Submission and notification of cost estimates for medical facility leases

(a) Submission of cost estimates for major medical facility leases with presidential budget request Subchapter I of chapter 81 of title 38, United States Code, is amended by inserting after section 8104 the following new section: 8104A. Submission of cost estimates for major medical facility leases with president’s budget request (a) In general For each major medical facility lease or prospectus-level lease for which the Secretary seeks authorization, appropriations, or prospectus approval, the Secretary shall include in the budget justification materials submitted to Congress in connection with the budget of the Department for the applicable fiscal year (as submitted with the budget of the President under section 1105(a) of title 31) a market-based cost estimate and full life-cycle cost estimate for such lease. (b) Market-based cost estimate Each market-based cost estimate required under subsection (a) shall include an evaluation of— (1) local land values; (2) applicable construction costs; and (3) other cost factors the Secretary determines relevant to build-to-suit facilities. (c) Standardized methodology (1) In general The Secretary shall adopt and apply a standardized methodology for estimating under subsection (a) the full life-cycle cost of major medical facility leases and prospectus-level leases. (2) Required elements The methodology required under paragraph (1) shall include, at a minimum— (A) base rent projections over the full lease term; (B) tenant improvement and buildout costs based on current medical facility standards; (C) estimated operating expenses, including utilities, maintenance, and security; (D) annual escalation factors tied to construction cost indices, labor rates, and market trends; (E) cost assumptions for option periods or potential renewal terms; and (F) geographic adjustments using current regional market data to reflect location-specific construction and leasing conditions. (d) Annual adjustment (1) In general To reflect inflation and market escalation, the Secretary shall annually adjust each cost estimate for a lease submitted to Congress for authorization, appropriations, or prospectus approval during the period beginning on the date on which the Secretary first includes such cost estimate in the budget justification materials described in subsection (a) and ending on the projected award date for the lease. (2) Indices In adjusting a cost estimate under paragraph (1), the Secretary shall use such medical construction or real estate indices as the Secretary determines appropriate. (e) Rules of construction (1) Budgetary treatment Nothing in this section shall be construed to alter, supersede, waive, or otherwise affect the application of the scorekeeping guidelines, including the budgetary treatment of leases under Office of Management and Budget Circular A–11 or any successor guidance. (2) Preservation of existing budget authority requirements Nothing in this section shall be construed to authorize the Secretary to enter into a lease, incur an obligation, or make an expenditure except to the extent and in the amount provided in advance in appropriations Acts. (f) Definitions In this section, the term major medical facility lease has the meaning given that term in section 8104(a)(3)(B) of this title.. (b) Congressional notification and plan required for cost estimates exceeding approved prospectus amounts Subchapter I of such chapter is further amended by inserting after section 8104A the following new section: 8104B. Congressional notification and plan required for cost estimates exceeding approved prospectus amounts (a) Price estimates required during solicitation phase As part of the request for lease proposals (or equivalent formal solicitation) for a major medical facility lease, the Secretary shall require offerors to provide detailed price proposals, including the cost of land (if applicable), to enable evaluation against the authorized prospectus amount. (b) Notification required If the lowest responsive offer for a major medical facility lease exceeds the unserviced shell rent authorized in the approved prospectus by more than 10 percent, the Secretary shall notify the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives not later than 45 days after the date on which the Secretary determines that such offer exceeds such authorized amount. (c) Plan required (1) In general Not later than 60 days after notification under subsection (b) with respect to a major medical facility lease, the Secretary shall submit to the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives a plan to address the cost discrepancy for such lease, which may include scope adjustment, value engineering, requesting additional authority, or other appropriate measures. (2) Limitation on award The Secretary shall not award a major medical facility lease until the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives have received the plan required under paragraph (1) with respect to such lease. (d) Limitation on further action If the Secretary is required to submit a notification under subsection (b), the Secretary may not issue a request for lease proposals for the applicable major medical facility lease until the date on which the Secretary submits the plan required under subsection (c). (e) Rule of construction Nothing in this section shall be construed to authorize the Secretary to exceed any amount authorized in an approved prospectus or any amount provided in advance in an appropriations Act.. (c) Clerical amendment The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 8104 the following new items: 8104A. Submission of cost estimates for major medical facility leases with President’s budget request 8104B. Congressional notification and plan required for cost estimates exceeding approved prospectus amounts.