VA Health Care: Status of Inspector General Recommendations for  
Health Care Services Contracting (31-OCT-07, GAO-08-61R).	 
                                                                 
The Department of Veterans Affairs (VA) operates one of the	 
largest health care systems in the nation. For fiscal year 2007, 
VA estimates that it will provide health care to more than 5	 
million veterans, either in its own facilities or through other  
health care providers. During the past decade, the numbers of VA 
patients and the costs for treating them have increased rapidly, 
due in part to an expansion in the number of veterans eligible to
receive care. The Veterans Health Administration (VHA)--the VA	 
entity responsible for the health care of veterans--spends about 
$35 billion a year providing health care to veterans, including  
more than $7 billion to acquire health care services and	 
products. In its own health care facilities, VHA contracts for a 
broad range of medical services such as anesthesiology, for other
services that support the delivery of medical care such as	 
facility maintenance and laundry services, and for products such 
as medical equipment, food, and hospital linens. It also	 
contracts for medical care for veterans provided in non-VA	 
hospitals and community based clinics. Contracting for services  
at VHA represents a large and growing proportion of total	 
contract spending. In an effort to improve the operation of VHA's
health care system, VA's Inspector General (IG) conducted reviews
of individual VHA facilities through structured site visits with 
teams of IG officials from fiscal year 1999 through fiscal year  
2006. These teams included officials from three IG		 
offices--Audit, Health Care Inspections, and Investigations.	 
These reviews, known as the Combined Assessment Program (CAP),	 
focused in part on actions to increase the efficiency and	 
effectiveness of VHA's contracting. The IG issued a summary	 
report in September 2006 on the results of these CAP reviews,	 
including summaries of recommendations made to address systemic, 
recurring deficiencies in the planning, management, and oversight
of service contracts. In addition the IG issued other reports in 
recent years on weaknesses in VHA health care contracting.	 
Congress requested that GAO review the recommendations made by	 
the VA IG to improve the award and administration of service	 
contracts for veterans' health care, and VA's efforts to	 
implement these recommendations. In this report GAO identifies	 
(1) the recurring themes among the key recommendations from	 
recent reports of the IG concerning VHA's award and		 
administration of service contracts for veterans' health care,	 
and (2) the current status of VHA's implementation of the	 
recommendations, according to VA data.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-61R 					        
    ACCNO:   A77801						        
  TITLE:     VA Health Care: Status of Inspector General	      
Recommendations for Health Care Services Contracting		 
     DATE:   10/31/2007 
  SUBJECT:   Audits						 
	     Contract administration				 
	     Federal procurement				 
	     Federal procurement policy 			 
	     Health care facilities				 
	     Health care programs				 
	     Health care services				 
	     Human capital management				 
	     Investigations into federal agencies		 
	     Managed health care				 
	     Service contracts					 
	     Veterans hospitals 				 
	     Veterans' medical care				 
	     VA Combined Assessment Program			 

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GAO-08-61R

   

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October 31, 2007: 

The Honorable Bob Filner: 
Chairman: 
The Honorable Steve Buyer: 
Ranking Member: 
Committee on Veterans' Affairs: 
House of Representatives: 

Subject: VA Health Care: Status of Inspector General Recommendations 
for Health Care Services Contracting: 

The Department of Veterans Affairs (VA) operates one of the largest 
health care systems in the nation. For fiscal year 2007, VA estimates 
that it will provide health care to more than 5 million veterans, 
either in its own facilities or through other health care providers. 
During the past decade, the numbers of VA patients and the costs for 
treating them have increased rapidly, due in part to an expansion in 
the number of veterans eligible to receive care.[Footnote 1] The 
Veterans Health Administration (VHA)--the VA entity responsible for the 
health care of veterans--spends about $35 billion a year providing 
health care to veterans, including more than $7 billion to acquire 
health care services and products. In its own health care facilities, 
VHA contracts for a broad range of medical services such as 
anesthesiology, for other services that support the delivery of medical 
care such as facility maintenance and laundry services, and for 
products such as medical equipment, food, and hospital linens. It also 
contracts for medical care for veterans provided in non-VA hospitals 
and community based clinics. Contracting for services at VHA represents 
a large and growing proportion of total contract spending. 

