New VA Leasing Bill Bypasses GSA, Creates Dedicated $ Fund to Build and Lease Major Medical Centers Faster

The Leasing and Infrastructure Act of 2025 is a major shake-up in how the Department of Veterans Affairs (VA) acquires the massive medical facilities needed to serve veterans. Essentially, this bill pulls the power to lease major medical centers—think hospitals and huge outpatient clinics—out of the hands of the General Services Administration (GSA) and gives it directly to the Secretary of Veterans Affairs. It’s designed to speed up construction and leasing, but it comes with some serious fine print.

The VA Gets the Keys to the Real Estate Office

Under Section 2, the VA Secretary gets independent authority to enter into leases for major medical facilities without having to go through the GSA. This is a big deal because the GSA is usually the federal government’s landlord and real estate manager. The idea is to cut out bureaucratic layers that slow down facility delivery. To keep Congress in the loop, the lease prospectus still needs approval from the House and Senate Veterans’ Affairs Committees, and the initial, non-cancellable lease term is capped at 20 years.

To fund this, the bill creates the Veterans Leasing Fund, a dedicated, revolving Treasury account. The VA can use money from this fund for everything from rent and taxes to pre-award costs like design and environmental studies. Crucially, the fund allows the VA to enter into contract obligations before the money is actually appropriated, which means they can move faster when a good deal is on the table. This is supposed to eliminate the delays that often plague large government construction projects, ensuring that a veteran in need of a new specialized clinic in their region gets it sooner rather than later.

The Clock is Ticking: The One-Year Rule

This bill sets a hard deadline for the VA to get deals done. Section 2 requires the Secretary to try and award a lease within one year of issuing the solicitation. This is a clear response to the long, drawn-out procurement processes that have frustrated veterans and developers alike.

But here’s the kicker that should make taxpayers pay attention: If the VA fails to award a lease within that one-year target, the Secretary must reimburse every prospective developer who was in the competitive range for their delay costs. The penalty is set at 1% annually of the average proposed land acquisition cost from all bidders. This is a massive incentive for the VA to move fast, but it also creates a potential problem. If a developer knows the VA is under the gun to avoid this penalty, they might be incentivized to inflate their initial land acquisition cost estimates, knowing that if the project stalls, they get a bigger payout from the government for doing nothing.

Commercial Real Estate Terms Enter the VA

Section 2 also pushes the VA to adopt commercial real estate practices to reduce “risk premiums.” When a private developer leases a building to the government, they often charge more because government contracts are notoriously rigid and slow. This bill allows the VA to structure leases using terms like triple-net leases (where the tenant—the VA—pays for taxes, insurance, and operating expenses) and to define “shell work” and “tenant improvements” using commercial standards.

For the average person, this means the VA is trying to act more like a private company when it leases property. While this could lower the initial rent costs, it also means the VA takes on more of the operating risk and cost burden, which could lead to higher, less predictable expenses down the road for things like maintenance and utilities. The bill also requires the VA to update its design guides, ensuring specifications aren't “over-engineered or unnecessarily prescriptive,” which should theoretically save money and time on construction.

Mandatory Cost Control and Oversight

While the bill grants the VA new freedom, Section 3 adds significant oversight requirements. The Secretary must now use a standardized life-cycle cost methodology for all major leases, including base rent, operating expenses, and renewal costs, adjusted annually for inflation. This is good news for transparency, as it forces the VA to calculate the true long-term cost of a facility, not just the initial sticker price.

However, if project costs exceed the approved estimates by more than 10 percent, the VA must notify Congress within 30 days. This 10% threshold is important because it’s the point where significant cost overruns trigger mandatory reporting. While oversight is necessary, the new independent authority combined with the pressure of the one-year deadline and the potential for costly developer reimbursements means Congress needs to keep a very close eye on how the VA uses this new, powerful checkbook.