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The Veterans Administration's (VA) Department of Medicine and Surgery (DM&S) recently developed a methodology called the Space and Functional Deficiency Identification (SFDI) system which is intended to be an integral part of the decisionmaking process DM&S uses in establishing priorities for major construction projects. Such a system is needed so that DM&S can plan an orderly program for modernizing its aging facilities, but several modifications are needed to improve the system. The methodology could be improved if: all construction projects were ranked on the same basis rather than ranked within each construction category; and projected, rather than current, use of VA hospitals were considered. The SFDI system and the entire review process depends on the data gathered by medical district representatives. Because of the importance of the data gathered and scoring by district representatives, DM&S should closely monitor the scorings for any obvious irregularities. Decisions to fund projects in different order than that determined by the SFDI system should be documented. The Administrator of Veterans Affairs should develop a priority ranking for all construction projects, regardless of construction category, and include projected use of health care facilities as a factor in establishing priorities.

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