In an effort to improve the operation of VHA's health care system, VA's 
Inspector General (IG) conducted reviews of individual VHA facilities 
through structured site visits with teams of IG officials from fiscal 
year 1999 through fiscal year 2006. These teams included officials from 
three IG offices--Audit, Health Care Inspections, and Investigations. 
These reviews, known as the Combined Assessment Program (CAP), focused 
in part on actions to increase the efficiency and effectiveness of 
VHA's contracting. The IG issued a summary report in September 2006 on 
the results of these CAP reviews, including summaries of 
recommendations made to address systemic, recurring deficiencies in the 
planning, management, and oversight of service contracts.[Footnote 2] 
In addition the IG issued other reports in recent years on weaknesses 
in VHA health care contracting.[Footnote 3] 

You requested that we review the recommendations made by the VA IG to 
improve the award and administration of service contracts for veterans' 
health care, and VA's efforts to implement these recommendations. In 
this report we identify (1) the recurring themes among the key 
recommendations from recent reports of the IG concerning VHA's award 
and administration of service contracts for veterans' health care, and 
(2) the current status of VHA's implementation of the recommendations, 
according to VA data. 

To identify recurring themes among key recommendations from recent 
reports on VA's award and administration of veterans' health care 
service contracts, we used a multistep process. First, we identified 
relevant IG reports. We identified 190 IG reports on the IG's Web site 
concerning VHA during fiscal years 2004, 2005, and 2006. Second, we 
reviewed each report to identify the 410 recommendations that concerned 
the award and administration of service contracts for veterans' health 
care. Third, we identified which of these were key recommendations 
based on factors that our prior work has shown to be important 
components of a sound acquisition system, such as clear requirements, 
open competition, adequate contract surveillance, and sufficient 
numbers of trained acquisition professionals.[Footnote 4] Fourth, we 
identified recurring themes among the key recommendations by analyzing 
whether there were any discernable patterns or logical groupings among 
those recommendations and determining the frequency with which the 
recommendations fell into various categories. 

To determine the status of VA's implementation of the key 
recommendations, according to VA data, we reviewed the comments 
contained in the CAP reports from the responsible facility director on 
plans to implement each recommendation. We also reviewed the system 
maintained by the VA IG for tracking implementation of recommendations 
and VHA's system for tracking such implementation. To test the data in 
both systems, we compared the information from the IG's written reports 
to the information in both systems, compared information in each system 
to the other, and discussed the information with IG and VHA officials 
who maintain their respective systems to determine the disposition of 
any unimplemented recommendations as of March 31, 2007. We determined 
that the data were adequate for our purposes. We did not independently 
verify the implementation status of any of the recommendations, nor did 
we assess their merit. We conducted our review from March through 
October 2007 in accordance with generally accepted government auditing 
standards. 

Results in Brief: 

We identified five recurring themes among the 214 key recommendations 
contained in recent VA IG reports concerning service contracts for 
veterans' health care. Three of these themes track the phases of the 
procurement process--pre-award, award, and post-award--and account for 
about 61 percent of the key recommendations we identified. For the pre- 
award phase, the IG recommended that contracting officers request pre- 
award audits when needed, and that VHA facilities ensure that legal and 
technical reviews are conducted on large-dollar contracts. In awarding 
contracts, the IG recommended that contracting officers explain the 
rationale for the award in price negotiation memoranda and conduct 
background checks once a contractor is selected prior to contract 
performance. The post-award recommendations focused mostly on payment 
issues such as verifying invoices and taking action to identify and 
recover overpayments. In addition to these themes, we also identified 
two other overarching recurring themes--human capital and management 
concerns--that account for about 39 percent of the key recommendations 
we identified. About one quarter of the key recommendations involved 
human capital issues--such as ensuring the timely appointment and 
ongoing training of contracting officers' technical representatives, 
the staff who oversee contractor performance--while the remainder 
focused on the need to ensure compliance with applicable laws and 
regulations through management oversight of contracting activity. 

According to VA data, all the key acquisition-related recommendations 
we identified in recent VA IG reports have been implemented. In 
general, managers of the VHA facilities that were reviewed as part of 
the IG's Combined Assessment Program had taken at least some action in 
response to the IG's recommendations before the reviews had been 
completed or in some cases had prepared plans for taking action, as 
detailed in the IG reports. Our analysis of the key recommendations 
shows that the IG made the same or similar recommendations at many VA 
facilities. The VA IG Office of Audit told us that the issues that led 
to the same or similar recommendations being made at many facilities 
may be evidence of recurring and systemic issues throughout VA, and is 
therefore changing the way it conducts reviews to take a more 
agencywide approach to these issues. 

