VHA flunks medical school contract management, IG says

The Veterans Health Administration’s management problems with contracts with affiliated medical institutions and providers resulted in missed opportunities for saving up to $174 million from 2006 to 2010 and cutting costs by up to 31 percent on those services, according to a new report from the VA’s Office of Inspector General.

Under the law, the VHA has authority to enter into sole-source contracts with affiliated academic institutions and teaching hospitals to help train professionals in VA facilities.

The VHA has had numerous difficulties in implementing requirements of VA Directive 1663 issued in 2005 covering such contracts, the July 21 IG’s report said.


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The problems include insufficient management resources, gaps in training, ongoing poor planning, problematic use of pricing data and continued concern about conflicts of interest.

For example, a VA employee worked part-time at a medical affiliate and signed off on and validated the procedures the medical affiliate performed under the contract. In another example, a VA employee, who also was a part-time employee of the affiliate, intended to participate in the negotiation of a tontract iwth the affiliate.

“These straightforward examples are troubling and indicate that VHA has not provided the necessary training concerning conflict of interest issues,” Mark Myers, director of health care resources for the IG's office, wrote.

The contracting problems in the report include lack of acquisition planning, contracting officers unable to fulfill their responsibilities, requirements and duties not clearly defined and interim contracting authority misused.

The report makes 11 recommendations for change. VHA managers generally agreed with the recommendations and said they have begun implementing them.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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