Key Issues > VA Acquisition Management - High Risk Issue
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VA Acquisition Management - High Risk Issue

The Department of Veterans Affairs (VA) spends about a third of its discretionary budget (tens of billions of dollars annually) on contracts for goods and services—and there are a number of longstanding problems with VA's contracting practices. VA Acquisition Management is a new high-risk area GAO added in 2019. VA must demonstrate greater leadership commitment and strategic planning to ensure efficient use of its acquisition funding and staffing resources.

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To effectively meet the needs of the 9 million veterans it serves, VA needs to more efficiently use its funding when it contracts for goods and services—such as medical supplies, information technology, and construction.

Photo of the VA Medical Center

GAO added VA Acquisition Management as a new high-risk area in 2019 due to longstanding problems with VA’s contracting practices and the significant taxpayer investment. It is imperative that VA demonstrate greater leadership commitment and improve its strategic planning to ensure that it uses its funding and staffing resources in the most efficient manner possible.

  • VA has been working on updating its acquisition regulations since 2011. The delay in completing this update has impeded the ability of contracting officers to carry out their duties effectively.
  • In contrast to the practices of leading private hospital networks, VA has not designed or communicated a strategy to standardize the way it procures medical supplies.
  • VA acquisition training has not always been comprehensive or provided to staff that could benefit from it. For example, many contracting officers stated they were uncertain about how to balance the Veterans First program’s preference for contracting with veteran-owned small businesses with the determination of a fair and reasonable price.
  • Contracting officers at the Veterans Health Administration process a large number of small-dollar-value actions—many of which involve emergency procurements of routine items to support immediate patient care. VA contracting leadership and staff stated that these frequent and urgent transactions reduce contracting officers’ efficiency and their ability to take a strategic view of procurement needs.
  • VA maintains two separate systems for contract management and accounting, resulting in duplicative efforts and increased risk of errors. This has been a known problem for about a decade. The department has selected a new integrated financial system, but it is not scheduled to be piloted until fiscal year 2020.
  • VA has had difficulty ensuring that its contracts are properly monitored and documented. For example, many contracts with veteran-owned small businesses did not include clauses requiring compliance with limits on subcontracting. Those limits ensure that the goal of the program—to promote opportunities for veteran-owned businesses—is not undermined.
  • Procurement leadership instability has made it difficult for VA to execute and monitor the implementation of key acquisition programs and policies. For example, the Medical Surgical Prime Vendor program—aimed at increasing the efficiency and cost-effectiveness of how VA facilities order supplies—has had four directors since its inception in 2014.

Over the past few years, the department has made some progress toward improving its contracting practices. For example, VA saved over $7 billion during fiscal years 2016 and 2017 by increasing the use of existing initiatives and implementing strategic sourcing (which helps leverage buying power by moving away from numerous individual procurements to a broader, aggregate approach).

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High Risk: VA Acquisition Management
  • portrait of Shelby S. Oakley
    • Shelby S. Oakley
    • Director, Contracting and National Security Acquisitions
    • oakleys@gao.gov
    • 202-512-4841