GAO discussed the Department of Veterans Affairs' (VA) health facilities construction program, focusing on: (1) the impact of proposed health care reforms, including revised VA benefits eligibility, on the need for and size of VA construction projects; and (2) VA consideration of construction alternatives in determining the need for construction projects. GAO noted that: (1) universal health care coverage would reduce the demand for VA-sponsored care by 50 percent for inpatient care and 40 percent for outpatient care; (2) inclusion of nursing home care under universal care would lower demand for VA-supported long-term care; (3) decreased demand could create significant excess capacity in VA facilities; (4) VA hospital and nursing home bed requirements depend on how Congress alters VA health care eligibility; (5) VA does not adequately consider the availability of community and military facilities, which could reduce health care and construction costs, when it plans facility construction; and (6) demonstration projects could show whether alternative delivery methods are cost-effective and meet veterans' needs.