Legal Meets Practical

by Sarah Schauerte

Last week, the acting Secretary of Veterans Affairs, Sloan Gibson, told the Senate Veterans Affairs Committee that the VA needs $17.6 billion to fix its healthcare system. According to Gibson, the money would help the VA decrease appointment times and allow it to hire new doctors.

That’s the gist of the request. No permanent reforms proposed. No house cleaning of administrators who profited from making fake reports of prompt patient services. No vows to improve transparency.

While some members of the Senate committee were on board with the request – given the obvious evidence that more money is needed for these purposes – others weren’t impressed. For example, Senator Mike Johanns of Nebraska, questioned whether VA care would improve if it received additional funding.

“This sounds so similar to what we’ve heard over the years,” Johanns said, adding that the committee had routinely met previous VA requests for additional funding. “If you can’t clean up your act, then guess what? You lose out,” he continued. “I don’t think you need more billions and billions of dollars.”

Gibson said the VA would use the $17.6 billion to hire 10,000 new clinical staff members, including 1,500 doctors. It would allocate $6 billion for infrastructure improvements, including building eight new medical facilities and leasing 77 more around the country.

The money would come on top of funds included in a separate bipartisan reform bill that both houses of Congress passed in June. That legislation is in a conference committee to work out differences.

Obviously, additional funds to provide for improved medical services will positively impact veterans in the VA’s healthcare system. But the scary question is, shouldn’t the VA already know how much it needs in order to provide adequate services to its veterans? And now it’s saying that it needs another $17.6 billion to do the job right?

Another point is where the priorities should be. The focus should be on the funds and measures needed for a systemic reform of the VA. Without substantive change, Congress cannot expect the VA healthcare system or its bureaucracy to act any differently than it has in the past. It needs reform to promote accountability and transparency.

We’ll see where this leads us. The VA healthcare system can’t be fixed in a few weeks, or months, or probably even in a few years. But one thing’s for certain – to do so, it needs a surgery, not a Band-Aid.

Did you find this article informative? If so, sign up for Sarah Schauerte’s blog on veterans issues at: https://legalmeetspractical.com. Sarah Schauerte is a veterans lawyer and advocate whose practice focuses on veteran small business issues.

While it is generally small businesses that have to worry about subcontracting out work, a new rule will make this an issue for every contractor.

Section 802 of the National Defense Authorization Act (“NDAA”) for Fiscal Year 2014 provides additional requirements relative to the review and justification of pass-through contracts. Where an offeror for a contract informs the agency pursuant to FAR 52.215–22 of their intention to award subcontracts for more than 70 percent of the total cost of work to be performed under the contract, the contracting officer must: (1) consider the availability of alternative contract vehicles and the feasibility of contracting directly with a subcontractor or subcontractors that will perform the bulk of the work; (2) make a written determination that the contracting approach selected is in the best interest of the Government; and (3) document the basis for the determination. The proposed rule, FAR 15.404-1(h), is being created in order to implement these statutory requirements.

This rule doesn’t apply to FAR Part 19 acquisitions, or acquisitions under the Small Business Program. The interesting aspect of this is that it effectively deters contractors from teaming together where the prime contractor passes through much of a work to a prime contractor. This is likely done to eliminate the middle man – i.e., the prime contractor – and to therefore also eliminate the markup.

This might benefit the government customer (and the taxpayer), but it also potentially reduces the incentive for contractors to team together. Subcontractors performing the bulk of the work might like this teaming arrangement because they don’t want to  deal with the government customer directly (which involves considerable paperwork and liability). Or perhaps they don’t have the past performance to bid, or they have a good relationship with the prime contractor so they want to collaborate.

What do you think? If you want to comment on the proposed rule, you need to do so by September 9, 2014. Access its publication in the Federal Register here.

Did you find this article informative? If so, sign up for Sarah Schauerte’s weekly blog on veteran and small business issues at: https://legalmeetspractical.com.

by Sarah Schauerte

When it comes to protests involving timeliness, these are usually losing battles for the protestors. Late is late, goes the old adage, and unless the situation is entirely beyond the offeror’s control, like weather issues or government closure, protestors should save their time and attorney’s fees.

One exception, however, came into play in a recent Government Accountability Office (“GAO”) protest. There, a protest was sustained when an offeror timely responded to a FedBid “Bid Valuation” request for fuel quotations, but did not timely respond to the contracting officer’s concurrent shorter-deadline, telephonic request for confirmation. AeroSage, LLC, B-409627 (July 2, 2014).

