[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[Extensions of Remarks]
[Pages 410-411]
[From the U.S. Government Publishing Office, www.gpo.gov]




 THE VETERANS HEALTH CARE ITEMS PROCUREMENT REFORM AND IMPROVEMENT ACT 
                                OF 2002

                                 ______
                                 

                            HON. LANE EVANS

                              of illinois

                    in the house of representatives

                       Tuesday, January 29, 2002

  Mr. EVANS. Mr. Speaker, the procurement of medical and surgical items 
is a major expenditure for the Department of Veterans Affairs. During 
fiscal year 2001, for example, VA reported spending more than $1.3 
billion for medical and surgical supplies and equipment. The 
procurement of medical and surgical supplies and equipment by VA is 
also an activity in need of significant reform and improvement. To 
achieve these reforms, I am today introducing ``Veterans Health Care 
Items Procurement Reform Improvement Act of 2002.'' I urge my 
colleagues to support and promptly enact this important legislation.
  A major provision of the ``Veterans Health Care Items Procurement 
Reform and Improvement Act of 2002'' directs the Department of Veterans 
Affairs, when procuring medical/surgical supplies and equipment, to buy 
these items from the Federal Supply Schedule (FSS) or from national 
contracts negotiated by VA. By requiring most VA health medical/
surgical supplies and equipment to be purchased from the FSS or 
national contracts, VA can better leverage the tremendous purchasing 
power of its annual budget in excess of $1 billion for medical/surgical 
supplies and equipment. When enacted, this legislation is expected to 
reduce VA procurement costs by tens of millions of dollars annually.
  This legislation also provides for certain limited exceptions to the 
centralized procurement requirement. For example, it allows emergency 
purchases of medical/surgical supplies and equipment from other than 
FSS or national contracts and permits purchases of needed items not 
listed on the FSS. Other limited exceptions should facilitate greater 
financial savings from--and greater use of--important initiatives such 
as VA/DOD sharing and small business procurement.

[[Page 411]]

  In a May 15, 2001 assessment entitled, ``Evaluation of the Department 
of Veterans Affairs Purchasing Practices``, the VA Office of Inspector 
General (OIG) reported, ``The Department of Veterans Affairs is not 
leveraging its buying power to obtain the best prices for items 
purchased.'' Among the recommendations of the OIG were, ``VA facilities 
be required to purchase items that are on national contracts, such as 
FSS, and that the FSS and other national contracts be mandatory sources 
of medical/surgical supplies and equipment'' and local procurement 
contracts be specifically prohibited with very limited exceptions.
  This measure will provide strong encouragement to vendors who wish to 
do business with VA to list their health-care items on part 65 and 66 
of the Federal Supply Classification as appropriate or as part of a 
National contract. This legislation will eliminate existing 
inefficiencies from the current acquisition system that allows for 
multiple, locally-negotiated contracts with national vendors and 
distributors. Despite the enormous volume of health care items procured 
by VA, these local contracts often do not provide VA purchasers with 
the best price offered by vendors to other buyers.
  In addition, this bill strengthens the contractual management and 
oversight tools of the Department of Veterans Affairs, It makes pre- 
and post-award contract audit clauses mandatory for almost all types of 
procurement contracts for health-care items. This will enable 
procurement officers, supervisors, the VA Office of the Inspector 
General, and the GAO to review the true value and cost of an item and 
assure compliance with contract provisions. In fiscal year 1997 when 
audit clauses were more common, audits accounted for the recovery of 
over $35 million dollars--last year with audit clauses less common the 
total recovery was less than $12 million dollars.
  Other important provisions of this legislation will require most VA 
procurement contracts to include a price reduction clause. With the 
inclusion of a price reduction clause, when a vendor offers a health-
care item at a lower price to another buyer in a commercial contract, 
VA will benefit from the purchase price reduction and receive the new 
lower purchase price for a health-care item it has previously agreed to 
purchase from the vendor.
  Mr. Speaker, I encourage my colleagues to support ``The Veterans 
Health Care Items Procurement Reform and Improvement Act of 2002,'' and 
seek its quick approval by Congress on behalf of our nation's veterans 
and taxpayers.

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