
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document affected by Public Law 107-14 Section 8(a)(15)]
[CITE: 38USC8125]

 
                      TITLE 38--VETERANS' BENEFITS
 
            PART VI--ACQUISITION AND DISPOSITION OF PROPERTY
 
   CHAPTER 81--ACQUISITION AND OPERATION OF HOSPITAL AND DOMICILIARY 
FACILITIES; PROCUREMENT AND SUPPLY; ENHANCED-USE LEASES OF REAL PROPERTY
 
                  SUBCHAPTER II--PROCUREMENT AND SUPPLY
 
Sec. 8125. Procurement of health-care items

    (a) Except as provided in subsections (b) and (c) of this section, 
the Secretary may not procure health-care items under local contracts.
    (b)(1) A health-care item for use by the Department may be procured 
under a local contract if--
        (A) the procurement is within the limits prescribed in paragraph 
    (3) of this subsection; and
        (B)(i) the item is not otherwise available to the Department 
    medical center concerned,
        (ii) procurement of the item by a local contract is necessary 
    for the effective furnishing of health-care services or the conduct 
    of a research or education program at a Department medical center, 
    as determined by the director of the center in accordance with 
    regulations which the Under Secretary for Health shall prescribe, or
        (iii) procurement under a local contract is demonstrably more 
    cost-effective for the item.

    (2) In the case of the need for an emergency procurement of a 
health-care item, such item may be procured under a local contract, but 
no greater quantity of such item may be procured by a local contract 
than is reasonably necessary to meet the emergency need and the 
reasonably foreseeable need for the item at the medical center concerned 
until resupply can be achieved through procurement actions other than 
emergency procurement.
    (3)(A) Except as provided in subparagraphs (C) and (D) of this 
paragraph, not more than 20 percent of the total of all health-care 
items procured by the Department in any fiscal year (measured as a 
percent of the total cost of all such health-care items procured by the 
Department in that fiscal year) may be procured under local contracts.
    (B) Local contracts for the procurement of health-care items shall, 
to the maximum extent feasible, be awarded to regular dealers or 
manufacturers engaged in the wholesale supply of such items.
    (C) The Secretary may increase for a fiscal year the percentage 
specified in subparagraph (A) of this section to a percentage not 
greater than 30 percent if the Secretary, based on the experience of the 
Department during the two fiscal years preceding such fiscal year, 
determines that the increase and the amount of the increase are 
necessary in the interest of the effective furnishing of health-care 
services by the Department. The authority to increase such percentage 
may not be delegated.
    (D) Items procured through an emergency procurement shall not be 
counted for the purpose of this paragraph.
    (c) A provision of law that is inconsistent with subsection (a) or 
(b) of this section shall not apply, to the extent of the inconsistency, 
to the procurement of a health-care item for use by the Department.
    (d)(1) Not later than December 1 of each year (beginning in 1992), 
the director of each Department medical center shall transmit to the 
Secretary a report containing a list indicating the quantity of each 
health-care item procured at that medical center under a local contract 
during the preceding fiscal year and the total amount paid for such item 
during such fiscal year.
    (2) Not later than February 1 of each year (beginning in 1993), the 
Secretary shall submit to the Committees on Veterans' Affairs of the 
Senate and the House of Representatives a report on the experience in 
carrying out this section during the preceding fiscal year.
    (3) Not later than February 1 of each year from 1989 through 1992, 
the Secretary shall submit to the Committees on Veterans' Affairs of the 
Senate and the House of Representatives a report on the experience in 
carrying out this section during the preceding fiscal year. The first 
such report shall contain information showing the percentage (measured 
by cost) of the total of all health-care items procured by the 
Department during fiscal year 1988 that were procured through local 
contracts. The other reports under this paragraph shall contain 
information showing the percentage (measured by cost) of the total of 
all health-care items procured by the Department, and by each Department 
medical center, during the fiscal year covered by the report that were 
purchased through local contracts and, in the case of each medical 
center at which the percentage was greater than 20 percent, an 
explanation of the reasons why that occurred.
    (e) For the purposes of this section:
        (1) The term ``health-care item'' includes any item listed in, 
    or (as determined by the Secretary) of the same nature as an item 
    listed in, Federal Supply Classification (FSC) Group 65 or 66. 
    Effective December 1, 1992, such term also includes any item listed 
    in, or (as determined by the Secretary) of the same nature as an 
    item listed in, Federal Supply Classification (FSC) Group 73. Such 
    term does not include perishable items.
        (2) The term ``local contract'' means a contract entered into by 
    a Department medical center for procurement of an item for use by 
    that medical center.
        (3) The term ``emergency procurement'' means a procurement 
    necessary to meet an emergency need, affecting the health or safety 
    of a person being furnished health-care services by the Department, 
    for an item.

