Better Management and Price Negotiation Will Improve the VA Multiple Award Schedule Program

NSIAD-83-33: Published: Sep 20, 1983. Publicly Released: Sep 20, 1983.

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GAO reviewed the Veterans Administration's (VA) procurement of drugs and pharmaceuticals, medical equipment, and subsistence products through the multiple award schedule (MAS) program, under which VA and other agencies procure certain supplies directly from vendors at a negotiated price.

GAO found that VA may not be obtaining the lowest prices possible under the MAS program because: (1) prices offered by vendors are not fully analyzed; (2) inadequate and unreliable vendor-submitted data are used for negotiations; and (3) offers are frequently accepted without counteroffers or negotiations. Management of the MAS program is also hampered by the large volume of products and contracts. In addition, GAO found that the format of the drug and pharmaceutical schedules does not provide customers with sufficient information to make buying decisions.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Costs, benefits, and the utility value of the combined schedule are all in question. VA has decided that the costs of the combined schedule exceed the benefits.

    Recommendation: The Administrator of Veterans Affairs should direct the Assistant Deputy Administrator for Procurement and Supply to develop and maintain a combined generic and brand name schedule with unit costs for drug and pharmaceutical products.

    Agency Affected: Veterans Administration

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator of Veterans Affairs should direct the VA Marketing Center to: (1) identify MAS products that can be procured competitively; (2) eliminate product groups that fall below established sales volume criteria; and (3) establish a negotiation objective that prevents awarding contracts that will not be cost effective.

    Agency Affected: Veterans Administration

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator of Veterans Affairs should direct the VA Marketing Center to: (1) obtain specific product discount information from vendors who now provide only the range of discounts given to their most favored customers; (2) perform required price analyses utilizing all available information; (3) establish specific price or discount negotiation objectives; and (4) negotiate vendor offers, even though most favored customer status is the initial offer, when price analyses indicate that VA should obtain a lower price.

    Agency Affected: Veterans Administration

 

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