VA reviewed a draft of this report and stated that it agreed with the 
facts as presented. 

Background: 

VA's Office of Inspector General (IG) was established under the 
Inspector General Act of 1978.[Footnote 5] Under this act, the IG is 
responsible for, among other things: (1) conducting and supervising 
audits and investigations; (2) recommending policies to promote economy 
and efficiency in program administration, and to prevent and detect 
criminal activity, waste, abuse, and mismanagement in VA programs and 
operations; and (3) keeping the Secretary of Veterans Affairs and 
Congress fully informed about problems and deficiencies in VA programs 
and operations and the need for corrective action. In addition, the IG 
has the authority under the Inspector General Act to inquire into all 
VA programs and activities as well as the related activities of persons 
or parties performing under grants, contracts, or other agreements. 
These inquiries may include audits, investigations, inspections, or 
other special reviews. 

In January 1999, the Combined Assessment Program (CAP) was established 
as part of the IG's efforts to ensure that quality health care services 
are provided to our nation's veterans by fostering integrity, 
accountability, and excellence and to recommend actions to address 
issues impacting VA's programs and activities. CAP reviews from fiscal 
year 1999 through fiscal year 2006 provided for oversight of services 
provided to veterans through Veterans Administration Medical Centers 
(VAMC) and VA health care system operations. Assessments of key 
operations and programs at VA medical facilities were conducted by IG 
teams that consisted of representatives from the Offices of Healthcare 
Inspections, Audit, and Investigations, who: 

* evaluated how well VA facilities were accomplishing their missions of 
providing veterans convenient access to high quality medical services; 

* determined if management controls ensured compliance with VA and 
executive-branchwide regulations and VA policies, assisted management 
in achieving program goals, and minimized vulnerability to fraud, 
waste, and abuse; and: 

* provided fraud and integrity awareness training to increase employee 
understanding of the potential for program fraud and the requirement to 
refer suspected criminal activity to the IG. 

Between fiscal years 2004 and 2006, the focus of our report, the IG 
conducted CAP reviews at virtually all 160 VA facilities. The IG also 
did 15 revisits. In total, this effort resulted in the issuance of 178 
CAP review reports. The IG also issued 12 other reports on VHA service 
contracting. In addition, the IG submitted semiannual reports to 
Congress highlighting the activities and accomplishments of the IG for 
the period, including a summary of the CAP reports issued as well as 
the disposition of unimplemented recommendations. 

The requirements that apply to VHA service contracting are contained in 
the Federal Acquisition Regulation (FAR) and in the agency-specific 
Veterans Affairs Acquisition Regulation (VAAR). For example, Part 873 
of the VAAR implements 38 U.S.C. ï¿½ 8153, which provides authority for 
VA to enter into contracts for the mutual use or exchange of use of 
health care resources between the department and any health care 
provider or other entity. In addition, VA has various departmental 
policies and guidance materials that govern specific aspects of the 
acquisition process. 

Five Recurring Themes Identified Among Key IG Recommendations: 

We identified five recurring themes among the 214 key recommendations 
contained in recent VA IG reports concerning service contracts for 
veterans' health care.[Footnote 6] Three of these themes track the 
phases of the procurement process--pre-award, award, and post-award-- 
and account for about 61 percent of the key recommendations we 
identified. Two other overarching recurring themes--human capital and 
management concerns[Footnote 7]--account for about 39 percent of the 
key recommendations we identified. See table 1 for recurring themes and 
their component key recommendations. 

Table 1: Recurring Themes and Key Recommendations: 

Recurring themes: Phases of the procurement process (61 percent of all 
key recommendations): Pre-award; 
Key types of recommendations: Phases of the procurement process (61 
percent of all key recommendations): Pre- award audits should be done 
for all noncompetitive contracts with estimated values of $500,000 or 
more; 
Frequency of key recommendations: Phases of the procurement process (61 
percent of all key recommendations): 22. 

Recurring themes: Phases of the procurement process (61 percent of all 
key recommendations): Pre-award; 
Key types of recommendations: Phases of the procurement process (61 
percent of all key recommendations): Obtain required legal and 
technical reviews; 
Frequency of key recommendations: Phases of the procurement process (61 
percent of all key recommendations): 20. 