(Added Pub. L. 100-322, title IV, Sec. 403(a)(1), May 20, 1988, 102 
Stat. 543, Sec. 5025; amended Pub. L. 100-687, div. B, title XV, 
Sec. 1507(b), (c), Nov. 18, 1988, 102 Stat. 4136, 4137; renumbered 
Sec. 8125, Pub. L. 102-40, title IV, Sec. 402(b)(1), May 7, 1991, 105 
Stat. 238; Pub. L. 102-83, Sec. 4(a)(3), (4), (b)(1), (2)(E), Aug. 6, 
1991, 105 Stat. 404, 405; Pub. L. 102-405, title III, Sec. 302(c)(1), 
Oct. 9, 1992, 106 Stat. 1984.)


                               Amendments

    1992--Subsec. (b)(1)(B)(ii). Pub. L. 102-405 substituted ``Under 
Secretary for Health'' for ``Chief Medical Director''.
    1991--Pub. L. 102-40 renumbered section 5025 of this title as this 
section.
    Subsec. (a). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted 
``Secretary'' for ``Administrator''.
    Subsec. (b). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted 
``Secretary'' for ``Administrator'' in two places in par. (3)(C).
    Pub. L. 102-83, Sec. 4(a)(3), (4), substituted ``Department'' for 
``Veterans' Administration'' wherever appearing.
    Subsec. (c). Pub. L. 102-83, Sec. 4(a)(3), (4), substituted 
``Department'' for ``Veterans' Administration''.
    Subsecs. (d), (e). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted 
``Secretary'' for ``Administrator'' wherever appearing.
    Pub. L. 102-83, Sec. 4(a)(3), (4), substituted ``Department'' for 
``Veterans' Administration'' wherever appearing.
    1988--Subsec. (d)(1). Pub. L. 100-687, Sec. 1507(b)(1), inserted 
``(beginning in 1992)'' after ``of each year''.
    Subsec. (d)(2). Pub. L. 100-687, Sec. 1507(b)(2), inserted 
``(beginning in 1993)'' after ``of each year''.
    Subsec. (d)(3). Pub. L. 100-687, Sec. 1507(b)(3), added par. (3).
    Subsec. (e)(1). Pub. L. 100-687, Sec. 1507(c), substituted ``65 or 
66'' for ``65, 66, or 73'' and inserted after first sentence ``Effective 
December 1, 1992, such term also includes any item listed in, or (as 
determined by the Administrator) of the same nature as an item listed 
in, Federal Supply Classification (FSC) Group 73.''


                             Effective Date

    Section 403(b) of Pub. L. 100-322, as amended by Pub. L. 100-687, 
div. B, title XV, Sec. 1507(a), Nov. 18, 1988, 102 Stat. 4136, provided 
that:
    ``(1) Subsections (a), (b)(1), and (b)(2) of section 5025 [now 8125] 
of title 38, United States Code (as added by subsection (a)), shall take 
effect one year after the date of the enactment of this Act [May 20, 
1988].
    ``(2) Subsection (b)(3) of such section shall apply to health-care 
items procured for use by the Veterans' Administration [now Department 
of Veterans Affairs] after September 30, 1990.''


           Standardization of Medical and Pharmaceutical Items

    Section 402 of Pub. L. 100-322, as amended by Pub. L. 100-687, div. 
B, title XV, Sec. 1508, Nov. 18, 1988, 102 Stat. 4137, directed 
Administrator, not later than Oct. 1, 1989, to develop and fully 
implement an agency-wide plan for cost-effective standardization of 
health-care items procured by Veterans' Administration.
