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VA Acquisition Management: Steps Needed to Ensure Healthcare Federal Supply Schedules Remain Useful

GAO-20-132 Published: Jan 09, 2020. Publicly Released: Feb 06, 2020.
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Fast Facts

To meet veterans’ needs, VA spends billions each year through the Federal Supply Schedules program—a simplified way to buy goods and services at volume pricing. The General Services Administration delegates management of part of this program to VA, the largest federal purchaser of medical supplies and services.

However, VA is not managing the program efficiently, with delays in awarding contracts, a lack of training for contracting staff, and limited visibility into users’ needs. Further, VA has not assessed how overlap with another procurement program affects the program’s goals.

We made 11 recommendations to address these issues and others.

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Highlights

What GAO Found

Over the past 5 years, Department of Veterans Affairs (VA) medical spending increased, but spending on its eight non-pharmaceutical Federal Supply Schedules (FSS) was flat. GAO found the vendor-submitted sales reports to be sufficiently reliable for describing these trends. However, GAO found that VA's National Acquisition Center (NAC)—the VA-wide contracting organization responsible for FSS—lacks controls to ensure the completeness of vendor sales data, which is used to calculate fees that finance the program.

The FSS program faces numerous challenges. For instance, NAC FSS guidance and training are not comprehensive, posing a risk of inefficiency and uneven application of requirements by contracting staff. Limited collaboration between FSS leadership at both NAC and the General Services Administration (GSA) also resulted in missed opportunities to share tools and practices. A 3-year FSS leadership gap further exacerbated challenges; these positions are now filled.

NAC also failed to meet its 180-day timeliness goal for 75 percent of the non-pharmaceutical FSS contracts it awarded from fiscal years 2014 through 2018 (see figure), though NAC met its goal for contract modifications 80 percent of the time.

Timeliness of Awarded Non-Pharmaceutical FSS Contracts for Fiscal Years 2014-2018

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By assessing timeliness goals and identifying barriers to achieving them, NAC leadership can take steps to better enable its contracting workforce to provide an efficient and reliable means to obtain needed goods and services through FSS.

Moreover, VA's procurement leaders have not assessed, and communicated to program managers, whether the duplication between FSS and the Medical Surgical Prime Vendor-Next Generation (MSPV-NG) program is a necessary and effective use of resources. These two programs feature many of the same items, and different contracting staff manage different contracts for the provision of the same or similar medical supplies for VA medical centers. Without assessing duplication between these two programs, VA is at risk of inefficient use of its contracting workforce, and may be unable to fully leverage its buying power.

Why GAO Did This Study

Through the FSS program, VA manages nine healthcare-related schedules—groups of contracts used to order medical supplies and services—under authority delegated by GSA. VA's FSS program management, including the speed with which it adds new contracts, affects VA medical centers' ability to use it to easily obtain goods and services. Further, recent changes in VA's medical procurement have also raised questions about the future role of the program.

GAO was asked to examine VA's management and use of its FSS program. This report assesses (1) what is known about VA use of its FSS program for fiscal years 2014-2018; (2) program management challenges faced by NAC; (3) the extent to which NAC awarded FSS contracts to vendors in a timely manner from fiscal years 2014-2018; and (4) the extent to which the FSS and MSPV-NG programs provide overlapping or duplicative offerings.

GAO reviewed eight VA schedules, excluding pharmaceutical due to the use of a prime vendor, among other things. GAO also analyzed three of these schedules representing about two-thirds of VA's FSS contracts; analyzed policies, guidance, and processes; and interviewed senior VA procurement, contracting, and supply chain logistics staff at NAC and two medical centers.

