The Office of the Inspector General (OIG) of the Department of Veterans Affairs (VA) has found significant weaknesses in the planning, evaluation, and award of a series of acquisitions, determining the contracts were not developed or awarded in accordance with acquisition regulations and VA policy intended to ensure services acquired are based on need and at fair and reasonable prices.
The VA contracts in question are known as Patient-Centered Community Care (PC3) contracts, designed to provide veterans with a comprehensive, nationwide network of high quality, specialty health care services.
In September 2013, the VA awarded the PC3 contracts for an estimated $9.4 billion, with a potential cost to VA of $27 billion. The OIG found that contracting officials solicited proposals from vendors without clearly articulating VA’s requirements. Thus, the vendors bidding on the solicitation did not have sufficient information on the type of specialty health care services they would need to provide, where to provide them, and their frequency. Thus, according to the OIG “the VA increased the risk of not achieving the objectives of PC3 by inadequately identifying its health care service requirements.”
Documentation supporting vital contract award decisions was either not in VA’s Electronic Contract Management System or incomplete. Of the documents available, the OIG noted that the awarded costs were actually negotiated at a higher rate than originally proposed by one of the vendors. Among the OIG’s other findings:
- Evidence for negotiated cost decisions was not documented in the price negotiation memo.
- Accountability for ensuring the effective award of the PC3 contracts was not vested with a senior executive at VA.
- Although the contracting officer had the authority to execute these contracts, the level of oversight for this degree of contract risk did not provide reasonable assurance that VA’s interests were adequately protected.
The Veterans Access, Choice, and Accountability Act of 2014 (Choice) was enacted on August 7, 2014. According to VA’s Under Secretary for Health in a memo dated July 7, 2016, since implementing the Hierarchy of Care memorandum in May 2015, the use of Choice has increased tremendously, while PC3 use has dwindled. The OIG recommended the VA’s Principal Executive Director for Acquisition, Logistics, and Construction improve oversight and accountability, and ensure sufficient planning on all high dollar value and complex acquisitions. The Principal Executive Director concurred with the OIG’s recommendations and an acceptable corrective action plan was provided , the OIG reports.
Read the OIG’s full report at: http://www.va.gov/oig/pubs/VAOIG-15-01396-525.pdf