Recurring themes: Phases of the procurement process (61 percent of all 
key recommendations): Award; 
Key types of recommendations: Phases of the procurement process (61 
percent of all key recommendations): Prepare price analyses and 
document the rationale for awarding contracts in price negotiation 
memorandums; 
Frequency of key recommendations: Phases of the procurement process (61 
percent of all key recommendations): 31. 

Recurring themes: Phases of the procurement process (61 percent of all 
key recommendations): Award; 
Key types of recommendations: Phases of the procurement process (61 
percent of all key recommendations): Contracting officers must initiate 
background investigations prior to contract performance; 
Frequency of key recommendations: Phases of the procurement process (61 
percent of all key recommendations): 12. 

Recurring themes: Phases of the procurement process (61 percent of all 
key recommendations): Post-award; 
Key types of recommendations: Phases of the procurement process (61 
percent of all key recommendations): Verify and certify the accuracy of 
invoices prior to payment; 
Frequency of key recommendations: Phases of the procurement process (61 
percent of all key recommendations): 29. 

Recurring themes: Phases of the procurement process (61 percent of all 
key recommendations): Post-award; 
Key types of recommendations: Phases of the procurement process (61 
percent of all key recommendations): Review all contracts to identify 
and collect actual overpayments; 
Frequency of key recommendations: Phases of the procurement process (61 
percent of all key recommendations): 17. 

Recurring themes: Overarching themes (39 percent of all key 
recommendations): Human capital; 
Key types of recommendations: Overarching themes (39 percent of all key 
recommendations: Provide contracting officers (CO) and COs Technical 
Representatives (COTR) initial and annual refresher training on their 
roles and responsibilities; 
Frequency of key recommendations: Overarching themes (39 percent of all 
key recommendations: 34. 

Recurring themes: Overarching themes (39 percent of all key 
recommendations): Human capital; 
Key types of recommendations: Overarching themes (39 percent of all key 
recommendations): Ensure COTRs are designated in writing and verify 
that appointments are current and appropriate; 
Frequency of key recommendations: Overarching themes (39 percent of all 
key recommendations): 11. 

Recurring themes: Overarching themes (39 percent of all key 
recommendations): Management; 
Key types of recommendations: Overarching themes (39 percent of all key 
recommendations): Ensure all applicable Federal Acquisition Regulation 
and Veterans Affairs Acquisition Regulation requirements are met; 
Frequency of key recommendations: Overarching themes (39 percent of all 
key recommendations): 29. 

Recurring themes: Overarching themes (39 percent of all key 
recommendations): Management;
Key types of recommendations: Overarching themes (39 percent of all key 
recommendations): Ensure contracting officers do not exceed their 
warrant authority; 
Frequency of key recommendations: Overarching themes (39 percent of all 
key recommendations): 9. 

Total key recommendations; 
Key types of recommendations: [Empty]; 
Frequency of key recommendations: 214. 

Source: GAO analysis of VA IG reports. 

[End of table] 

With respect to the pre-award phase, we identified two types of key 
recommendations. The first is that pre-award audits should be done for 
all noncompetitive contracts with estimated values of $500,000 or more. 
The IG found 22 occasions where contracting officers had awarded this 
type of contract without requesting the required audits. These 
practices were not consistent with VHA Directive 99-056, which expired 
in 2004, and are not consistent with VA Directive 1663, which was 
issued in August 2006. These directives require that a pre-award audit 
be done by the IG's Contract Review and Evaluation Division on all 
contract proposals valued at $500,000 or more that were awarded on a 
sole-source basis. According to IG CAP reports, historically pre-award 
audits have resulted in contract prices significantly lower than what 
had been proposed.[Footnote 8] 

The second type of key recommendation in the pre-award area concerned 
the failure to obtain required legal and technical reviews--which help 
ensure that contracts meet all relevant requirements. The IG found 
several situations in which contracting officers failed to obtain such 
reviews in the pre-award phase, and made 20 related recommendations. 
The VAAR requires legal and technical reviews by the VA Office of 
Acquisition and Materiel Management for contracts for the acquisition 
of health care resources with an estimated value of $1.5 million or 
more. Such reviews are also required for sole-source solicitations of 
$500,000 or more for the acquisition of health care resources, in 
addition to an IG pre-award audit. 

