[Claim for Protest Costs]

B-226429, MAY 7, 1987

PROCUREMENT - SPECIAL PROCUREMENT METHODS/CATEGORIES - INTERAGENCY ACQUISITION MISCELLANEOUS TOPICS - FEDERAL ADMINISTRATIVE/LEGISLATIVE MATTERS - INTERAGENCY AGREEMENTS DIGEST: AGREEMENT BETWEEN VETERANS' ADMINISTRATION (VA) AND DEPARTMENT OF DEFENSE (DOD) PROVIDING FOR USE OF MILITARY AEROMEDICAL EVACUATION SYSTEM TO TRANSPORT VA BENEFICIARIES TO MILITARY AND VA HOSPITALS, ON A REFERRAL AND SPACE AVAILABLE BASIS, WOULD BE AUTHORIZED BY VA-DOD HEALTH RESOURCES SHARING AND EMERGENCY OPERATION ACT (38 U.S.C. SECS. 5011(A)) AND ECONOMY ACT (31 U.S.C. SECS. 1535).

GROUP DIRECTOR, HRD - JAMES WALSH:

INCIDENT TO THE SUBJECT REVIEW, YOU HAVE INQUIRED ABOUT THE POSSIBILITY OF USING THE MILITARY AEROMEDICAL EVACUATION SYSTEM TO TRANSPORT VETERANS' ADMINISTRATION (VA) BENEFICIARIES TO BOTH MILITARY AND VA HOSPITALS. HRD HAS DETERMINED THAT SUCH SHARING OF MEDICAL RESOURCES COULD RESULT IN SAVINGS TO THE GOVERNMENT AND IS THE TYPE OF SHARING THE VETERANS' ADMINISTRATION AND DEPARTMENT OF DEFENSE HEALTH RESOURCES SHARING AND EMERGENCY OPERATIONS ACT (SHARING ACT) SEEKS TO ENCOURAGE. DEPARTMENT OF DEFENSE (DOD) OFFICIALS IN THE OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE, ACQUISITIONS AND LOGISTICS, HAVE TAKEN THE POSITION THAT THE PROPOSED USE OF THE AEROMEDICAL EVACUATION SYSTEM IS EFFECTIVELY PROHIBITED BY DOD REGULATIONS. TO REMOVE THIS OBSTACLE, HRD INITIALLY CONTEMPLATED RECOMMENDING THAT THE REGULATIONS BE AMENDED. YOU INFORM US, HOWEVER, THAT DOD OFFICIALS ADVISED YOU THAT THE REGULATION IN QUESTION (DOD DISCUSSED BELOW, WHICH PROHIBIT THE SYSTEM FROM COMPETING WITH PRIVATE AIRLINES. YOU HAVE ASKED WHETHER WE AGREE THAT THE LAW THUS PRECLUDES THE PROPOSED VA USE OF THE MILITARY AEROMEDICAL EVACUATION SYSTEM. WE DO NOT AGREE THAT THE LAW MANDATES DOD'S REGULATION AND THAT A CHANGE WOULD THUS REQUIRE AMENDING THE LAW.

AS AMENDED BY THE SHARING ACT, 38 U.S.C. SECS. 5011(A) AUTHORIZES

"THE ADMINISTRATOR AND THE SECRETARY OF THE ARMY, THE SECRETARY OF THE AIR FORCE, AND THE SECRETARY OF THE NAVY TO ENTER INTO AGREEMENTS AND CONTRACTS FOR THE MUTUAL USE OR EXCHANGE OF USE OF HOSPITAL AND DOMICILIARY FACILITIES, AND SUCH SUPPLIES, EQUIPMENT, MATERIAL, AND OTHER RESOURCES AS MAY BE NEEDED TO OPERATE SUCH FACILITIES PROPERLY."

THE STATUTE FURTHER REQUIRES THE ADMINISTRATOR AND SECRETARY OF DEFENSE TO ESTABLISH GUIDELINES TO PROMOTE SHARING OF "HEALTH-CARE RESOURCES" BETWEEN THE AGENCIES, AND AUTHORIZE AGREEMENTS WITH HEADS OF MEDICAL FACILITIES OF THE OTHER AGENCY IN ACCORDANCE WITH SUCH GUIDELINES. U.S.C. SECS. 5011(C), (D)(1). THE TERM "HEALTH-CARE RESOURCE" IS DEFINED BROADLY TO INCLUDE "ANY ... HEALTH-CARE SERVICE, AND ANY HEALTH-CARE SUPPORT OR ADMINISTRATIVE RESOURCE." 38 U.S.C. SECS. 5011(G)(4).

