VA Overhaul Centralizes $250M+ Projects, Adds Fast Track for New Health Tech

The Acquisition Reform and Cost Assessment Act of 2025 (ARCA Act) is a massive structural shakeup aimed squarely at how the Department of Veterans Affairs (VA) buys everything from pens to multi-million-dollar IT systems. If you’ve ever heard horror stories about VA projects running over budget or behind schedule, this bill is the legislative attempt to fix that by creating a single, powerful new command center for all major purchasing.

The New Boss: Centralizing the VA’s Wallet

This bill creates a brand new top-level position: the Assistant Secretary of Veterans Affairs for Acquisition and Innovation. This person isn't just another bureaucrat; they become the VA's Chief Acquisition Officer, and every major program office—the ones handling projects costing $250 million or more—must now report directly to them. Think of it like taking all the purchasing departments scattered across a huge company (logistics, IT, health tech) and forcing them to report to one singular VP. This centralizes all contracting officers and supply chain logistics under this new Office of Acquisition and Innovation (Sec. 2, Sec. 4).

For veterans and taxpayers, this means two things: First, there’s clear accountability. If a huge IT project goes sideways, we know exactly who the buck stops with. Second, it could streamline the supply chain. If you’re a VA hospital worker, this reorganization is supposed to mean fewer delays getting critical supplies, as all logistics are now managed by a single Deputy Assistant Secretary for Logistics.

The $250 Million Rule and the Reality Check

Any project the VA undertakes with a lifetime cost of $250,000,000 or more is now officially a “major acquisition program” and gets the full treatment (Sec. 2). This means that every one of these big projects must have a dedicated manager who creates a detailed plan—a “Program Baseline”—covering cost, schedule, and performance from start to finish. They can’t move to the next phase without approval from the new Assistant Secretary (Sec. 3).

To make sure the numbers aren't just wishful thinking, the bill creates a new Director of Cost Assessment and Program Evaluation who reports directly to the Secretary. This Director’s job is to be the independent budget watchdog, conducting their own cost estimates for major programs before they get approved. For regular folks, this is the crucial check built in to stop the VA from greenlighting massive projects based on rosy, unrealistic budgets (Sec. 6).

Hiring Outside Eyes to Grade the Homework

One of the biggest changes involves mandatory independent oversight for major projects. The VA must now hire outside contractors to perform Independent Verification and Validation (IV&V) checks on major IT and acquisition programs. This is where the bill gets tough on conflicts of interest: the VA can’t hire a company to review a project if that company, or its partners, worked on the system in the previous three years (Sec. 5).

If you’re a contractor, this means you can’t build the system and check the system. This provision is designed to ensure that when the VA launches a new electronic health record system, for example, the testing is done by someone who has no financial stake in the outcome, hopefully leading to better, more reliable technology for veterans.

The Fast Lane for Veteran Health Tech

Perhaps the most innovative—and potentially riskiest—part of the bill is Section 7, which gives the VA two new tools to buy cutting-edge health care solutions faster. First is the Other Transaction Authority (OTA), which lets the VA bypass traditional, slow federal contracting rules to work with non-traditional contractors (like innovative startups) on research and development. These deals are generally capped at $5 million and require 33% non-federal funding, though those requirements can be waived by a senior executive.

Second are Advance Market Commitments (AMCs), which are essentially a promise by the VA to buy a specific health technology or service at a set price, provided it meets a defined unmet need for veterans. For a company developing a new mental health app or a prosthetic device, this promise of a VA purchase can be a massive incentive. While OTAs and AMCs can speed up the delivery of needed tech to veterans, they also operate outside standard procurement oversight, which is why Congress requires the VA to notify them of these deals within 30 days (Sec. 7). It’s a trade-off between speed and traditional transparency.