REQUIREMENTS FOR THE PROCUREMENT OF HEALTH-CARE ITEMS.

SEC. 403. REQUIREMENTS FOR THE PROCUREMENT OF HEALTH-CARE ITEMS. (a) In General.— (1) Subchapter II of chapter 81 is amended by adding at the end the following new section: “§ 5025. Procurement of health-care items “(a) Except as provided in subsections (b) and (c) of this section, the Administrator may not procure health-care items under local contracts. “(b) (1) A health-care item for use by the Veterans’ Administration 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 Veterans’ Administration 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 Veteran’ Administration medical center, as determined by the director of 102 STAT. 544the center in accordance with regulations which the Chief Medical Director 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 Veteran’ Administration in any fiscal year (measured as a percent of the total cost of all such health-care items procured by the Veteran’ Administration 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 Administrator 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 Administrator, based on the experience of the Veteran’ Administration 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 Veteran’ Administration, 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 Veterans’ Administration. “(d) (1) Not later than December 1 of each year, the director of each Veterans’ Administration medical center shall transmit to the Administrator 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, the Administrator 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. “(e) For the purposes of this section: “(1) The term ‘health-care item’ 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 65, 66, or 73. Such term does not include perishable items. “(2) The term ‘local contract’ means a contract entered into by a Veterans’ Administration 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 Veterans’ Administration, for an item.”. 102 STAT. 545 (2) The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 5024 the following new item: “5025. Procurement of health-care items.”. (b) Effective Dates.— (1) Subsection (b)(1) of section 5025 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. (2) Subsection (b)(3) of such section shall apply to health-care items procured for use by the Veteran’ Administration after September 30, 1990.