CLEARLY, THE MILITARY'S AEROMEDICAL EVACUATION SYSTEM FALLS WITHIN THE BROAD DEFINITION OF "HEALTH-CARE RESOURCE." THE CENTRAL QUESTION IS WHETHER THIS HEALTH-CARE RESOURCE "MAY BE NEEDED TO OPERATE (VA AND MILITARY HOSPITAL) FACILITIES PROPERLY." NEITHER THE STATUTE NOR THE LEGISLATIVE HISTORY INDICATE WHAT TYPES OF HEALTH-CARE RESOURCES CONGRESS CONSIDERED APPROPRIATE TO THE PROPER OPERATION OF HOSPITAL FACILITIES. LIGHT OF THE EXPANSIVE DEFINITION OF "HEALTH-CARE RESOURCE," HOWEVER, WE BELIEVE THAT IT IS REASONABLE TO ATTRIBUTE A BROAD MEANING TO THE PHRASE "MAY BE NEEDED TO OPERATE (HOSPITAL) FACILITIES PROPERLY." MANY COMPONENTS CONSTITUTE PROPER OPERATION OF A HOSPITAL FACILITY AND A WIDE RANGE OF HEALTH-CARE SERVICES, HEALTH-CARE SUPPORT AND ADMINISTRATIVE RESOURCES ARE IMPLICATED. SPECIFICALLY, IT IS OUR OPINION THAT THE HEALTH -CARE RESOURCES THAT MAY BE NECESSARY TO PROPER OPERATION IS REASONABLY CONSTRUED TO INCLUDE PATIENT TRANSPORTATION SYSTEMS IN GENERAL AND THE MILITARY'S AEROMEDICAL EVACUATION SYSTEM IN PARTICULAR. HOSPITAL FACILITIES ARE OPERATED PROPERLY WHEN PATIENTS ARE CONVEYED TO THE PLACE OF TREATMENT IN THE SAFEST, MOST EXPEDITIOUS AND MOST ECONOMIC MANNER. TREATMENT, THE PRIMARY FUNCTION OF HOSPITALS, OBVIOUSLY CANNOT BEGIN UNLESS AND UNTIL PATIENTS ARE BROUGHT TO THE PREMISES. SPEEDY TRANSPORTATION WILL ENABLE PROMPT TREATMENT. USE OF THE MOST ECONOMICAL METHOD OF TRANSPORTATION WILL INSURE WISE ALLOCATION OF LIMITED AVAILABLE FUNDS. THUS, WE CONCLUDE THAT THE SHARING ACT WOULD PERMIT VA AND DOD TO ENTER INTO AGREEMENTS FOR USE OF THE MILITARY'S AEROMEDICAL EVACUATION SYSTEM TO TRANSPORT VA BENEFICIARIES TO VA AND DOD HOSPITALS.

FURTHER, THE USE OF THE DOD AEROMEDICAL EVACUATION SYSTEM BY VA BENEFICIARIES WOULD FACILITATE CARRYING OUT THE PURPOSE OF THE SHARING ACT: TO PROMOTE THE COORDINATION AND SHARING OF HEALTH-CARE RESOURCES BETWEEN THE VA AND DOD, IN ORDER TO REDUCE COSTS TO THE FEDERAL GOVERNMENT WHILE IMPROVING ACCESS TO HEALTH BENEFICIARIES OF EACH AGENCY. SEE 38 U.S.C. SECS. 5011(B)(1), (B)(4), (C)(1), WHICH AUTHORIZE VARIOUS ACTIVITIES IN ORDER TO "PROMOTE THE SHARING OF HEALTH CARE RESOURCES" BETWEEN DOD AND VA. AN AGREEMENT TO SHARE THIS MEDICAL RESOURCE WOULD ALSO BE CONSISTENT WITH THE STATEMENT OF PURPOSE CONTAINED IN THE VA/DOD HEALTH CARE RESOURCE SHARING GUIDELINES, THE ESTABLISHMENT OF WHICH WERE MANDATED BY 38 U.S.C. SECS. 5011(C)(1). SECTION 1-101 OF THE GUIDELINES ADVOCATES "MAXIMIZATION OF SHARING OPPORTUNITIES."

