VA Acquisition Management:

Steps Needed to Ensure Healthcare Federal Supply Schedules Remain Useful

GAO-20-132: Published: Jan 9, 2020. Publicly Released: Feb 6, 2020.

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Shelby Stephan Oakley
(202) 512-4841
oakleys@gao.gov

 

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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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Additional Materials:

Contact:

Shelby Stephan Oakley
(202) 512-4841
oakleys@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

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.

What GAO Recommends

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.

For more information, contact Shelby S. Oakley at (202) 512-4841 or oakleys@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: VA concurred with this recommendation and is taking steps to implement it. In August 2020, VA reported that it has taken steps to better ensure the completeness of vendor FSS sales reporting, including by conducting more active monitoring of the sales data submitted by vendors. These steps are ongoing, but NAC has reported a decrease in the number of FSS contractors not reporting sales.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

  2. Status: Open

    Comments: VA concurred with this recommendation and is taking steps to implement it. In August 2020, VA reported that NAC has conducted additional outreach to veteran-owned small businesses regarding FSS participation, and plans to conduct analysis of these businesses' participation in FSS by the end of fiscal year 2020.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

  3. Status: Open

    Comments: 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. We have requested documentation of these activities, but VA has yet to provide it.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

  4. Status: Open

    Comments: VA concurred with this recommendation and NAC reported in August 2020 that it has taken steps to make existing guidance on the FSS program more accessible to FSS contracting staff. We have requested more documentation from VA to confirm that the guidance is comprehensive.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

  5. Status: Open

    Comments: VA concurred with this recommendation and NAC reported in August 2020 that it has implemented additional introductory training for new FSS contracting staff, as well as quarterly training events for all FSS contracting staff. We have requested additional documentation from VA on the content of the quarterly training.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

  6. Status: Open

    Comments: GSA concurred with this recommendation. In August 2020, GSA stated that it has met with VA and agreed to develop an interagency memorandum of understanding by December 2020.

    Recommendation: 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)

    Agency Affected: General Services Administration: Office of the Administrator

  7. Status: Open

    Comments: VA concurred with this recommendation. In August 2020, GSA stated that it has met with VA and agreed to develop an interagency memorandum of understanding by December 2020.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

  8. Status: Open

    Comments: GSA concurred with this recommendation. In August 2020, GSA stated that it is working to develop updated delegation of authority and will provide further details by December 2020.

    Recommendation: The Administrator of GSA should take steps to document its delegation of authority for the healthcare-related Federal Supply Schedules to VA. (Recommendation 8)

    Agency Affected: General Services Administration: Office of the Administrator

  9. Status: Open

    Comments: 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. We have requested more detail from NAC on the barriers they have identified and steps they are taking to address them so that we can assess whether they are comprehensive.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

  10. Status: Open

    Comments: VA concurred with this recommendation. In August 2020, VA reported that NAC has developed a checklist for assessing the completeness of submitted offers, and that new offers are currently processed in an average of two days. NAC is considering adoption of an automated offer intake system. We have requested additional details from NAC on the recent average offer processing time.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

  11. Status: Open

    Priority recommendation

    Comments: VA concurred with this recommendation. In August 2020, VA stated that it is analyzing duplication of contracting across the department as part of its Category Management efforts, and expects to complete an internal report on this issue in early 2021.

    Recommendation: 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)

    Agency Affected: Department of Veterans Affairs: Office of the Secretary

 

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