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Recommendations

GAO is making 11 recommendations: nine to VA and two to GSA; including that VA provide comprehensive guidance and FSS-specific training, improve NAC and GSA collaboration, evaluate timeliness goals and barriers, and assess FSS and MSPV-NG program duplication. VA and GSA agreed with GAO's recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of the Secretary for VA The Secretary of Veterans Affairs should ensure that the Associate Executive Director of VA's NAC puts controls in place to better ensure the completeness of vendor FSS sales reporting. (Recommendation 1)
Closed – Implemented
VA concurred with this recommendation. In August 2020, VA started taking steps to better ensure the completeness of vendor FSS sales reporting, including by conducting more active monitoring of the sales data submitted by vendors. VA has also implemented a quarterly sales reporting reminder/notice process that provides a series of reminders to all FSS vendors that sales reporting is due, as well as a series of notices when vendors miss the reporting deadline. In August 2021, VA reported that these reminders/notices have significantly reduced the number of vendors missing required sales reporting for the first quarter fiscal year (FY) 2020 through the first quarter FY 2021.
Office of the Secretary for VA The Secretary of Veterans Affairs should ensure that the Associate Executive Director of VA's NAC assesses data on the participation of and items and services offered by veteran-owned small businesses in NAC's FSS program, in order to determine whether their program is meeting the needs of VHA contracting officers who use it given the Veterans First requirements they must meet. (Recommendation 2)
Closed – Implemented
VA concurred with this recommendation. In August 2020, VA reported that NAC has conducted additional outreach to veteran-owned small businesses regarding FSS participation. In July 2021, VA provided us with a report that identifies 209 Veteran-owned and Service-disabled Veteran-owned small businesses that have been awarded contracts through the NAC's FSS program. Additionally, in March 2022, VA conducted an analysis that found 201 of 358 categories of supplies and services offered through VA FSS have two or more veteran-owned small businesses represented. These analyses provide VA with better information to determine the extent to which the FSS program is meeting the needs of VHA contracting officers.
Office of the Secretary for VA The Secretary of Veterans Affairs should ensure that the Associate Executive Director of VA's NAC directs the FSS Director to develop a mechanism to consistently obtain and analyze VHA user feedback on the FSS program. (Recommendation 3)
Closed – Implemented
VA concurred with this recommendation and has taken several actions to more consistently obtain VHA user feedback on the FSS program, including holding meetings with each VHA regional contracting office and participating in VHA integrated project teams and other recurring meetings. In August 2020. VA implemented several mechanisms to obtain and analyze VHA's user feedback. This includes enhancing surveys and online feedback tools; establishing a dedicated email box for feedback; and instituting regular engagements with VHA. VA provided us with communications documenting the involvement of NAC FSS and VHA staff in the integrated product team for national lab contracts, as well as examples of collaboration in updating FSS offerings to assist VHA pandemic response.
Office of the Secretary for VA The Secretary of Veterans Affairs should ensure that the Associate Executive Director of VA's NAC provides FSS contracting staff with comprehensive FSS guidance. (Recommendation 4)
Closed – Implemented
VA concurred with this recommendation. In August 2020, NAC reported that it had taken steps to make existing guidance on the FSS program more accessible to FSS contracting staff, and subsequently provided documentation in December 2020. VA developed FSS course materials for a new internal NAC FSS training program, which includes courses covering various elements of the FSS contract award and administration process. In addition to virtual course offerings, the materials are available as a reference for FSS contracting staff through an internal portal. VA offered these courses throughout 2021, with the most recent course taking place in May 2021.
Office of the Secretary for VA The Secretary of Veterans Affairs should ensure that the Associate Executive Director of VA's NAC develops an FSS-specific training program to include essential skills and processes to meet ongoing training needs for new and existing contracting staff. (Recommendation 5)
Closed – Implemented
VA concurred with this recommendation. In August 2020, NAC reported that it had taken steps to make existing guidance on the FSS program more accessible to FSS contracting staff, and subsequently provided documentation in December 2020. VA developed FSS course materials for a new internal NAC FSS training program, which includes courses covering various elements of the FSS contract award and administration process. In addition to virtual course offerings, the materials are available as a reference for FSS contracting staff through an internal portal. VA offered these courses throughout 2021, with the most recent course taking place in May 2021.
