the Department of Veterans Affairs has been pledged under the Recovery Act for investment in care and services to American veterans. The act, which was passed in February of 2009 as part of President Barack Obama’s economic recovery plan, has made for a very busy year at the Department of Veterans Affairs.
ARRA Funds: The $1.8-Billion Breakdown
Once the VA learned of its Recovery Act funds, it went to work quickly, assembling a team to determine how the funds would be apportioned to enhance the department’s ability to carry out its missions. Roughly, the VA decided to allocate its funding in this way:
- $50 million for the National Cemetery Administration, to help maintain its cemeteries as national shrines honoring the final resting places of veterans. Most of these funds, said Murray, have gone toward repairing sunken graves; realigning, repairing, or cleaning headstones; building new parking lots; and other facility improvements. Some projects are designed to make the cemeteries more sustainable – such as the construction of a windmill that will meet 100 percent of the power needs of the Massachusetts National Veterans Cemetery in Bourne, Mass., or drought-resistant landscaping and drip irrigation installations at cemeteries in desert locations.
In all, 391 projects are under way throughout the VA’s 131 national cemeteries – the final resting places for more than 3 million Americans, on 19,000 acres of land in 39 states and Puerto Rico. Some of the assets being improved are among the nation’s most historic monuments, including the Dade Monument at St. Augustine National Cemetery in Florida: three stone pyramids covering vaults containing the remains of 1,468 soldiers who died in the Second Seminole War.
- $50 million to the Office of Information and Technology, mostly to provide software development, staff, and equipment to help deliver the benefits of the Post-9/11 GI Bill – which require the processing of considerably more data than the bill’s predecessor, the Montgomery GI Bill. The IT systems of the Veterans Benefits Administration (VBA), said Murray, “are very aged and not very efficient, so the money is being applied to make system improvements to better support the education program.”
- $150 million to the VBA for the hiring of temporary claims processors and other staff to eliminate backlogs and to ensure the prompt delivery of Post-9/11 GI Bill benefits. About 2,700 temporary claims processors have been hired, and while the funding for temporary employees will expire in September 2010, the president’s budget includes funds to retain or replace these employees permanently, as well as to hire 2,000 additional processors.
- Between $500 and $700 million for the Veteran Economic Recovery Payments – one-time payments of $250 to eligible veterans and survivors to help mitigate the effects of the recession. According to Murray, nearly 2 million vets received these payments during the summer of 2009. To be eligible for the $250 payment, VA beneficiaries must have received compensation, pension, dependency and indemnity compensation (DIC), or spina bifida benefits at any time between November 2008 and January 2009. Also, beneficiaries must reside within the United States or Puerto Rico, Guam, Northern Mariana Islands, American Samoa, or the U.S. Virgin Islands. No application is necessary.
- $1 billion, the vast majority of the VA’s funds, will go to the VHA for the improvement of facilities where medical or long-term care is provided to veterans. About 60 percent of these funds will be used for non-recurring maintenance projects such as surgical ward renovations, new windows, and parking lot repavement; the remaining money will be used to target energy efficiency and renewable energy.
Given the size of the award, the VA was tasked with a kind of triage, to decide how to distribute the funds. “The secretary and his chief of staff [John Gingrich] and the deputy were presented with this very extensive list [of potential projects],” said Murray. “And they had to have some criteria. So their main focus, obviously, was patient safety, anything that would make the medical center a safer or better place.”
The other two major factors that would determine project funding, they decided, would be environmental security and efficiency – interesting choices, driven both externally – by Executive Order 13243, issued by President George W. Bush in 2007, and by the proposed Clean Energy and Security Act – and internally. Executive Order 13243 calls for U.S. agencies to have 15 percent of their existing building inventory incorporate sustainable elements by 2015. It also sets goals for the reduction of vehicle fleet petroleum use, the improvement of water efficiency, increased recycling, and other activities. The VA’s self-imposed goal to have 21 of its facilities third-party certified as “green” by the end of 2010 was realized before Earth Day, 2010, when it announced that 21 facilities had earned Green Globes certification by the nonprofit Green Building Initiative.
