A Bronx VA hospital is under a federal investigation after the Department of Veterans Affairs discovered some questionable purchases by the facility that can’t seem to be explained. And this is one mystery the taxpayers want solved.
As of this Monday (June 15), the VA Office of Inspector General is investigating whether Bronx VA hospital employees have abused government-issued purchase cards, or “GPCS,” which authorize purchases under the micro-purchase threshold of $3000. It is not permissible for the government to split purchases in order to avoid exceeding this threshold.
According to a recent memorandum addressed to VA Secretary Robert McDonald by Jan Frye, deputy assistant secretary for the VA, the Bronx facility engaged in this illegal splitting. It spent over $50 million on prosthetic limbs in two years through purchases made at least 2,000 times. Each purchase totaled $2,999 — just one dollar bellow the VA’s $3,000 GPC limit.
According to the Washington Post, which seems to have had the scoop on this story, when Congress learned of this practice, it demanded answers. The VA did not, however, turn over any documentation to authenticate the purchases. Instead, it claimed they were destroyed during Hurricane Sandy.
The House Veterans Affairs Subcommittee on Oversight and Investigations didn’t buy this excuse. Led by Kathleen Rice, a New York Congresswoman, it called for an investigation during a series of hearings concerning spending practices of the VA.
“The damage caused by Superstorm Sandy was devastating and far-reaching, but the claim that all of these documents were destroyed strikes me as all too convenient and must be substantiated,” Rice said in a statement. “We need to know exactly what happened to the documents, how and why this money was spent without written contracts, and who is accountable.”
Bronx is not alone here. This case was one of several acquisition practices Frye described in his memo. According to the memorandum, the VA spends billions of dollars each year on medical supplies and services in violation of federal procurement laws. Frye’s memorandum lists not only VA facilities, but the names of VA officials.
In the months to come, expect other shakedowns like this one. Who’s next?
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This is not a new issue. I have 41 years of federal government procurement experience and can track the blatant non-compliance with procurement regulations back to the first Clinton Administration. Whoever said it’s easier to get forgiveness than permission did us all a great dis-service. Being proactive in enforcing compliance with procurement regulations got me labeled as not being a team player and cost me at least three promotions to GS-13. I can assure anyone reading this that compliance with federal procurement regulations and following competitive procedures has become a joke. Particularly in ignoring regulations to promote diversity. I’m all in favor of spreading procurement dollars around, however the processes and procedures deserve more that a wink and very weak efforts at compliance. The only real solution is to start suspending procurement authority for organizations found to be in blatant non-compliance and terminate employment of Contracting Officers who are in bed with their customers.
The worst part is that it seems like a such an easy problem to solve, yet it continues to remain an issue throughout the government procurement system.
As John mentioned this is not a new issue just another example of the results of a fairly simple process of buying made complex by many factors. Although not exclusively the VA has historically experienced tremendous and protracted difficulties complying with the Federnal regulatory processes for purchasing. There are many factors at play that perpetuate this environment within the VA and continue to do so year after year. Some of these factors are: a lack of accountability; the organizational structure and placement of the procurement functions within VA, at all levels; external as well as internal political influences; continuing to hire and train the procurement staff from within VA; monitoring and accountability weaknesses at all levels; misdirected motivations, etc. Until the root causes are truely identified, embraced and effectively dealt with we will continue to see substantial compliance and performance issues.