A complete substitute amendment. v3 fundamentally restructures the Department of Veterans Affairs' acquisition organization, significantly revising definitions, roles, and responsibilities for major acquisition programs. It also introduces new requirements for independent analysis and a standardized requirements development process, while removing provisions for other transaction authority and advance market commitments.
ARCA Act of 2025
- Sponsor
- Sen. Moran, Jerry [R-KS]
- Committees
- Veterans' Affairs Committee (primary)
- Last action
- Dec 15, 2025
Bottom line
The bill aims to centralize, professionalize, and improve oversight of the VA's major acquisition programs to enhance efficiency and accountability.
What it actually does
This bill, the "Acquisition Reform and Cost Assessment Act of 2025," comprehensively reorganizes the Department of Veterans Affairs' (VA) acquisition structure. It establishes an Assistant Secretary for Acquisition as the Chief Acquisition Officer, creates an Office of Acquisition with new Deputy Assistant Secretaries and Program Executive Officers, and mandates the consolidation of all VA acquisition, procurement, and logistics activities under this new structure. It also establishes a Director of Cost Assessment and Program Evaluation (CAPE) to provide independent cost estimates and program evaluations, and mandates independent verification and validation for major acquisition programs.
Proponents argue
Supporters argue that the current decentralized acquisition process within the VA leads to inefficiencies, cost overruns, and delays in delivering critical services and technologies to veterans. They contend that centralizing authority under a dedicated Assistant Secretary, establishing clear program management roles, and implementing independent cost assessment and validation mechanisms will bring much-needed discipline, transparency, and expertise to VA acquisitions, ultimately benefiting veterans and taxpayers.
Opponents contend
Critics might argue that such a significant reorganization could lead to initial disruption and bureaucratic hurdles, potentially slowing down existing acquisition processes in the short term. Concerns could also be raised about the potential for increased administrative costs associated with new leadership positions and oversight bodies, or that centralizing control might remove flexibility from individual administrations (VHA, VBA, NCA) to tailor acquisitions to their specific needs.
The bill is moderately complex but well-structured, allowing a diligent reader to understand its provisions within a reasonable timeframe, especially given its focus on organizational reform.
Sec. 2(a), Sec. 8181 of title 38, United States Code
Definition of Major Acquisition Program
This section defines a "major acquisition program" within the Department of Veterans Affairs (VA) as any program to acquire services, supplies, technology, or systems with an estimated total life cycle cost exceeding $1,000,000,000 (adjusted for inflation) or an annual cost exceeding $200,000,000 (adjusted for inflation). This definition is crucial as it triggers the application of most of the bill's new oversight and management requirements.
Supporters argue
Supporters argue that a clear, high-dollar threshold is necessary to focus oversight efforts on the most impactful and financially significant programs, preventing resources from being diluted across smaller initiatives.
Critics contend
No specific opposition is typically raised against defining terms, but some might argue the thresholds are too high or too low, potentially excluding or including too many programs from the new oversight.
Tradeoffs
The tension lies in setting a threshold that captures genuinely "major" programs without overburdening the new oversight structure with too many initiatives, or conversely, missing significant programs just below the threshold.
Sec. 2(b), (c), Sec. 8182 of title 38, United States Code
Establishment of Assistant Secretary for Acquisition and Office of Acquisition
This provision designates one of the existing Assistant Secretaries as the Assistant Secretary of Veterans Affairs for Acquisition, who will also serve as the Chief Acquisition Officer (CAO) of the Department. It establishes an Office of Acquisition under this Assistant Secretary and mandates that all major acquisition program offices align and report directly to this office. The bill also creates three new Deputy Assistant Secretary roles within this office: for Logistics, for Procurement, and for Acquisition, Program Management, and Performance.
Sec. 2(f), Sec. 8182(f) of title 38, United States Code
Appointment and Certification of Program Executive Officers (PEOs)
The Assistant Secretary for Acquisition is required to appoint at least four Program Executive Officers (PEOs) to oversee major acquisition programs in specific areas: Medical, Information Technology, Professional Services, and Other. These PEOs must report directly to the Assistant Secretary and supervise program managers. Crucially, PEOs must be certified in project management at Level Three by the Department, Federal Acquisition Institute, Department of Defense, or hold an equivalent private sector certification.
Sec. 3, Sec. 8183 of title 38, United States Code
Major Acquisition Program Managers and Program Baseline Development
This section mandates the appointment of a manager for each major acquisition program within 30 days of its approval. These managers must also hold Level Three project management certifications (similar to PEOs) and report through their PEO to the Assistant Secretary for Acquisition. Their duties include developing a "program baseline" for each program, detailing acquisition phases, requirements for advancement, and estimates for cost, schedule, and performance across the entire life cycle. They are also responsible for continuous risk assessment and management.
Sec. 4
Organizational Consolidation of Acquisition Activities
Within one year of enactment, the Secretary of Veterans Affairs must organizationally consolidate all acquisition, procurement, contracting, logistics, and supply chain activities from across the entire Department, including the Veterans Benefits Administration (VBA), Veterans Health Administration (VHA), and National Cemetery Administration (NCA), under the Assistant Secretary for Acquisition. The bill clarifies that this does not require physical relocation of employees. The Secretary must submit a plan and provide a briefing to Congress within 90 days of commencing consolidation.