AeroSage had submitted a quotation which prompted a “Bid Validation” request, which directed AeroSage to confirm, by 5:00 p.m. that day, that it could deliver the fuel by March 13, at 9:00 a.m. At 4:36 p.m., AeroSage replied affirmatively to the Validation request via email.

During the time after the FedBid Validation request was sent, but before the response was due, the contracting officer (“CO”) determined that it was appropriate to contact AeroSage, make an offer, and request acceptance prior to delivery. The CO made two telephone calls to AeroSage’s office, at 12:44 p.m. and at approximately 1:45 p.m. In the second call, the CO directed AeroSage to call back by 2:30 p.m., i.e., within 45 minutes, to confirm delivery and accept the offer. When AeroSage did not return his call, the CO deemed this “a rejection of the Government’s offer” and decided to award to the next lowest-priced, technically acceptable vendor.

The GAO held that the agency’s actions were  analogous to a decision to accelerate the closing time for final revised proposals on the proposal due date. This additional requirement for telephonic confirmation was not only unstated in the RFQ, but was inconsistent with the instructions set forth in FedBid’s previously-issued Bid Validation request.

In short, the GAO found that the agency’s actions violated a fundamental premise of government procurements: that offerors must be advised of the bases upon which their proposals will be evaluated. Citing H.J. Group Ventures, Inc., B-246139, Feb. 19, 1992, 92-1 CPD ¶ 203 at 4. Specifically, it was unreasonable for the CO to provide AeroSage approximately 45 minutes to respond to a voicemail while providing no notice that this might be required. AeroSpace had not only timely replied to the Bid Validation request, but there was nothing in the record to suggest that it would not deliver as promised. The GAO concluded by saying that it found that the CO had improperly imposed an additional unstated requirement.

AeroSage was awarded its costs and fees in the appeal. However, the work it had bid on had already been fully performed by the awardee. This means that for all intents and purposes, all AeroSage got out of this protest was a free piece of paper validating its position. This raises the question – is making a point worth the trouble of a protest?

Did you find this article informative? If so, sign up for Sarah Schauerte’s weekly legal blog on veteran and small business issues at: https://legalmeetspractical.com.

by Sarah Schauerte

*Update – In late July, the Senate unanimously approved Mr. McDonald’s nomination as the next VA secretary. He will replace acting Secretary, Mr. Sloan Gibson, who has occupied the position since Mr. Eric Shinseki’s resignation in mid-May. 

On Monday, President Barack Obama announced his nomination of former Procter & Gamble executive Robert McDonald as the next Secretary of the United States Department of Veterans Affairs (“VA”). This, of course, comes on the heels of former Secretary Eric Shinseki’s resignation last month, which followed high-profile scandals surrounding several VA medical centers.

While Shinseki initially expressed his intention to remain as Secretary, this changed after a report by the VA’s Office of Inspector General confirmed the public’s worst fears about veteran treatment and “fudging the numbers” at the healthcare center in Phoenix.

In tapping McDonald for the post, Obama is signaling his desire to install a VA chief with broad management experience. McDonald also has a military background, graduating near the top of his class at the U.S. Military Academy at West Point and serving as a captain in the Army, primarily in the 82nd Airborne Division.

McDonald resigned abruptly from Procter & Gamble in May 2013 amid pressure from investors concerned that he was not doing enough to boost the company’s performance. This isn’t the best way to depart, but we don’t know what this actually means. When his nomination is approved by the Senate, which must happen to solidify the appointment, I’m sure more information about his past with Procter & Gamble will become public.

Personally, I believe that someone with a strong business background is a smart pick for the new Secretary. The VA is in desperate need of someone skilled in process improvement, practical solutions, and who possesses business savvy. We need someone who makes improvements and changes with actual teeth. We don’t need more memorandums and reports.

One thing important to remember, however, is that McDonald is inheriting a broken system. The VA isn’t going to significantly improve, quickly, regardless of who Obama places in charge. I think most people know we can’t expect a fast fix, but this is worth mentioning. We’re appointing a Secretary, not a Superman.

Another issue is red tape. Even if McDonald has the capacity to effect change, what type of process must he go through to do so? The bureaucratic nature of the system might impede him.

Good luck to Mr. McDonald. He’s going to need it.

Did you find this article informative? If so, sign up for my weekly legal blog on veterans issues at: https://legalmeetspractical.com.

It’s been a few weeks since I’ve blogged, which is unusual for me. My apologies to my readers, but I believe I have legitimate excuses – spending one week visiting family in the St. Louis area, and another acting as a panelist at the National Veteran Small Business Coalition’s (“NVSBC”) annual conference in Reno, Nevada.