Even without encouragement from the White House or Congress, the VHA was eager to make its facilities more sustainable. According to the U.S. Energy Information Administration (EIA), energy costs for health care organizations are more than $8.8 billion annually, and health care facilities are second only to the food industry in producing waste. According to a study published in the Nov. 11, 2009, volume of the Journal of the American Medical Association (JAMA), greenhouse gas emissions from the health care industry make up 8 percent of the U.S. total.
The energy projects – which make up about a quarter of the nearly 1,600 Recovery Act projects at the VA – will help medical centers reduce utility costs, generate additional utility capacity, conserve water, and improve air quality by reducing their carbon footprint.
Several of the projects are, like the Southern Arizona VA Medical Center’s solar array, exciting renewable energy installations that take advantage of site-specific characteristics. Many of these are solar, as well; the Dallas VA Medical Center, for example, has 1,728 roof-mounted photovoltaic cells that tie directly into the hospital’s electrical system. By the end of 2010, the VA plans to have installed solar systems at 18 of its medical centers.
At the St. Cloud VA Medical Center in Minnesota – a place that does not enjoy a reputation for abundant sunshine – the VHA is in the design/build phase of a $4.7 million system that will exploit renewable resources more characteristic of the region: a $2.3 million wind turbine and a ground-source heat pump that will conduct geothermal heat to the facility for conversion to electricity. Together, the turbine and the pump will provide about a third of the facility’s energy needs.
Other energy projects under way within the VA using Recovery Act funds include a plan to use solar energy to power electric vehicles and a wind turbine to power lighting fixtures and upgrade boilers at New York’s Hudson Valley Health Care System, and a $140,000 fueling station at the Martinsburg, W. Va. Va., Health Care Center that will mix 85 percent ethanol with 15 percent petroleum. Several of the VA’s new facilities, including buildings in Reno, Nev., and Fort Harrison, Mont., meet the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) standards for construction.
As Murray pointed out, a project doesn’t have to be quite so sexy to be green. “When we go in and we replace a ventilation system or the boilers in a medical center, it is both green and an improvement in safety and efficiency. It does a better job of heating and cooling the facility. Some of these facilities have very aged plants. The same is true of a project that simply replaces windows, or a roof. The savings can surprise you.” With Recovery Act funds, the department is also installing improved metering systems at all the facilities in its portfolio, to better monitor the consumption of electricity, water, chilled water, steam, and natural gas.
Of course, patient safety and quality of care is the paramount criterion for the VA’s ARRA capital projects. By far the biggest-ticket Recovery Act projects are wholesale renovations and improvements of existing facilities, such as:
- $8.5 million to refurbish the surgical suite at the Cleveland VA Medical Center;
- $8 million to upgrade the electrical infrastructure at the Hines, Ill., VA Medical Center;
- $7.743 million to build new private and semi-private inpatient units at the New Haven, Conn., VA Medical Center;
- $7.165 million to renovate the mental health unit at the Bedford, Mass., VA Medical Center; and
- $4.74 million to renovate the emergency room of the Philadelphia VA Medical Center.
How to Spend $1.8 Billion
Despite what many people think they know about government spending, the responsibility to invest $1.8 billion of taxpayer money was not a simple proposition for the Department of Veterans Affairs. For one thing, there was limited time under the American Recovery and Reinvestment Act – 24 months – for the VA to spend the funds. The VA, like any government agency, is not accustomed to making impulse buys, and the requirement put some pressure on the VA’s Recovery Act team to select its projects quickly while adhering to the priority targets – patient safety, environmental security, and environmental efficiency – identified by VA Secretary Eric Shinseki and his advisers.
The accelerated process also had unprecedented conditions attached to it, explained Murray. In order to demonstrate to the American public that its government was spending the money wisely, the law requires a level of transparency never seen before in government. The department would have to report its progress weekly to the Office of the Vice President, and post it to two Web sites: www.recovery.gov, which records and reports the Recovery Act expenditures of the entire federal government, and the VA’s own ARRA-specific site, www.va.gov/recovery. The Recovery Accountabilty and Transparency Board, created by the statute, takes the reported data from each agency and issues aggregate quarterly and annual reports to the president and Congress.