For the contract award phase, there were also two key types of 
recommendations. The first relates to preparing price analyses and 
documenting the rationale for contract pricing. To help ensure that 
prices are fair and reasonable, the FAR requires that contracting 
officers prepare price negotiation memoranda (PNM) and conduct cost or 
price analyses for negotiated procurement contracts. The FAR also 
requires that the contracting officers document any significant 
differences between a contractor's and a contracting officer's 
positions. Despite this requirement, 31 IG recommendations addressed 
situations in which contracting officers had failed to prepare price 
analyses or document the rationale for awarding contracts in price 
negotiation memoranda. 

The second key type of recommendation for the contract award phase was 
related to background investigations once a contractor is selected 
prior to contract performance. VA policy requires contracting officers 
to initiate background investigations of contract personnel with access 
to VA computer systems and sensitive information. The IG made 12 
recommendations related to contracting officers not initiating such 
investigations prior to contract performance. 

For the post-award phase, we identified two key types of 
recommendations concerning the FAR requirement that contracting 
officers protect the government's interests. In several reviews, the IG 
determined that a number of sites under review had not: 

* verified and certified the accuracy of invoices prior to payment, or: 

* reviewed all invoices to identify and collect actual overpayments. 

As a consequence, the IG made 29 recommendations concerning invoices 
that had not been certified for accuracy, resulting in inaccurate 
payments for services rendered. Such practices are in conflict with 
provisions of the Contracting Officer's Technical Representative (COTR) 
Handbook, which recommend the review of contractor invoices to ensure 
that the services provided were authorized and amounts billed complied 
with contract terms. Seventeen other recommendations addressed 
situations in which invoices had been improperly certified and 
contractors overpaid after the contracts had expired, and called for 
identification and collection of actual overpayments. 

In addition to recurring themes related to the phases of the 
procurement process, there were two overarching themes of human capital 
and management issues among key IG recommendations. The human capital 
issues include two key types of recommendations. First, VHA needs to 
upgrade the skills of contracting officers and COTRs through more 
effective training. Although VHA policy requires that COTRs receive 
initial training and 40 hours of continuing education in acquisition 
subjects every 2 years, the IG's review of training records found that 
many COTRs had received neither. As a consequence, during the last 3 
fiscal years, the IG made 34 recommendations calling for initial and 
annual refresher training on roles and responsibilities for both 
contracting officers and COTRs. 

Another key type of recommendation addressing the human capital theme 
involved findings by the IG of numerous instances in which the files 
contained no documentation that officially assigned employees as COTRs. 
VA policy requires that a COTR be assigned in writing to monitor 
contract performance to ensure that services are provided consistent 
with contract terms. That documentation should be maintained in the 
contract file. COTRs may not redelegate their authority, and if they 
can no longer perform their duties, the contracting officer should 
appoint new COTRs. The IG made 11 recommendations that COTR 
designations be in writing and that the appointments be current and 
appropriate. 

The recurring management theme we identified includes two key types of 
recommendations. The first is to ensure that VHA is in compliance with 
the FAR, VAAR, and VA policy. In particular this key recommendation 
focuses on improving oversight of contracting through thorough and 
complete contract file reviews and by ensuring that contracting 
officers and COTRs perform duties as required. The IG made 29 
recommendations to ensure all such requirements would be met, with the 
intention of protecting VA's interest and minimizing risk to the 
contracting process. 

Second, the FAR and VAAR authorize limiting contracting officer 
authority to contract value thresholds as established in their 
warrants; these thresholds are established to ensure that the officers 
only engage in procurements commensurate with their level of education, 
experience, and training. The IG made nine recommendations to ensure 
that contracting officers not award contracts in excess of their 
established authority. 

VA Data Show That IG Recommendations Implemented: 

According to VA data, all of the key acquisition-related 
recommendations we identified in recent VA IG reports have been 
implemented at the facilities for which the recommendations were made. 
In general, managers of the VHA facilities that were reviewed as part 
of the IG's Combined Assessment Program had taken at least some action 
in response to the IG's recommendations before the review had been 
completed, or in some cases had prepared plans for taking action, as 
detailed in the IG reports. The facility's action plan for addressing 
each recommendation is outlined in the CAP report along with the 
organization responsible for executing the action plan as well as the 
date by which the remedy is to be implemented. 

