During a Tuesday hearing regarding the VA OIT’s budget justification, Chairman Matt Rosendale, R-Mont., and ranking member Sheila Cherfilus-McCormick, D-Fla., both questioned how the budget would affect operations. 

Kurt DelBene, the VA’s CIO and assistant secretary for IT, acknowledged that “it is a challenging budget for us,” forcing the agency to “be very focused on where we invest.” Modernization funds, he said, will have to be “judiciously” allocated “against the highest-priority projects” that the agency has. 

DelBene said that the agency’s original budget submission to the Biden administration did not reflect the same reduction to development efforts specifically for technology as the FY25 document ultimately did. 

The FY25 budget in brief, released by the VA, listed the following reductions across OIT:

• Development allocations at $960,000, a 99.2% reduction, or approximately a $125 million decrease. 
• Enhancement funds at $45 million, an 87.7% decrease, previously standing around $363 million.
• Modernization funds for FY25 are $267 million, a 66.5% cut, previously having allocated funds just under $800 million. 

As a result of the clawed-back funds for VA OIT, DelBene said that the agency is going to have to have a “very strict prioritization of the work that we do.” 

“I do think that we will be able to address the critical projects that we need to address in FY25 with this budget,” he added. “I think we’re making some trade-offs, which will not work well if we sustain those over multiple years.”

In response to a question from Cherfilus-McCormick, DeBene pointed to the need for increases in future years “because you can’t just continue to be at a lower level” for these funding allocations. 

DelBene also noted that the department is looking at a decreased budget for replacing technology, such as PCs, which he estimated to cost between $15-$20 million. 

“We will replace PCs less frequently as a result,” DelBene said. “That’s my point, is that we can’t continue to do that every year. But I feel especially with some of the funding we’ve got recently and the fact the fleet has been updated, we can do that for one year and make that through. But we’re going to have to be diligent about it in future years.”

DelBene said his goal is to not allow veteran care to be hampered as a result of budgetary pitfalls.

“There are difficult choices that have to be made across the entire administration so I respect the challenges of making those cuts,” DelBene said.

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The VA is inching toward awarding contracts for its upcoming modernization of a supply chain management system, officials shared during a House Veterans’ Affairs Subcommittee hearing. The Supply Chain Modernization (SCM) acquisition will be an “indefinite delivery, indefinite quantity” services contract and the validation phase has been approved through the Federal Information Technology Acquisition Reform Act (FITARA) review, led by the agency’s chief information officer. 

Lawmakers across the aisle agreed that the VA is not meeting reporting requirements requested by the subcommittee’s chairman, Rep. Matt Rosendale, R-Mont., as laid out in the House-passed IT Reform Act of 2021, which requires the agency to submit information — including cost, schedule and performance metrics — for “any major technology project” to Congress before the VA expends funds.

“I do believe VA can be successful in this effort if they communicate requirements and resources related to programs, effectively,” ranking member Sheila Cherfilus-McCormick, D-Fla., said during the hearing. “As of now, we haven’t seen that effective communication.”

Michael Parrish, the VA’s chief acquisition officer and principal executive director, said during the hearing that the agency does not view the SCM as a “major” IT project because the VA has not established a “firm budget” or a “firm schedule.”

Parrish described the project as taking a modular approach and said that the VA is addressing subcomponents with separate technology solutions as a service instead of purchasing hardware “that otherwise would be obsolete over time.”

In the current bill text for the IT Reform Act, the threshold for a “major information technology project” is met if the dollar value of the project is estimated to exceed $1 billion for the lifecycle cost of the project, $200 million annually or if the project is designated as such by the department’s secretary or CIO, or the director of the Office of Management and Budget. 

“Without a doubt, the VA and the veterans it serves would benefit from a functional inventory management system, and the department could make better use of taxpayers’ dollars if the system used to order medical supplies were connected to the systems that pay for and track them,” Rosendale said in his opening remarks. “However, what is described in the VA’s request for proposals seems to be a bureaucratic, empire building, mega-project.”

During the hearing, Rosendale cited information given to the committee from the VA putting the lifecycle cost of the SCM system between $9 billion and $15 billion, and would require congressional funding into 2043. Parrish reiterated that the agency is not yet committed to any dollar amount for the project. 