While I considered covering the recent Kingdomware district court decision, Hardy Stone and Steve Koprince did such a good job reporting on the subject that I decided to leave it to them. Here’s the spoiler: the veterans lost.

This week I’m going to shake things up a little and discuss scams. They’re still out there, and because scam artists are getting smarter, they’re even more of a threat. I want to single one out that almost worked.*

While in Reno, I was watching a movie while working on my computer. One of my clients emailed me with a question. “Sarah!” he said. “I thought you paid for our trademark application! I just wrote a check.”

Instantly warning bells went off. I had applied for several trademarks for this client, and part of the United States Patent and Trademark Office’s (“USPTO”) process is you pay for the application before you submit it. They don’t bill you later. After that, you’re done. No more fees.

I relayed this to the client, and he responded by sending me a picture of the bill he’d received.

Seriously now. Bravo. Gone are the days of “Nigerian princesses” sending us spam, asking us for measly sums in exchange for helping them transfer million of dollars. Whoever sent this piece of mail to my client – who is, by the way, very smart – was a pro.

The letter was from a company in Alexandria, Virginia. (The USPTO is in Alexandria). For just $385 (which is more expensive than the trademark application itself), it would register your trademark with the United States Customs and Border Protection and “monitor” improper uses of the trademark. The letter was carefully worded to not only look official, but to create the impression that it came from a government source. (In fact, the USPTO warns about this company on its website).

“Shred the check!” I told the client, and thanks to our quick conversation, the check went in the shredder instead of out with the mail. Shwew.

Another associate of mine almost fell victim to a company that was going to charge him $25.00 to register his domain name. The correspondence received looked like a real invoice, was only $25.00, and the domain was in fact going to expire soon. Someone had done their homework by not asking for enough to raise a red flag, but by researching almost-expired domains.

As small business owners, we need to be wary of tricks like these. Scammers are getting smarter, and it’s easy to get taken in because we’re too busy to stop and think about whether the mail we’ve received makes sense.

It’s your hard-earned money. Don’t give it to a scammer!

*Story told with the permission – and in fact, encouragement – of the client.

by Sarah Schauerte*

It’s official. The Secretary of the Department of Veterans Affairs (“VA”), Eric Shinseki, resigned today amidst the VA health care scandal. This followed a face-to-face meeting with President Obama about mounting evidence of widespread misconduct and mismanagement at the VA’s vast network of medical facilities.

Shinseki had said for weeks that he wanted to stay in his job to confront accusations that officials at the department’s hospitals had manipulated waiting lists to cover up long delays in scheduling appointments for thousands of veterans. In a recent testimony before Congress, Shinseki also discussed taking action to address the misconduct once a pending report on the wait times and scheduling practices at the Phoenix Health Care System by the VA’s Office of Inspector General (“VA OIG”) was received.

In a speech last Friday morning to the National Coalition for Homeless Veterans, Shinseki apologized and described his agency as having “a systemic, totally unacceptable lack of integrity.” He vowed to fix what he called a “breach of integrity” and said he had already initiated the firing of top managers at the VA medical center in Phoenix, where allegations of mismanagement first surfaced.

Then, however, came the interim report by the VA OIG (the “Report”).

The report notes that since 2005, the VA OIG has issued 18 reports that identified, at both the national and local levels, deficiencies in scheduling resulting in lengthy waiting times and the negative impact on patient care.

The full Report can be accessed here. It identified serious conditions at the Phoenix healthcare center under investigation, to include a gross understatement of the times patients waited for healthcare. As noted by the Report: “A direct consequence of not appropriately placing veterans on EWLs is that the Phoenix HCS leadership significantly understated the time new patients waited for their primary care appointment in their FY 2013 performance appraisal accomplishments, which is one of the factors considered for awards and salary increases.”

So what does that mean? It means that veterans who desperately needed health care were not receiving it. And because this was not recorded by those entrusted to manage these veterans’ health, they waited in suffering while leadership at Phoenix received bonuses and raises for their performance.

The VA OIG also found multiple scheduling instances that were not in compliance with national policy. These are likely the basis of the allegations of “secret wait lists.”

When it came to Shinseki, the Report was the straw that broke the camel’s back. It increased the pressure on him to step down, especially after some Senate Democrats broke with others in the party to demand his removal.

Mr. Walsh, the Montana senator, said that the report “confirms the worst of the allegations against the VA” and that “it’s time to put the partisanship aside and focus on what’s right for our veterans.”

