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This section establishes independent authority for the Secretary of Veterans Affairs to enter into leases for major medical facilities (as defined in 38 U.S.C. 8104)—notwithstanding 40 U.S.C. 3307—without delegation from the General Services Administration if the prospectus is approved by the House and Senate Committees on Veterans’ Affairs and transmitted to the House Committee on Transportation and Infrastructure and the Senate Committee on Environment and Public Works. Such leases have a firm term (i.e., initial non-cancellable period) of not more than 20 years, with extensions requiring prospectus authorization or congressional approval; must be funded from the new Veterans Leasing Fund and scored per OMB Circular A-11; and require market-based cost estimates informed by qualified sources, with notification to specified committees if projected costs exceed approved estimates by more than 10% or congressional budget authority. This section also establishes in the Treasury the Veterans Leasing Fund as a revolving fund for such leases, into which are deposited appropriations and transfers (reimbursable or nonreimbursable) from VA’s Medical Facilities account for rent, taxes, or operating costs; makes amounts available as contract authority for obligations including rental payments, tenant improvements, taxes, operating expenses, and pre-award due diligence; and requires specified budget justification disclosures. Finally, this section directs the Secretary, to the maximum extent practicable, to award leases for major medical facilities within one year of issuing a solicitation; to revise internal guidance, reviews, and workflows to eliminate delays; and to require contracting officer certification before solicitation that sufficient funds are obligated for due diligence (e.g., environmental, appraisal services available within 30 days under existing contracts), with prospective developers to provide price estimates during the expression of interest phase.
This section revises Department of Veterans Affairs (VA) cost estimation requirements for major medical facility leases (i.e., leases requiring congressional prospectus approval under 38 U.S.C. §8104) by (1) requiring inclusion of a market-based cost estimate evaluating local land values, applicable construction costs, and other Secretary-determined factors relevant to build-to-suit facilities; and (2) directing the Secretary to adopt a standardized methodology for estimating full life-cycle costs of major medical facility leases and prospectus-level leases that includes, at a minimum, base rent projections over the full term, tenant improvement and buildout costs based on current medical facility standards, operating expenses (e.g., utilities, maintenance, security), annual escalation factors tied to construction cost indices, labor rates, and market trends, cost assumptions for option or renewal periods, and geographic adjustments using regional market data. The section further requires the Secretary to annually adjust such cost estimates submitted to Congress for authorization or prospectus approval—using medical construction or real estate indices—from initial submission through the projected lease award date and to update and revalidate any cost estimate if the lease is not awarded within one year before obligating funds or resubmitting to Congress.
This section directs the Secretary of Veterans Affairs, in consultation with the Comptroller General of the United States, the Director of the Office of Management and Budget, and private sector stakeholders, to develop a revised procurement process for major medical facility leases under chapter 81 of title 38, United States Code, and to submit a report describing that process to the House and Senate Committees on Veterans’ Affairs not later than 180 days after the date of enactment of this Act.