HOWEVER, DOD REGULATION 4515.13, SECS. 11-5(B), 11-7(B), PERMITS AEROMEDICAL TRANSPORT OF VA BENEFICIARIES ONLY WHEN OTHER ADEQUATE TRANSPORTATION IS NOT AVAILABLE. IN ADDITION, DOD REGULATION 4515.13, SEC. 5(B), REQUIRES VA TO REIMBURSE DOD AT A HIGHER RATE THAN VA WOULD PAY FOR COMMERCIAL AIR TRANSPORTATION, MAKING VA USE OF MILITARY TRANSPORTATION IMPRACTICAL. THE SHARING ACT, IN CONTRAST, AUTHORIZES DOD AND THE VA TO ENTER INTO AGREEMENTS UNDER WHICH THE PROVIDING AGENCY (DOD IN THIS CASE) WOULD BE REIMBURSED FOR THE COST OF THE HEALTH CARE SERVICE "BASED UPON A METHODOLOGY THAT IS AGREED UPON BY THE CHIEF MEDICAL DIRECTOR AND THE ASSISTANT SECRETARY AND THAT PROVIDES APPROPRIATE FLEXIBILITY TO THE HEADS OF THE MEDICAL FACILITIES CONCERNED TO TAKE INTO ACCOUNT LOCAL NEEDS AND THE ACTUAL COSTS TO THE PROVIDING AGENCY'S FACILITY OF THE HEALTH-CARE RESOURCES PROVIDED." 38 U.S.C. SECS. 5011(D)(1)(4)(E).

IN SUPPORT OF THEIR POSITION THAT THE REGULATION IS MANDATED BY LEGISLATION WHICH PROHIBITS THE SYSTEM FROM COMPETING WITH PRIVATE AIRLINES, YOU INDICATED THAT DOD OFFICIALS CITED THE FOLLOWING STATUTES: 31 U.S.C. SECS. 636 AND 638 (A DOD REPRESENTATIVE TOLD US THAT THESE CITES WERE INCORRECT AND SHOULD BE CHANGED TO 31 U.S.C. SECS. 1301 AND 1344), SECTION 102 OF THE FEDERAL AVIATION ACT OF 1958, AND 49 U.S.C. SECS. 301, 401, AND 1001. NONE OF THESE STATUTES MANDATES DOD REGULATION 4515.13. SECTIONS 636 AND 638 NO LONGER EXIST IN TITLE 31 OF THE UNITED STATES CODE. SECTION 1301 OF 31 U.S.C. GENERALLY PROVIDES THAT APPROPRIATIONS ARE TO BE APPLIED ONLY TO THE OBJECTS FOR WHICH THEY WERE MADE, EXCEPT AS OTHERWISE PROVIDED BY LAW. WE DO NOT VIEW THIS PROVISION AS LIMITING DOD'S SHARING OF HEALTH-CARE RESOURCES SINCE, AS SET FORTH ABOVE, THE SHARING ACT PROVIDES OTHERWISE. IN ADDITION, TO THE EXTENT THAT THE USE OF THE MILITARY'S AEROMEDICAL EVACUATION SYSTEM CAN BE OBTAINED MORE INEXPENSIVELY THAN A SIMILAR COMMERCIAL ENTERPRISE, THE ECONOMY ACT (31 U.S.C. SEC. 1535, FORMERLY 31 U.S.C. SEC. 686) AUTHORIZES AGREEMENTS TO SHARE THIS SERVICE. EVEN BEFORE THE ENACTMENT OF THE SHARING ACT, THE ECONOMY ACT GAVE AUTHORITY TO ENTER INTO SHARING AGREEMENTS; THE SHARING ACT THEREAFTER PROVIDED A GREATER INCENTIVE TO SHARE (BY WAY OF ITS REIMBURSEMENT SECTIONS), REMOVING ADMINISTRATIVE IMPEDIMENTS TO SHARING. SECTION 1344 OF 31 U.S.C. PROVIDES, IN PERTINENT PART, THAT AIRCRAFT OF THE UNITED STATES GOVERNMENT BE USED ONLY FOR OFFICIAL PURPOSES. BASED ON THE ARGUMENTS ADVANCED ABOVE, USE OF THE MILITARY'S AEROMEDICAL EVACUATION SYSTEM IS NECESSARY TO THE PROPER OPERATION BY THE SHARING ACT AND THE ECONOMY ACT. THUS, AN AGREEMENT TO SHARE THIS HEALTH-CARE RESOURCE WOULD BE AN OFFICIAL PURPOSE. SECTION 102 OF THE FEDERAL AVIATION ACT OF 1958 (49 U.S.C. SECS. 1302 (1982)) ENUMERATES FACTORS THE CIVIL AERONAUTICS BOARD SHOULD CONSIDER IN PERFORMING ITS DUTIES. IT DOES NOT APPEAR RELEVANT TO THE PRESENT INQUIRY. SECTION 301 OF 49 U.S.C. SETS FORTH THE DUTIES OF THE SECRETARY OF TRANSPORTATION, AND ALSO SEEMS TO BE IRRELEVANT. SECTIONS 401 AND 1001 HAVE BEEN REPEALED AND WERE NOT (PRIOR TO REPEAL) RELEVANT TO THE ISSUE PRESENTED.