“I know it’s shocking,” Murray said, “but as a bureaucracy, the VA never had to report this kind of data in near-real-time, sliced and diced from a dollar perspective, a contract award perspective, a congressional district perspective, and a categorical perspective – you know, these are renewable energy engineering projects; these are energy efficiency; these fall under patient safety and security. So we had to be able to slice and dice the data, and our systems really weren’t designed to do that.”
The new transparency requirements compelled some innovation at the VA, whose senior acquisition official, Kenneth J. Buck, designed enhancements to the department’s contracting software, the electronic contract management system (eCMS), a newer Web-based application that, to date, has not been widely institutionalized across the department. Within a short period of time, every department office that was a potential data source, from acquisition to engineering, was plugged into and oriented to the new system and aware of the reporting requirements.
“Necessity is the mother of invention,” said Murray. “And well, when they tell you, ‘You have to start reporting all this data, and you need to do it soon, and you need to do it with great precision, and by the way, we’re going to share it with the public, so stand by for lots of scrutiny,’ you know the accuracy has to be pretty high.” The only way to assure such accuracy was to do the hard work of coordinating protocols, document formats, and workflow within the eCMS. “It kind of forced the institutionalization of something that, arguably, we should have done better a long time ago,” Murray said.
The White House’s guidance for implementing the law includes further goals for agencies executing the Recovery Act: They should buy American whenever possible and bid all contracts competitively. Under executive order, all federal agencies have established goals for the amount of contracting funds they will spend with small businesses owned by specific groups, such as women, veterans, and service-disabled veterans. The VA’s established goals for non-Recovery Act expenditures are already ambitious; it aims to spend 28.7 percent of its money with small businesses overall: 10 percent of it with veteran-owned small businesses and 7 percent with businesses owned by service-disabled veterans.
“One of the things the White House told us was: ‘We don’t want to see huge sole-source awards to large companies. We want to see you use small business,’” Murray said. “And the secretary was even more specific. He said, ‘I want you to use veteran-owned small businesses, and we want competition. We want to get value for the monies.’”
How did the VA do with its Recovery Act goals for small business? In the summer of 2009, when it was still in the early contracting stages, about 30 percent of its Recovery Act funds were being spent with veteran-owned businesses: three times the VA’s self-imposed goal. While it’s too early to report the final tally of how much ARRA money will be directed to small business owners in terms of dollars, it’s likely to increase dramatically, given another measure of small-business participation: Of the 696 contractors who entered into 1,521 Recovery Act contracts with the VA, three-quarters are veteran-owned small businesses – many of them owned by service-disabled vets.
“As we passed beyond the planning and design phase, the engineering phase, and got into the construction phase,” said Murray, “we found that [there] were are a lot of small businesses, and a lot of veteran-owned small businesses, that could compete, and compete successfully, for that work. 98 percent of our contracts, in terms of both percent and dollars, were competitive, and these veteran-owned small businesses were awarded the contracts based on their merits, not because they were sole-source vendors or because we targeted them.”
Given such a level of competition, the VA was also able to demonstrate great value for its money, contracting 10 to 20 percent more projects than it had initially anticipated based on its acquisition history. “This is something our chief of staff, John Gingrich, is very proud of,” said Murray: “For a dollar spent, we feel we’re getting anywhere from $1.10 to $1.20 more in value. Now we think two things: Competition had a big role in that, and the economy had a role in that. But we’ll take it, right?”
The VA committed the last of its $1.8 billion in Recovery Act funds on July 31, becoming one of the first federal agencies to do so. The projects funded by the law – at 1,200 across all 50 states, the District of Columbia, and Puerto Rico – will increase veterans’ access to health care and services while creating jobs and stimulating the economy. Specifically, the projects will improve medical care, accelerate claims processing, enhance and beautify the national cemeteries, improve energy efficiency, upgrade technology, and reduce the environmental impacts of facilities.
Murray considers the work of the VA’s Recovery Act team to be an unqualified success, enhancing the VA’s ability to fulfill its mission while achieving unprecedented levels of transparency, accountability, value, and veteran participation. “We kind of rose to the occasion,” he said. “We’re pretty proud of the way the acquisition workforce worked with the engineering workforce and the finance workforce to pull it all together and make it happen.”
This article was first published in The Year in Veterans Affairs and Military Medicine: 2010-2011 Edition.