Sec. 5
Independent Verification and Validation (IV&V) for Major Acquisition Programs
The Secretary is mandated to contract with independent entities to perform Independent Verification and Validation (IV&V) services for all major acquisition programs. This IV&V must occur at program initiation (design, requirements, acquisition), at conclusion, and at other intervals chosen by the Chief Acquisition Officer. Eligibility for these contracts requires a proven track record of performing IV&V or equivalent services for governmental or commercial health care organizations, or for defense systems. Crucially, entities with any unmitigable conflict of interest are ineligible, and no mitigation plans are acceptable.
Sec. 6, Sec. 8184 of title 38, United States Code
Establishment of Director of Cost Assessment and Program Evaluation (CAPE)
This section establishes a Director of Cost Assessment and Program Evaluation (CAPE) within the Department, reporting directly to the Secretary. The CAPE is responsible for developing cost estimation policies, conducting independent cost estimates and analyses for major acquisition programs (and others as directed), providing these estimates to the Assistant Secretary for Acquisition before full-scale acquisition decisions, and evaluating program effectiveness. The CAPE must also submit annual reports to Congress on cost estimation and program evaluation activities, including a list of programs where the independent cost estimate exceeded the budget request by more than 5 percent.
Sec. 7
Improvements to Hiring of Entry-Level Acquisition Positions
The Secretary of Veterans Affairs is directed to prioritize the use of acquisition internship programs for hiring entry-level acquisition employees. Furthermore, by September 30 of the first fiscal year after enactment, the annual number of participants in these internship programs must be between two and four times the number of participants in fiscal year 2025. This requirement terminates once the Secretary certifies that the projected number of graduates is sufficient to meet the Department's human capital needs for acquisition, accounting for attrition and retirements.
Sec. 9, Sec. 8185 of title 38, United States Code
Requirements Development Process
The Secretary is required to establish a standardized requirements development process for major acquisition programs. This process must define and validate mission-driven requirements for programs exceeding the major acquisition thresholds, coordinate with the Assistant Secretary for Acquisition, incorporate data-driven needs assessments, stakeholder input (including veterans service organizations), and align with statutory mandates. It must also ensure iterative validation of requirements through independent verification and validation (as described in Sec. 5) to confirm cost, schedule, and performance baselines. The process must be implemented using existing staff within the Office of Acquisition and other relevant offices, unless a cost-benefit analysis (validated by the CAPE) justifies new positions.
Defines "major acquisition program" as exceeding $1,000,000,000 total life cycle cost or $200,000,000 annually, with both figures adjusted pursuant to section 1908 of title 41.
Sec. 2(a), Sec. 8181 of title 38, United States Code
Why it matters:Standard legislative practice for defining terms and incorporating existing statutory adjustment mechanisms.
Case for: Supporters argue that linking the thresholds to an existing inflation adjustment mechanism ensures that the definition remains relevant over time without requiring constant legislative updates, maintaining the focus on truly "major" programs in real dollar terms.
Case against: No specific opposition is typically raised against this technical detail, but some might argue that such adjustments could make it harder for stakeholders to track which programs qualify without consulting external references.
Estimated impact: Ensures that the scope of "major acquisition programs" automatically adjusts for inflation, maintaining the intended level of oversight over time.
States that the Secretary may not accept from an entity a plan to mitigate a conflict of interest in order to ameliorate any limitation or prohibition for Independent Verification and Validation (IV&V) contracts.
Sec. 5(b)(4)
Why it matters:This is a very strong, explicit prohibition against conflict-of-interest mitigation, which is often allowed in other contracting scenarios. Its strictness might be intended to prevent loopholes.
Case for: Proponents argue that this strict prohibition is essential to ensure the absolute independence and integrity of the IV&V process, preventing even the appearance of a conflict that could compromise the objectivity of the oversight.
Case against: Critics might argue that such an absolute prohibition could be overly rigid, potentially excluding highly qualified entities that could effectively manage minor conflicts of interest through robust mitigation plans, thereby limiting competition and increasing costs.
Estimated impact: Significantly tightens conflict-of-interest rules for IV&V contractors, potentially narrowing the pool of eligible vendors but enhancing the perceived independence of the reviews.
Requires the Secretary to implement the new standardized requirements development process using existing staff within the Office of Acquisition and other relevant offices, "without creating new positions, unless a subsequent cost-benefit analysis, validated by the Director of Cost Assessment and Program Evaluation, justifies additional resources."
Sec. 9(b), Sec. 8185(b) of title 38, United States Code
Why it matters:This clause addresses a common concern about new mandates leading to increased bureaucracy and staffing, by setting a high bar for additional personnel.
Case for: Supporters argue this provision demonstrates fiscal responsibility by ensuring that new processes are integrated efficiently using existing resources, and that any expansion of staff is rigorously justified by an independent cost-benefit analysis.
Case against: Critics might contend that implementing a "standardized requirements development process" for major acquisition programs, including stakeholder input and iterative IV&V, is a significant undertaking that may genuinely require new, specialized staff. Mandating the use of existing staff could strain resources, lead to burnout, or compromise the quality and speed of implementation.
Estimated impact: Limits immediate staffing increases for the new requirements development process, potentially forcing greater efficiency but also risking under-resourcing the initiative.