Separate VA IG and VHA databases confirm that the key acquisition- 
related recommendations have been implemented.[Footnote 9] In addition, 
VA has developed a buying guide to help VA improve its contracting for 
health care services.[Footnote 10] According to VA officials, VA has 
also taken other steps to improve the acquisition process such as 
developing standard operating procedures for procurement and 
contracting. However, this does not mean that all contracting issues 
have necessarily been resolved agencywide. Our analysis of the key 
recommendations we identified shows that the IG made the same or 
similar recommendations at many VA facilities. Moreover, the IG's 
report on recurring and systemic issues identified during CAP reviews 
at VA facilities acknowledged that while facility managers have 
provided acceptable implementation plans and taken corrective actions 
in response to specific CAP review recommendations, there is a need to 
institute comprehensive and rigorous oversight to realize continuing 
improvements. The frequency with which certain deficiencies were 
identified during the CAP reviews suggests there may be systemic 
issues. 

VA IG's Office of Audit is now concentrating more on broader audits 
encompassing more than one program site to take a more agencywide 
approach at addressing deficiencies.[Footnote 11] For example, the IG 
has done a review on VA disbursement agreements for senior medical 
residents at four VA medical centers and another review on certain VA 
acquisitions for other government agencies.[Footnote 12] These reviews 
involved multiple medical centers and facilities and the 
recommendations were implemented at the Veterans Integrated Service 
Network (VISN) level or agencywide. In addition, the IG conducted a 
local review with potential agencywide implications based on its review 
of mismanagement of federal funds at the VA Boston Healthcare 
System.[Footnote 13] The recommendations resulted in procedural changes 
concerning contract administration that were implemented VISN-wide, 
which affected several facilities. 

The IG is currently working on three other broader audits---VA 
purchases made on behalf of the Department of Defense, acquisition and 
management of surgical device implants, and VHA durable medical 
equipment. According to the IG, these broader audits will enhance the 
IG's efforts to provide effective oversight and address the complexity 
and scope of VA's diverse mission and help address issues agencywide. 

Agency Comments: 

VA reviewed a draft of this report and sent us comments by e-mail. VA 
stated that it agreed with the facts presented in the draft. 

We will send a copy of this report to the Secretary of Veterans 
Affairs, appropriate congressional committees, and other interested 
parties. We will also make copies of this report available to others on 
request. In addition, this report will be available on GAO's Web site 
at [hyperlink, http://www.gao.gov]. If you or your staff have any 
questions, please contact Laurie Ekstrand at (202) 512-7114 or 
[email protected] or William T. Woods at (202) 512-4841 or 
[email protected]. Contact points for our Offices of Congressional 
Relations and Public Affairs may be found on the last page of this 
report. Key contributors to this report were James Musselwhite, 
Assistant Director; Myra Watts Butler; Leanna Parkey; and Robert 
Swierczek. 

Signed by: 

Laurie E. Ekstrand: 

Director, Health Care: 

and: 

William T. Woods: 

Director, Acquisition and Sourcing Management: 

[End of section] 

Related GAO Products: 

Federal Contracting: Use of Contractor Performance Information. GAO-07- 
1111T. Washington, D.C.: July 18, 2007. 

Contract Management: Further Action Needed to Improve Veterans Affairs 
Acquisition Function. GAO-06-144. Washington, D.C.: October 19, 2005. 

Guidance: Framework for Assessing the Acquisition Function at Federal 
Agencies. GAO-05-218G. Washington, D.C.: September 27, 2005. 

Contract Management: Opportunities Continue for GSA to Improve Pricing 
of Multiple Award Schedules Contracts. GAO-05-911T. Washington, D.C.: 
July 26, 2005. 

Contract Management: Opportunities to Improve Surveillance on 
Department of Defense Service Contracts. GAO-05-274. Washington, D.C.: 
March 17, 2005. 

Contract Management: Opportunities to Improve Pricing of GSA Multiple 
Award Schedules Contracts. GAO-05-229. Washington, D.C.: February 11, 
2005. 

Contract Management: Further Efforts Needed to Sustain VA's Progress in 
Purchasing Medical Products and Services. GAO-04-718. Washington, D.C.: 
June 22, 2004. 

Contract Management: Civilian Agency Compliance with Revised Task And 
Delivery Order Regulations. GAO-03-983. Washington, D.C.: August 29, 
2003. 