So this is where we are. A report confirming our gravest concerns, a deposed Secretary, and full-time coverage by CNN.

When the dust settles, what will be done?

Access my prior blogs on the issues at the Phoenix and San Antonio health care centers. And if you found this article informative, please sign up for my legal blog on veterans issues at https://legalmeetspractical.com. Remember to click the link sent to your email to activate your subscription!

*Sarah Schauerte is an attorney and veterans advocate. Her practice is primarily dedicated to helping veteran-owned small businesses grow, as well as to promote awareness of issues affecting the well being of our nation’s veterans.

I was emailing back and forth with one of my veteran friends over the weekend, and he commented about “keeping in mind the true meaning of Memorial Day, kind of like the true meaning of Christmas.” How right he is, and how worth dedicating this week’s blog to the notion.

Everyone knows what Memorial Day is for – to remember the members of our armed forces who have died while serving our country. Because I lived in Washington, D.C. for the last five years, I was constantly aware of their sacrifice because the national monuments were close by. Now that I live in Georgia, I’m commemorating the day by attending an event hosted by the American Legion in Roswell, Georgia.

I’m keeping this blog short because you shouldn’t spend your time reading my words today. You should spend your time watching the video I am including, because it is powerful and will impress upon anyone who views it the meaning of Memorial Day.

This is a video of the changing of the guard at the Tomb of the Unknown Soldier in Arlington Cemetery. The Tomb is there to honor those who died without a grave marker, but with honor and our nation’s indebtedness. I used to visit the Tomb once a year, but now that I have moved, I’ll have to settle for this video and for memories.

The video doesn’t capture everything. If you visit D.C., I ask that you visit the Tomb to experience the changing of the guard firsthand. Walk the long, winding asphalt road to the Plaza, and see how the pansies dotting the ground bloom year-round. Read the words carved into the white marble side of the enormous tomb: “HERE RESTS IN/HONORED GLORY/AN AMERICAN/SOLDIER/KNOWN BUT TO GOD.” It’s an experience that stays with you.

I’ll leave the rest to you to watch, and to remember. And for those of you who serve or have served our country – thank you.

Did you find this article informative? If so, sign up for my weekly blog on veterans issues at: https://legalmeetspractical.com.

Last Thursday, the Secretary of the Department of Veterans Affairs (VA), Eric Shinseki, testified before the Senate Veterans Affairs Committee to address the recent scandals within the VA health care system.

This hearing was highly anticipated by the public. As CNN and other news stations have lamented, Shinseki is an elusive fellow to interview about – well, anything.

So how was the hearing? Did Shinseki convince us that he shouldn’t resign, as the American Legion and others have called for him to do? (This is the first time in 30 years that the American Legion has called for the VA Secretary to resign).

To be perfectly honest, prior to the hearing I had no solidified opinion regarding whether Shinseki should resign.

Obviously (as I have a working brain and conscience), I think it’s figuratively (and in some cases, literally) criminal how our veterans are being treated. At the same time, I acknowledge that someone at the absolute top like Shinseki isn’t responsible for everything. How is he supposed to prevent fudging the numbers at an individual health care center? Or a single Regional Office from having a particularly high error rate in resolving disability claims?

And while Shinseki might dodge CNN interviews or give general answers to burning questions, that might not be his choice.

Now I’m inclined to side with the American Legion. Even though Shinseki testified (absolutely stone-faced) that he is “mad as hell” about the VA’s shenanigans, I didn’t get the sense from his testimony that change will come with him at the helm. Instead, we’ll get reports and memos.

Here why the testimony convinced me of this:

First, on a basic level, Shinseki’s common answer to important questions was “I was not aware of that.” And at his level, he should have been aware. For example:

Johnny Isakson (R-Ga.) asked whether Shinseki was aware of an April 26, 2010, memo by William Schoenhard, former deputy undersecretary for health for operations and management, sent to all 21 VA service regions titled “Inappropriate Scheduling Practices.”

“Paragraph two begins, “It has come to my attention that in order to improve scores on assorted access measures, certain facilities have adopted the use of inappropriate scheduling practices, sometimes referred to as gaming strategies.”

A listing of inappropriate scheduling practices was attached to the memo, which noted that the extensive list was “not a full description of all current possibilities of inappropriate scheduling practices that need to be addressed.”

This memo was sent to all 21 VA service regions. By the deputy undersecretary. Four years ago. Confirming, in writing, inappropriate scheduling practices (ie, “fudging the numbers”). Now Mr. Secretary, I know you’re busy, but no one clued you in?

