VA Vocational Rehabilitation and Employment:

Service Contract Management Is Improving, but Challenges Remain

GAO-07-568R: Published: Apr 23, 2007. Publicly Released: Apr 23, 2007.

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The Department of Veterans Affairs' (VA) Vocational Rehabilitation and Employment (VR&E) program provides services such as vocational counseling and job training to assist veterans with service-connected disabilities obtain and maintain suitable employment and achieve maximum independence in daily living. In fiscal year 2006, the VR&E program obligated about $702 million and served about 89,000 veterans. The Veterans Benefits Administration (VBA), which administers the VR&E program, provides some services to veterans through two types of contracts--national contracts and local contracts. In fiscal year 2003, VA adopted the National Acquisition Strategy (NAS) to award contracts at the national level to ensure that veterans have access to the same quality and types of VR&E services across regional offices. These national contracts, once awarded, are implemented by VA's regional offices. Services available under these national contracts include initial evaluations, case management, and employment placement assistance. In fiscal year 2006, VR&E spent about $15 million through national contracts. There are 165 national contracts currently active in fiscal year 2007. Regional offices also can negotiate and implement local contracts for services that are not provided through national contracts such as tutoring and computer skills evaluations. In fiscal year 2006, VR&E spent about $12 million through local contracts. VR&E contracting officers are responsible for negotiating the terms of local contracts. Contracting officer's technical representatives, often VR&E counselors themselves, assist in managing both national and local contracts. Recent studies of the VR&E program have raised concerns about its contracting practices. In March 2004, the VR&E Task Force recommended that VA enhance VR&E contracting practices by taking several actions, including revising the scope of national contracts and developing contracting training and hiring contracting specialists to improve the contracting expertise of VR&E staff. According to the VR&E Task Force, VR&E's capacity to manage its contracts could be further improved by enhancing the usefulness of its case management data system. For example, the VR&E Task Force recommended that VA improve its case management data system so that purchased contract services could be tracked by the counselor who orders the services or by the veteran that receives the services. In February 2005, the VA Inspector General recommended that existing national contracts be renegotiated to better reflect market rates for services because VA was at risk of paying excessive prices for VR&E services purchased through its current national contracts. The report also noted that VA should strengthen regional office oversight and management of contracts. To address Congressional interest in VR&E contract management, we conducted a study to determine how VA has improved VR&E contract management practices and identify challenges VA continues to face. Specifically, Congress asked us to answer the following questions: (1) What progress has VA made in implementing selected recommendations on contracting for VR&E services made by the VR&E Task Force and the VA Inspector General? (2) What are VA's key challenges in improving its management of VR&E service contracting?

VA reports progress in implementing contracting-related recommendations made by the VR&E Task Force and VA Inspector General. However, some key recommendations have not yet been implemented. Specifically, VA regional offices requested and obtained lower prices under existing national contracts. VA has taken steps to increase regional office VR&E staff contracting expertise. VA has taken steps to develop additional regional office internal control policies and procedures for contracting activities. VA's efforts to address issues with contracting data are on hold. VA has not yet awarded new national contracts. Key challenges remain to improving VA's management of VR&E service contracting. Specifically, we found that (1) regional offices are not fully applying VA's contracting guidance; (2) current training does not adequately prepare contracting officers to manage contracts; (3) regional offices report delays in communication with VA headquarters on contracting questions, but VA is taking actions to address these concerns; (4) VA's management of VR&E contracting is limited by inadequate reporting capabilities; and (5) inadequate internal controls over contracting data raise reliability concerns.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To address the key challenges we identified that VA faces in improving its management of VR&E contracting, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to conduct a management review to assess how regional offices are implementing VA's contracting guidance and take necessary actions to make needed improvements. For example, VA could clarify to VR&E employees how existing VR&E guidance on contract file maintenance applies to local contracts.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: According to VA, its Vocational Rehabilitation and Employment (VR&E) Service reviews contract management as part of its periodic site surveys of regional offices' VR&E operations. VA has assigned contract specialists to the field, each of whom is responsible for providing contracting oversight and support for two or more regional offices. Further, VA has adopted a governance plan for VR&E contracting, intended to ensure that all contract procurements are effectively and consistently implemented and monitored. According to VA, this plan is based on recommendations of a VR&E fiscal working group, as well as the results of site visits to VR&E field offices.

    Recommendation: To address the key challenges we identified that VA faces in improving its management of VR&E contracting, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to require regional offices to report on the efficacy of contracting training and take necessary actions to make needed improvements. For example, VA could develop VR&E-specific contracting training.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: VA stated that it uses feedback from contracting training participants, including regional VR&E officers and contract specialists, to determine the training's efficacy and identify further training needs. Also, VA reported that it solicited feedback from all regional offices on the training provided on its new National Acquisition Strategy Vocational Rehabilitation and Employment (VR&E) contracts. Further, VA suggested that the efficacy of contracting training can be evaluated during its site surveys of regional VR&E operations.

    Recommendation: To address the key challenges we identified that VA faces in improving its management of VR&E contracting, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to improve VA management of VR&E contracting by improving Corporate WINRS reporting capabilities and its internal controls over contracting data.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: VA reported that it implemented its Intranet Corporate WINRS (VR&E's case management data system) reports, with data on contracting activity by regional office, in June 2009. VA also reported that it improved Corporate WINRS' capacity to sort contract data, to help improve contract management and oversight. VA also reported steps taken to improve contract data accuracy. VA changed Corporate WINRS' case history screen to tie contract obligations and payments to the regional office that originated a contract, to allow offices to obtain accurate accountings of contract obligations and payments. Also, VA added an identifier for VR&E national contracts to improve its ability to accurately account for obligations under national vs. local contracts. Further, VA established a requirement that regional offices report annually whether contract obligations are proper and are charged to correct budget codes.

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