S. 1591 — ARCA Act of 2025

This section cites the Act as the “Acquisition Reform and Cost Assessment Act of 2025” or the “ARCA Act of 2025” and includes a table of contents.

This section establishes a new subchapter VII in chapter 81 of title 38, United States Code, defining a "major acquisition program" of the Department of Veterans Affairs (VA) as one with an estimated total life cycle cost exceeding $1 billion (adjusted pursuant to 41 U.S.C. §1908) or $200 million annually. The section increases the number of Assistant Secretaries of Veterans Affairs from seven to eight (pursuant to 38 U.S.C. §308(a)(1)) and designates one as the Assistant Secretary for Acquisition—who serves as VA's Chief Acquisition Officer (pursuant to 41 U.S.C. §1702(a)) and whose responsibilities are retitled from procurement to acquisition functions. The section further establishes an Office of Acquisition, headed by the Assistant Secretary for Acquisition, under which major acquisition program offices must align and report directly; requires the office's budget—including for major acquisition programs—to appear in VA's budget justification materials to Congress; and directs the appointment of three Deputy Assistant Secretaries reporting to the Assistant Secretary for Acquisition, responsible for (1) logistics and supply chain operations, (2) procurement and contracting organizations, and (3) lifecycle management, requirements planning, programming and budgeting, policy, performance standards, governance, and acquisition workforce capabilities. Finally, the section requires the Assistant Secretary for Acquisition to appoint no fewer than four Program Executive Officers—covering medical, information technology, professional services, and other areas—who report directly to the Assistant Secretary, supervise managers of major acquisition programs, and hold level-three project management certification from VA, the Federal Acquisition Institute, the Department of Defense, or an equivalent private-sector organization.

This section establishes requirements for Department of Veterans Affairs (VA) major acquisition program managers. It directs the applicable Program Executive Officer to appoint a manager within 30 days after the Secretary approves a major acquisition program to commence; requires the manager to hold level three project management certification from the VA, Federal Acquisition Institute (41 U.S.C. §1201), Department of Defense (10 U.S.C. §1701a), or an equivalent private sector organization; and specifies manager duties, including (1) developing a "program baseline" plan describing acquisition phases, advancement requirements, and life-cycle cost, schedule, and performance estimates; (2) ensuring program compliance and providing documentation to officials and governance boards; (3) developing resource requests; and (4) continuously assessing and managing cost and schedule risks, with the manager reporting to the Assistant Secretary for Acquisition through the Program Executive Officer. The section further designates the Assistant Secretary for Acquisition as the program decision authority; requires program management offices to report directly to that Assistant Secretary, independent of the Veterans Benefits Administration, Veterans Health Administration, National Cemetery Administration, and staff offices; and mandates manager notification to the decision authority within 30 days after concluding an acquisition phase.

This section requires the Secretary of Veterans Affairs, not later than one year after enactment, to organizationally consolidate under the Assistant Secretary for Acquisition all departmental activities related to (1) acquisition, (2) procurement and contracting, or (3) logistics and supply chain—including those of the Veterans Benefits Administration, Veterans Health Administration, and National Cemetery Administration. The section specifies that this consolidation does not require physical relocation of employees. Not later than 90 days after commencing consolidation, the Secretary must submit to the Senate and House Committees on Veterans' Affairs a plan—including (A) a timeline, (B) plans for communication and training activities, (C) plans for policy and guidance modifications, and (D) other relevant matters—and provide a briefing on the plan.

This section requires the Secretary of Veterans Affairs, not later than 120 days after enactment, to enter into one or more competitively procured contracts with qualified entities for independent verification and validation (IV&V)—defined as comprehensive inspection, review, analysis, testing, or assessment to verify requirements and validate cost, schedule, and performance baselines—of major acquisition programs. Eligibility for such contracts is limited to entities that (1) have performed at least three prime contracts in the preceding three-year period for IV&V or systems engineering and technical advisory (SETA) support of major acquisitions for governmental or commercial health care organizations or Department of Defense systems, with satisfactory past performance; and (2) demonstrate no conflicts of interest, with no mitigation plans permitted. IV&V must occur for each major acquisition program at initiation, conclusion, and other intervals selected by the Chief Acquisition Officer (CAO), as well as for other programs selected by the CAO; funding must be proportionally contributed by affected Department subdivisions.