Shinseki also responded that he “didn’t know” or was “unaware” of other instances or facts with a significant impact on the VA and/or our veterans. As the Secretary, it’s his high-paid (with taxpayer dollars) job to know.

Second, Shinseki was evasive when it came to concrete plans for change. When asked whether there would be a change in the management team given systematic failure over a period of years, he gave a non-answer referencing the pending Inspector General (IG) report. He also dodged the question of how veterans can believe that positive change in the VA health care will occur. Nor did he give a straight answer on whether employees who engaged in wrongdoing at individual facilities would be disciplined or terminated (as opposed to being “reassigned” or given administrative leave).

In general, Shinseki’s testimony was soft, leaving no one to believe that change is going to come. Even though Shinseki has ordered an IG investigation, national review of the Veterans Health Administration, and has asked President Obama for assistance in reviewing the allegations, the issue is that this doesn’t do anything, at least not yet. As Senator Jerry Moran, one of the senators calling for Shinseki’s resignation, said after the testimony, “the last thing we need is another report.”

I couldn’t agree more. We don’t need another report with “recommendations.” We need some pink slips and some serious overhaul of a broken system.

But once we clean house, where do we begin? And if Shinseki is shown the door, what can we expect of his replacement? Even if Shinseki should resign, he’s only one piece of a very, very big problem.

Did you find this article informative? If so, sign up for my weekly blog on veterans issues at: https://legalmeetspractical.com.

Access the hearing before the Senate Veterans Committee here.

On Thursday, May 15th, the Senate Committee on Veterans’ Affairs will hold a hearing on “The State of VA Health Care” at 10:00 AM in Room 106 of the Dirksen Senate Office Building. Secretary of the Department of Veterans Affairs (VA), Eric Shinseki, will testify as to the state of VA health care and will inevitably be asked questions about the scandals in Phoenix and San Antonio.

Representatives from other veterans organizations will also testify, to include the American Legion, which earlier called for Shinseki’s resignation (the first time the American Legion has called for the resignation of a VA Secretary in thirty years). Also included on the witness panel are representatives from the Disabled American Veterans, Paralyzed Veterans of America, Iraq and Afghanistan Veterans of America, as well as the acting Inspector General of the VA.

As stated by the committee chairman, Senator Bernie Sanders (I-VT), “this committee will do everything it can to review the serious allegations regarding the Phoenix VA and other facilities, but we will not rush to judgment. As soon as the inspector general completes its independent investigation in Phoenix, we will hold a hearing or series of hearings regarding what happened there.”

The hearing will be aired live on C-SPAN. Tune in at 10:00 AM tomorrow, May 15, here. 

Did you find this article informative? If so, sign up for my weekly blog on veterans’ issues at:: https://legalmeetspractical.com. Remember to click on the link sent to your email to activate your subscription!

Last week, the news of veterans dying while waiting for health care at the VA’s Phoenix medical center outraged the nation. Now, a clerk at another medical center has come forward with a similar, equally horrifying story.

Brian Turner, a clerk at a VA medical center in San Antonio, was tasked with making sure that veterans received their health appointments in a timely fashion. According to Turner, he was told to “fudge the numbers” to meet the VA’s own national timeline goal of setting an appointment within 14 days of the veteran’s desired appointment date. He was told to schedule the appointments in “actual” time – months in advance, but not put the veteran in the system. This was called “zeroing out” that date – this way, there would be no record of the medical center not meeting its goals.

The VA’s Public Affairs Office has claimed that Turner’s claims were investigated from April 25th through April 28th and were found to be “not substantiated.” In an interview with CNN, however, Turner noted that the VA never even approached him to speak with him about his allegations. He was also admonished to stop emailing his concerns to VA personnel. CNN’s own requests for interviews with the VA on this subject have been ignored.

After the scandal in Phoenix hit the news waves, two of the largest veterans organizations called for the resignation of Eric Shinseki, the Secretary of the VA. One of these is the American Legion, which has not called for the resignation of a VA Secretary in thirty years. Two United States Senators also called for his resignation. While President Obama has publicly reinforced his belief in Shinseki’s abilities to lead the VA, CNN and members of Congress have attempted to interview Shinseki to no avail. In fact, they have been attempting to interview him on similar topics for over six months.

Where is Shinseki? Why has CNN been asking him for interviews for six months with no response? Why isn’t he coming forward to address these issues that are literally costing the lives of the veterans he is tasked to protect?

These aren’t rhetorical questions. Shinseki and these other senior officials at the VA need to be held accountable.

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