“The [SCM] project is a gigantic effort, the likes of which we have only seen in the [Electronic Health Record] and we know how that has turned out,” Rosendale said. “It would try to knit together all-encompassing systems to manage every aspect of a unified VA supply chain, from tongue depressors to X-ray machines to printer paper to headstones.”

The VA’s Oracle Cerner-run electronic health record has seen a litany of challenges, including patient safety issues with EHR pharmacy software and a  veteran’s death tied to a scheduling error. The system was originally launched in 2020, in an effort to create interoperability of records between the VA and Department of Defense health care systems. The implementation of EHR was later suspended in 2023 as part of a reset, and the department noted that it was working toward holding Oracle Cerner accountable for delivering high-quality services.

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The VA does not currently disclose the use of AI when the technology is used for diagnostic purposes in a health care setting, lawmakers noted during the House subcommittee hearing on Technology Modernization Oversight for the VA.  as Chairman Matt Rosendale, R-Mont., said that there is not a “good, consistent disclosure process that is being utilized and being signed off by our veterans,” a point that Dr. Gil Alterovitz, the director of the agency’s National Artificial Intelligence Institute and its chief AI officer, confirmed. 

Alterovitz did confirm that the department is piloting “model cards” that offer patients and providers information about the AI that is being applied to their care, along with informed consent forms that patients are given when the tools are being researched in health care settings. 

“I would highly recommend that if that disclosure [about AI use] is going out and someone’s information is going to be analyzed by AI, that certainly the patient should be made aware of that,” Rosendale said. “It could present all types of issues going forward. If the groups that are doing all that analysis of what is and what is not acceptable, a disclosure at the very beginning would be a good place to start.”

In the VA’s use case inventory, the department cites the use of a large language model that can help predict risks that patients might have before they enter surgery and another tool to “optimize surgical outcomes.” While the department notes that that tool has not been applied to a patient’s pre-surgery period, the VA reports that “large amounts of pharmacogenomic and phenotypic data have been analyzed by machine learning/(artificial intelligence and has produced interesting results” in various clinical settings.

Alterovitz responded to a question about ethical concerns from Rosendale, stating that the department is looking at “trustworthy AI,” and emphasized that the department is researching the surgical outcome LLM and not using it operationally. Rosendale raised more ethical concerns, citing false positives and restrictions on veterans’ freedoms, including gun ownership. 

However, in a different application, the VA is attempting to “extract signals” of suicidal risk from clinical notes through the use of natural language processing. The tool is used by the department in conjunction with current risk prediction methods.

Alterovitz reported that veterans sign a consent form when they are involved in a health care-centered process that utilizes an AI tool, and for AI tools used in operations, “generally there are tools used that have been publicized” on the VA’s use case inventory. 

“Everything that [Rosendale] said are concerns that need to be looked at,” Alterovitz said. “Where this uses AI is in the natural language processing, looking at those notes and extracting potential meaning out of it. There’s always a human in the loop that looks at the results. So this is a way to help them sift through a large amount of text.”

Rep. Keith Self, R-Texas, said he was “not satisfied” with the VA’s answers to questions about sanctions for contractors. 

The VA’s witnesses reported that the current sanctions for contractors that accidentally or purposefully leak sensitive information about veterans’ medical records are losses of contracts. 

“A general contract acquisition answer is not satisfactory because of the importance, the potential devastating consequences of a breach of 1,100 petabytes of data, sensitive data,” Self said. “First, you’ve got to identify some sanctions and they’ve got to be fairly severe sanctions, and they’ve got to be in policy upfront. This is something you have got to settle in policy early. Frankly, in my mind, it is not going to be sufficient to say, ‘we’re going to cancel a contract.’”

Self also scrutinized the VA for its unclear amount of AI use cases, stating that the agency reported 128 use cases to the subcommittee, 300 use cases to the Senate and 21 given during the hearing that “advanced to implementation.”

Charles Worthington, the VA’s chief technology officer, responded by saying that the department’s use case inventory is a “work in progress” and that the inventory has been “at different points in time, created to comply” with memorandums from the White House Office of Management and Budget.

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