This section establishes in the Department of Veterans Affairs (VA) a Director of Cost Assessment and Program Evaluation, who reports directly to the Secretary and has the following responsibilities: (1) developing policies and procedures for cost estimation and analysis of major VA acquisition programs; (2) conducting independent cost estimates and analyses for major acquisition programs (or others as directed by the Secretary) to support acquisition decisions; (3) providing an independent cost estimate to the Assistant Secretary for Acquisition before approving full-scale acquisition for a major program (or others as directed); (4) evaluating the effectiveness of major acquisition programs in meeting VA objectives; and (5) submitting to the Secretary and the congressional Veterans' Affairs Committees, not less frequently than annually, a report on cost estimation and program evaluation activities, including recommendations to improve acquisition efficiency and a list of all acquisitions where the independent cost estimate exceeds the budget request by more than 5%. Directs the VA Chief Financial Officer to provide necessary support and resources for the director's office. Separately requires the director to submit to the Secretary, not later than one year after enactment and annually thereafter until December 31, 2028, a report on systems and methods for tracking and assessing operating and support costs of major acquisition programs (as defined in 38 U.S.C. §8181), including recommendations for establishing cost baselines; the Secretary must transmit each such report to the congressional Veterans' Affairs Committees within 30 days of receipt.

This section directs the Secretary of Veterans Affairs (1) to prioritize acquisition internship programs for hiring into entry-level acquisition positions and (2) to ensure that the annual number of participants in such programs is not fewer than twice and not more than four times the fiscal year 2025 number, beginning not later than September 30 of the first fiscal year after enactment of this Act. The participant increase requirement terminates upon certification by the Secretary to the congressional Committees on Veterans' Affairs that projected internship graduates are sufficient to meet the Department's acquisition workforce needs, accounting for attrition and projected retirements.

This section directs the Secretary of Veterans Affairs, not later than one year after the date of enactment, to seek a memorandum of understanding with the acquisition research center established under 10 U.S.C. §4142(a) to conduct a systems engineering analysis of the Department of Veterans Affairs' acquisition process (i.e., procedures for procuring goods and services to deliver veterans' health care, benefits, and other services). The section further requires the Secretary to submit to the Senate and House Committees on Veterans' Affairs a report on the center's findings not later than one year after entering into the memorandum of understanding.

This section establishes a standardized requirements development process for Department of Veterans Affairs (VA) major acquisition programs exceeding $200 million annually or $1 billion in lifecycle costs. The process, developed in coordination with the Assistant Secretary for Acquisition, requires (1) defining and validating mission-driven requirements; (2) incorporating data-driven needs assessments, stakeholder input from VA elements and veterans service organizations, and alignment with statutory mandates such as 38 U.S.C. §8121; and (3) iterative validation through independent verification and validation to confirm cost, schedule, and performance baselines. The section further limits implementation to existing staff in the Office of Acquisition and other relevant offices without creating new positions unless justified by a cost-benefit analysis validated by the Director of Cost Assessment and Program Evaluation. Finally, the section requires the VA Secretary to submit a report to the Senate and House Committees on Veterans' Affairs within 180 days of enactment detailing the process and an implementation plan, including timelines for integration with major acquisition program baselines.

This section makes clerical amendments to the table of sections at the beginning of chapter 81 of title 38, United States Code, by (1) striking the item relating to section 8172; and (2) adding items for a new Subchapter VII—Acquisition organization, cost assessment, and program evaluation—covering sections 8181 (definition of major acquisition program), 8182 (acquisition reorganization), 8183 (major acquisition program managers), 8184 (cost assessment and program evaluation), and 8185 (requirements development process).