In a 35-page memorandum addressed to VA Secretary, Robert McDonald, the VA’s senior official for procurement, Jan Frye, accuses other agency leaders of “gross mismanagement” and making a “mockery” of federal acquisition laws that require competitive bidding and proper contracts.
The result: the wasting of at least $6 billion a year in the federal contract arena. Note that this is $6 billion a year, not $6 billion, period.
“Doors are swung wide open for fraud, waste and abuse,” Frye writes in the March memo, which was obtained by D.C.’s The Washington Post. He adds, “I can state without reservation that VA has and continues to waste millions of dollars by paying excessive prices for goods and services due to breaches of Federal laws.”
In the memorandum, Frye describes in detail a series of practices that he says run afoul of federal rules, including the widespread use of government purchase cards, which are usually meant as a convenience for minor purchases of up to $3,000, to buy billions of dollars worth of medical supplies without contracts. In one example, he says that up to $1.2 billion in prosthetics were bought using purchase cards without contracts during an 18-month period that ended in 2014.
Frye also explains how VA has failed to engage in competitive bidding or sign contracts with outside hospital and health-care providers that offer medical care for veterans that the agency cannot provide, such as specialized tests and surgeries and other procedures. Frye says the VA has paid at least $5 billion in such fees, in violation of federal rules that the agency’s own general counsel has said since 2009 must be followed.
Frye alleges further violations in the agency’s purchase of billions of dollars worth of prosthetics and in the acquisition of a wide range of daily medical and surgical supplies. He says many products are bought without the competitive bidding and contracts essential to ensure quality care, effective use of tight dollars and proper government oversight.
After the memorandum was leaked to the press (which raises an interesting question – who leaked it?), members of the House Veterans’ Committee held a two-hour hearing to address the issues it raised. This is the first of three hearings scheduled for the Spring, during which the Committee Chair, Mr. Jeff Miller, remarked, “To let this continue and not be furious about it defies anybody’s rational thinking.”
Following the hearing, Secretary McDonald issued a response to the memorandum. Frye says this is the first time the VA has responded to the memorandum, which means that the VA did not acknowledge it until public release and public shaming.
Secretary McDonald said he has asked the inspector general’s office to review the letter. “Any findings of wrongdoing or evidence of harm to Veterans” will be referred to the Justice Department, he wrote.
Which, of course, means that some VA folk will be “redistributed.” After an investigation. And a memorandum with “recommendation.”
Good to know the situation’s being handled.
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This just goes to prove that the VA needs better oversight, something with teeth! Gone should be the days of Inspectors General begging for access and results. These IG people should have the full backing of the Justice Department to do their job, safeguard the public trust and shepherd the judicious use of our tax dollars. And, wonder of wonders, all of this would mean MORE and BETTER healthcare for veterans because the system would be more efficient.
Sara, if Jan Frye is the head of VA Procurement, why doesn’t he stop the process? Stop payment on unauthorized purchases or purchases made without his approval? Why doesn’t he remove acquisition personnel who engage in improper sole source awards? Why doesn’t he inform vendors that they will not be paid unless and until a proper acquisition instrument is executed?? The process will be difficult and not quick, but when vendors don’t get paid, amazing results can be obtained.
Sarah, you are dead on point! I thought it was just me. So, OGC Counsels SES, Secretary forwards to OIG who in turn reports back to OGC with findings? How’s that supposed to work again?
Jan Frye needs to hold his acquisition personnel accountable and remove the whole lot of them. Start off fresh, including removing himself! Oh, and btw implement some accountability to SBA. That would be a start!
Sadly, I don’t believe that “accountability” and the “Federal Government” ever go together. I agree though, it is definitely a circular firing squad of incompetence.