GSA Office of the Administrator The Administrator of GSA should work with the Secretary of VA to develop a memorandum of understanding outlining the roles and responsibilities of GSA and NAC for collaborating under GSA's delegation of authority to VA for the healthcare-related Federal Supply Schedules, including the processes through which the two organizations will coordinate and share useful tools and practices. (Recommendation 6)
Closed – Implemented
GSA concurred with this recommendation. In January 2022, GSA issued a memorandum of understanding outlining the roles and responsibilities for GSA and NAC for collaborating under GSA's delegation of authority.
Office of the Secretary for VA The Secretary of Veterans Affairs should work with the Administrator of GSA to develop a memorandum of understanding outlining the roles and responsibilities of GSA and NAC in collaborating under GSA's delegation of authority to VA for the healthcare-related Federal Supply Schedules, including the processes through which the two organizations will coordinate and share useful tools and practices. (Recommendation 7)
Closed – Implemented
VA concurred with this recommendation. In January 2022, GSA and VA issued a memorandum of understanding outlining the roles and responsibilities for GSA and VA's NAC in collaborating to manage the VA FSS program.
GSA Office of the Administrator The Administrator of GSA should take steps to document its delegation of authority for the healthcare-related Federal Supply Schedules to VA. (Recommendation 8)
Closed – Implemented
GSA concurred with this recommendation. In January 2022, GSA issued a delegation of authority memorandum that addressed this recommendation.
Office of the Secretary for VA The Secretary of Veterans Affairs should ensure that the Associate Executive Director of VA's NAC assesses the appropriateness of NAC's current timeliness goals for FSS contract awards and takes steps to comprehensively identify and address barriers to achieving them. (Recommendation 9)
Closed – Implemented
VA concurred with this recommendation. In August 2020, VA reported that NAC has confirmed that existing timeliness goals are appropriate, and that NAC officials meet on a quarterly basis to discuss barriers to meeting these goals. In March 2021, VA identified barriers to timely FSS contract awards identified by NAC, as well as steps taken to address those barriers, such as revising process steps identified as bottlenecks, and hiring additional contract specialists. NAC provided data showing that these efforts have resulted in better timeliness for all actions completed within the procurement action lead time (PALT) goal, going from a low of 73% of actions within the PALT goal in FY 2017 to 89% in FY 2020, while also completing a higher number of actions.
Office of the Secretary for VA The Secretary of Veterans Affairs should ensure that the Associate Executive Director of VA's National Acquisition Center takes measures to ensure greater efficiency in the offer-intake process, such as providing additional guidance for vendors or by adopting a system that includes checks for completeness of required vendor documentation. (Recommendation 10)
Closed – Implemented
VA concurred with this recommendation. In August 2020, VA reported that NAC has developed a checklist for its contracting officers to assess the completeness of submitted offers. In December 2020, VA provided data showing the average elapsed time between submission of an offer and assignment to a member of the contracting staff was less than three days in fiscal year 2020. NAC is also considering adoption of an automated offer intake system.
Office of the Secretary for VA
Priority Rec.
The Secretary of Veterans Affairs should take steps to assess duplication between VA's FSS and MSPV programs, to determine if this duplication is necessary or if efficiencies can be gained. (Recommendation 11)
Closed – Implemented
VA concurred with this recommendation. In September 2021, VA reported that the Category Management Program Office completed its analysis to identify duplication between VA's FSS and MSPV programs. VA compared product categories for each program to determine the extent of the duplication. The analysis found that 26% of the items from the MSPV program were also offered by the FSS program. However, VA stated that there are specific goals this duplication serves, including VA's requirement to establish a preference for veteran owned businesses, and VA has determined that the duplication is necessary.

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Internal controlsContract awardHealth care centersGovernment procurementVeterans affairsVeterans medical centersSmall businessVeteransProgram managementAcquisition managementContracting officersMedical suppliesHealth care standards