CONVERSATION BETWEEN ROCHELLE KAUFFMAN, FORMERLY GAO/OGC, AND MS. MCBRIDE, OFFICE OF GENERAL COUNSEL, DOD, SUBSEQUENT TO YOUR MEMORANDUM, REVEALED A SOMEWHAT DIFFERENT DOD POSITION THAN THE ONE CHARACTERIZED IN YOUR MEMORANDUM. MS. MCBRIDE STATED THAT THERE IS NO STATUTE THAT EXPRESSLY PROHIBITS DOD FROM COMPETING WITH PRIVATE AIRLINES. IN HER OPINION HOWEVER, USE OF THE DOD AEROMEDICAL EVACUATION SYSTEM BY VA BENEFICIARIES WOULD BE MORE EXPENSIVE THAN COMMERCIAL AIRLINES, AND THUS WOULD BE UNAUTHORIZED UNDER THE ECONOMY ACT. MS. MCBRIDE PROVIDED NO BASIS FOR HER FACTUAL PREMISE. SHE CITED 31 U.S.C. SECS. 1301, 1344, AND 1535 IN SUPPORT OF DOD'S POSITION THAT A REGULATION PERMITTING VA USE OF THE MILITARY AEROMEDICAL EVALUATION SYSTEM WOULD NOT BE AUTHORIZED ABSENT A CHANGE OF LEGISLATION.

SECTIONS 1301 AND 1344 HAVE BEEN DISCUSSED ABOVE. THEY DO NOT PROHIBIT THAT WHICH IS AUTHORIZED BY THE ECONOMY OR SHARING ACTS. SECTION 1535 OF THE ECONOMY ACT PROVIDES, IN SUBDIVISION (A)(4), THAT "THE HEAD OF AN AGENCY ... MAY PLACE AN ORDER WITH ... ANOTHER AGENCY IF ... THE HEAD OF THE AGENCY DECIDES ORDERED GOODS OR SERVICES CANNOT BE PROVIDED AS CONVENIENTLY OR CHEAPLY BY A COMMERCIAL ENTERPRISE." ACCORDING TO YOUR FINDINGS, USE OF THE MILITARY'S AEROMEDICAL EVACUATION SYSTEM WOULD BE CHEAPER AND MORE CONVENIENT THAN USE OF SIMILAR COMMERCIAL TRANSPORTATION SYSTEM. FURTHER, SINCE VA WOULD BE THE AGENCY PLACING THE ORDER FOR THE SERVICE, IT IS VA'S DETERMINATION OF COST (NOT DOD'S) WHICH WOULD GOVERN WHETHER THE SHARING IS AUTHORIZED BY THE ECONOMY ACT. 31 U.S.C. SEC. 1535(A)(4). FINALLY, EVEN IF THE USE OF THE MILITARY AEROMEDICAL EVACUATION SYSTEM BY VA BENEFICIARIES WERE NOT AUTHORIZED BY THE ECONOMY ACT, DOD'S POSITION TOTALLY IGNORES THE SHARING ACT. THE APPLICATION OF THAT ACT IN THESE CIRCUMSTANCES PROVIDES IN EFFECT THAT DOD AND VA MERELY TAKE ACTUAL COSTS INTO ACCOUNT AND BALANCE THEM AGAINST LOCAL NEEDS.

TO CONCLUDE, WE DO NOT BELIEVE THAT DOD REGULATION 4515.13 IS STATUTORILY MANDATED, NOR HAVE WE FOUND ANY LEGISLATION WHICH WOULD CONFLICT WITH THE IMPLEMENTATION OF THE SHARING ACT BY VA USE OF THE DOD AEROMEDICAL EVACUATION SYSTEM AS YOU OUTLINE. AN AGREEMENT BETWEEN THE VA AND DOD TO THIS END IS AUTHORIZED BY THE SHARING ACT AND THE ECONOMY ACT.