2801 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies for the obligation of service contract buy-outs under the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics (PACT) Act of 2022.

Key points covered in this chapter:

• VA will identify the potential for a Contract Buy-Out Program (CBOP) incentive authorized under Section 902 of the PACT Act when recruiting especially difficult to fill medical occupations in rural areas;
• VA will limit CBOP incentives to no more than $40 million per fiscal year; and
• The use of a miscellaneous vendor code is not permitted for service contract buy-out obligations; recipients must be individually vendorized.

2802 Revisions

Section	Revision	Office	Reason for Change	Effective Date
Various	New policy	OFP	Reorganized chapters	April 2026

2803 Definitions

Obligation – A legally binding agreement that will result in outlays, immediately or in the future. An obligation is a legal liability of the Government against an available appropriation.

Non-Contractual Obligation – Obligations with special statutory authority or other regulatory authority exempting the obligation from Federal Acquisition Regulations (FAR). There are instances where these obligations may be generally defined as a contract (agreement between two parties), but these obligations do not follow FAR-based procedures.

Non-Department Service Contract – Contractual obligation of the non-Department individual’s employment with their non-VA health care system, hospital, or private practice.

Rural/Highly Rural – Rural-urban commuting area coding system of the Department of Agriculture. Veterans Health Administration (VHA) facilities identified as rural/highly rural are listed in Appendix B, Rural and Highly Rural VHA Medical Facilities.

2804 Roles and Responsibilities

Medical Center Directors are responsible for authorizing Contract Buy-Out Program (CBOP) payments when required program actions are complete in accordance with VHA Directive 5112.

Administration and Staff Office Chief Financial Officers (CFOs) are responsible for ensuring the proper processing of service contract buy-out obligations in accordance with the guidelines in this policy.

2805 Policies

280501 General Policies

1. Section 902 of Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022 (PACT Act, P.L. 117-168) authorizes VA to buy out existing non-Department service contracts for certain medical occupations in exchange for a commitment to stay at least four years working in a rural or highly rural area (as defined by the Department of Agriculture).
2. VA will identify the Contract Buy-Out Program (CBOP) incentive in the recruitment notice when authorized in recruiting physicians, nurse anesthetists, physician assistants, or nurse practitioners to positions in rural or highly rural areas.
3. VA will comply with the requirements of the Veterans Health Administration (VHA) Directive 5112, VHA Contract Buy-Out Program.
4. VA’s buyout authority is scheduled to end September 30, 2027, unless extended.
5. When a CBOP Memorandum of Agreement has required signatures of the candidate, the VA medical facility director, the Veterans Integrated Service Network (VISN) Chief Financial Officer (CFO), VISN Director, and the CBOP Manager, Workforce Management and Consulting, VA will notify the candidate and the facility director will sign the payment obligation.
6. The Government Purchase Card (GPC) will be used to the maximum extent practical for these agreements. A non-contractual obligation will be used only when a vendor does not accept GPC as method of payment or the amount exceeds GPC purchasing thresholds.
7. In accordance with 38 U.S.C. § 7401, payment of any amount for buy-out of a service contract for a covered health care professional shall be made directly to the individual or entity with which the covered health care professional has a service obligation.
8. The amount to be recorded on the obligation is the amount agreed upon in the CBOP agreement.
9. An obligation will be recorded at the time the Medical Center Director approves the CBOP agreement.
10. Documentation required in accordance with 31 U.S.C. § 1501 for service contract buy-out obligations includes a copy of the CBOP agreement signed by both VA and the health care professional.
11. VA will retain documents supporting the buy-out obligation in accordance with National Archives and Records Administration (NARA) requirements.
12. The entity being paid related to a contract buy-out must be individually vendorized; use of a miscellaneous vendor code is not permitted.
13. Local finance office staff will ensure obligations adhere to the requirements for all Government obligations, established in Volume III, Chapter 2 – Obligations.

280502 Integrated Financial and Acquisition Management Service (iFAMS)

1. When recording a service contract buy-out obligation in iFAMS, a non-contractual obligation document must be used.
2. The document type for obligation is Standard Obligation (non-acquisitions obligation) (OSE).
3. Payment will be issued by Electronic Funds Transfer (EFT) via iFAMS using document type PAE, Enterprise Payment Authorization.

280503 Financial Management Service (FMS)

1. When recording a service contract buy-out obligation in FMS, a miscellaneous obligation document (e.g., VA Form 1358) must be used.
2. Authorized use #20, sub-code ‘A’ must be used when recording the obligation in FMS.
3. Payment will be made by electronic funds transfer (EFT).

2806 Authorities and References

• United States Codes (U.S.C.)
  • 31 U.S.C. § 1501, Documentary evidence requirement for Government obligations
• P.L. 117-168, PACT Act
• GAO Redbook Chapter 7, Obligation of Appropriations, § B1g, Administrative Approval of Payment
• Federal Acquisition Regulation
• NARA General Records Schedule for Financial Management and Reporting Records
• VA Financial Policy
  • Volume III, Chapter 2 – Obligations
  • Volume III, Chapter 4 – 1358 Obligations
• VA Form 1358, Obligation or Change in Obligation
• VHA Publications
  • VHA Directive 5112, VHA Contract Buy-Out Program

2807 Rescissions

None.

Appendix A: Previous Policy Revisions

None.

Appendix B: Rural and Highly Rural VHA Medical Facilities

This facility listing extends to several of the Community Based Outpatient Clinics (CBOCs) associated with these facilities.

                                                Medical and Regional Office Center, Health

VA Station Number            Care System, or Medical Center Location

            402                                         Togus, ME

            405                                         White River Junction, VT

            436                                         Fort Harrison, MT

            519                                         Big Spring, TX

            528N                                      Bath, NY

            529                                         Butler, PA

            538                                         Chillicothe, OH

            540                                         Clarksburg, WV

            557                                         Dublin, GA

            568                                         Fort Meade, SD

            585                                         Iron Mountain, MI

            610                                         Marion, IN

            623                                         Muskogee, OK

            653                                         Roseburg, OR

            657                                         Poplar Bluff, MO

            666                                         Sheridan, WY

            676                                         Tomah, WI