VA Memo Says Dept. Improperly Spends $6B Annually on Contracts
The Department of Veterans Affairs has spent at least $6 billion annually in violation of federal contracting rules in paying for supplies and medical care, which has put veterans at risk and wasted taxpayer dollars, according to an internal memo from a senior agency official, the Washington Post reports.
The memo, addressed to VA Secretary Robert McDonald, was written by VA Deputy Assistant Secretary for Acquisition and Logistics Jan Frye. In the role, Frye develops and supervises the department's practices for acquiring services and supplies, though he is not tasked with making purchases, according to the Post.
In the memo, Frye accused department heads of "gross mismanagement" and wrote that they made a "mockery" of federal acquisition laws relating to contract bidding.
According to Frye, VA officials violated federal rules regarding the use of purchase cards, which generally are intended to make minor purchases of up to $3,000. Frye wrote that the cards have been used to purchase several billion dollars' worth of medical supplies without contracts. For example, he noted that the cards were used to purchase as much as $1.2 billion worth of prosthetics without a contract over an 18-month period.
Frye also noted that VA has not engaged in competitive bidding and failed to sign contracts with outside providers that offer care VA cannot provide. According to Frye, the department has paid at least $5 billion in fees for such services. He noted this violates federal rules VA's general counsel since 2009 has said need to be followed.
In addition, Frye wrote that many products -- such as prosthetics and daily medical supplies -- were purchased without competitive bidding and appropriate measures to ensure care quality, effective use of funding and adequate government oversight.
Moreover, Frye noted that he repeatedly brought his concerns to fellow senior officials but was ignored. Further, he wrote that department officials misled Congress when probed about questionable practices.
The memo noted that VA leaders had several chances to revise purchasing practices.
Frye is scheduled to testify before the House Committee on Veterans' Affairs on Thursday about fraud and waste in the purchasing program.
VA spokesperson Victoria Dillon in a statement said certain care paid for by VA does not fall under federal acquisition law. Dillon also said VA is trying to manage an increase in medical care from outside providers. Authorizations for such care increased by 46% in the first months of this year, compared with the same period last year.
Dillon noted the department is seeking action in Congress that would allow an "expedited form of purchasing care" for veterans who need care from outside VA. According to Dillon, the legislation "would also resolve legal uncertainties that have arisen" about purchasing agreements not required by federal acquisition regulations (Rein/Wax-Thibodeaux, Washington Post, 5/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.