VBA will turn to a contractor to reduce backlog of GI educational benefits

October 28, 2009 (NextGov) - The Veterans Affairs Department said it issued a solicitation for temporary contractor support to help process what it called an unprecedented volume of educational benefit claims it has received since the post-9/11 GI bill went into effect.

The contract "will assist VA in delivering education benefits to our veterans as quickly as possible," said Patrick Dunne, undersecretary for benefits. "We will do everything in our power to minimize delays for our veteran-students."

The post-9/11 GI bill, which went into effect on Aug. 1, updates and expands the educational benefits provided in the GI bill passed after World War II, called the Montgomery GI bill. For example, the bill hikes what the government will pay for tuition from $1,300 a month to a payment that is pegged at the highest tuition at a public university in a veteran's state of residence. For example, the tuition at the University of Massachusetts at Amherst is $11,732 a year. The bill includes monthly living expenses of $1,100 to $1,200.

The new law has generated a large number of new applications, and combined with the standard high volume of school enrollment claims in August and September, which typically are the busiest months for education claims, the number of claims has exceeded anticipated levels, the VA said.

This is the latest stopgap measure to manage claims under the new GI bill. In September, VA Secretary Eric Shinseki ordered emergency stipend payments of up to $3,000 to veterans who were concerned they would not receive their stipend payments in time to cover living expenses.

Joe Davis, a spokesman for the Veterans of Foreign Wars, said VA has "tremendous talent, but you can't expect the organization to possess every skill set required to operate every program, especially one as large and intricate as the new GI bill. Professionally run organizations recognize problems and then take the necessary steps to correct them, even if it means asking for outside help."

Paul Sullivan, executive director of Veterans for Common Sense, objected to VA's plans to hire a contractor to clean up what he called "disastrous and catastrophic" handling of claims by the Veterans Benefits Administration, which processes education and disability benefits.

The department said the temporary GI bill contractor will provide its own work site and personnel to perform claims processing tasks. Contract staff will validate enrollment information provided by schools and make recommendations on claim status to VA personnel, who will finalize claims decisions and generate payments.

The contractor will review and authorize all work performed by its personnel. VA will offer training on security and claims processing procedures to contract personnel, who will assist in handling only the least complex cases.

Calculating benefits under the new GI bill, called the Post-9/11 Veterans Educational Assistance Act is a more complex task than claims filed under the Montgomery GI bill, VA officials have said since the new bill was passed in July 2008.

Keith Wilson, director of VA's education service, told Nextgov a year ago that education benefits under older versions of the GI bill were set as a flat rate regardless of where a veteran went to school.

But the new GI bill requires VA to calculate benefits based on length of service and the highest tuition charged by a public college in a veteran's home state. Separate housing benefits are based on cost-of-living allowances computed by the Defense Department for 300 ZIP codes.

VA lacked in-house expertise to develop a new information technology system to handle the complex calculations, so in July 2008, it planned to outsource processing of claims to industry.

After the Veterans of Foreign Wars and the America Federation of Government Employees objected to the plan, VA selected the Space and Naval Warfare Systems Center in Charleston, S.C., in October 2008 to develop a new system to automate the processing of post-9/11 GI bill claims.

That system will not be completed until 2010. Wilson told the House Veterans Affairs Committee in October that claims are processed using four IT systems that do not interface with one another. Claims examiners use an automated front-end tool to determine eligibility, entitlement and benefits, and a different back-end tool to enter payment information into VA's Benefits Delivery Network, which then issues checks to veterans.

Shinseki told Nextgov on Oct. 23 that the department would deploy an automated tool in November, which will make a "big difference" in the processing of claims.

VA has not yet responded to requests to provide the number of pending claims. On Oct. 15, Wilson told the lawmakers that more than 44,500 veterans have received payments under the new GI bill and the agency still needed to process 30,000 certificates of eligibility.