Acquisition Workforce: Agencies Need to Better Define and Track the 
Training of Their Employees. GAO-02-737. Washington, D.C.: July 29, 
2002. 

Contract Management: Service Contracting Trends and Challenges. GAO-01- 
1074R. Washington, D.C.: August 22, 2001. 

[End of section] 

Footnotes: 

[1] The Veterans' Health Care Eligibility Reform Act of 1996 simplified 
eligibility standards for veterans in need of hospital and outpatient 
care and made available services that previously had not been made 
available to veterans without service-connected disabilities or low 
incomes. See Pub. L. No. 104-262, ï¿½ï¿½ 101, 104, 110 Stat. 3177, 3178-81, 
and 3182-84. 

[2] Department of Veterans Affairs, Office of Inspector General, Review 
of Recurring and Systemic Issues Identified During Combined Assessment 
Program Reviews at VA Facilities, Report No. 06-03441-227 (Washington, 
D.C.: Sept. 25, 2006). 

[3] Department of Veterans Affairs, Office of Inspector General, Issues 
at VA Medical Center Bay Pines, Florida and Procurement and Deployment 
of the Core Financial and Logistics System (CoreFLS), Report No. 04- 
01371-177 (Washington, D.C.: Aug. 11, 2004); Evaluation of VHA Sole- 
Source Contracts with Medical Schools and Other Affiliated 
Institutions, Report No. 05-01318-85 (Washington, D.C.: Feb. 16, 2005). 

[4] See list of related GAO products at the end of this report. 

[5] Pub. L. No. 95-452, 92 Stat. 1101 (codified as amended at 5 U.S.C. 
app. 3, ï¿½ï¿½ 1-12). 

[6] There were also 196 non-key recommendations, which focused mainly 
on documentation issues. 

[7] Human capital permeates virtually every effort within an agency, 
including successfully acquiring goods and services and executing and 
monitoring contracts. Management of the acquisition function is 
generally dictated by regulations, policies, and processes that focus 
on assuring that agencywide objectives are achieved. 

[8] For example, see discussion of a summary of historical results of 
such IG audits in Department of Veterans Affairs, Office of Inspector 
General, Combined Assessment Program Review of the Ralph H. Johnson VA 
Medical Center Charleston, South Carolina, Report No. 05-00048-84 
(Washington, D.C.: Feb. 14, 2005). In addition, our work at the General 
Services Administration has shown that pre-award audits there similarly 
result in lower prices. See GAO, Contract Management: Opportunities to 
Improve Pricing of GSA Multiple Award Schedules Contracts, GAO-05-229 
(Washington, D.C.: Feb. 11, 2005). 

[9] We found one instance where the IG and VHA do not agree on whether 
a recommendation should remain open or be closed, but we consider this 
disagreement to be outside the scope of our review because it does not 
address how VHA goes about awarding and administering service 
contracts. Specifically, in its report, Audit of VA Acquisition 
Practices for the National Vietnam Veterans Longitudinal Study, Rep. 
No. 04-02330-212 (Sept. 30, 2005), the IG identified a number of 
deficiencies concerning the award of a contract, which was subsequently 
terminated, for a legally mandated study. Although the IG recommended 
that VA use proper contracting procedures to expeditiously complete the 
study, VA officials have decided to attempt to satisfy the mandate 
through other means. In our view, the decision on how best to meet the 
mandate is a management issue, not an acquisition issue. 

[10] Department of Veterans Affairs Directive 1663, Health Care 
Resources Contracting--Buying, Title 38 U.S.C. 8153, August 10, 2006. 

[11] The IG Office of Health Inspections and the IG Office of 
Investigations plan to continue CAP reviews to identify specific 
facility deficiencies that need to be addressed. 

[12] Department of Veterans Affairs, Office of Inspector General, Audit 
of VA Disbursement Agreements for Senior Residents, Report No. 05- 
01234-25 (Washington, D.C.: Nov. 15, 2006). Department of Veterans 
Affairs, Office of Inspector General, Audit of VA Acquisitions for 
Other Government Agencies, Report No. 04-03178-139 (Washington, D.C.: 
May 5, 2006). 

[13] Department of Veterans Affairs, Office of Inspector General, Audit 
of Alleged Mismanagement of Government Funds at the VA Boston 
Healthcare System, Report No. 06-00931-139 (Washington, D.C.: May 31, 
2007). 

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