Contracting officers in the Department of Veterans Affairs routinely altered dates on documents to ensure favorable ratings when actually they were behind schedule, according to a non-public audit obtained by the Washington Examiner.
The move appears similar to what occurred with patient appointment times and case work, when VA employees recorded false dates to make it seem like patients weren’t being forced to wait as long for medical care or benefits. Many of them died waiting for care.
The audit’s conclusions are also important because all of VA’s major construction projects are currently far behind schedule and hundreds of millions of dollars over budget.
“Contract specialists can (and apparently do) change the projected award date to accommodate delays and ensure a Green rating,” according to an “acquisition assessment” for VA’s eastern region by the Jefferson Consulting Group. The Washington, D.C.-based firm analyzes the performance of federal agencies and was hired by VA’s Service Area East Office to review its operations in 2011 and then again in 2013. It focused on its Office of Acquisition, Logistics and Construction Risk Management.
Officials with VA told the Jefferson auditors that the “Procurement Action Leadtime (PALT)” metric, which tracks how long it takes to award a contract, is “subject to manipulation” and “of questionable value.”
VA offices came out with implausibly high ratings, even though the reality was one of bureaucratic delays and dysfunction.
“Seven of the eight SAO East VISNs, as well as all the VISNs in SAO Central and West, received a Green rating on PALT. In two cases, PALT standards were met 100% of the time,” the audit says. VISN refers to individual sections and stands for Veterans Integrated Service Network.
Contracting delays can cost taxpayers substantial amounts of money because the “requirement is often urgently needed at the time the requisition is submitted and contracting staff must turn to less competitive or non-competitive strategies to address the need.”
Yet “[d]espite recommendations in the previous assessment, little has been done to foster early involvement of the contract specialists” to avoid delays.
Similarly, the 2011 review found that “there is little or no formal annual acquisition planning.” It recommended that VA “establish an annual acquisition planning process,” which VA said it did, but which Jefferson said in the 2013 review that it “does not agree” was accomplished.
Auditors said the sheer size of the VA makes it difficult to manage. In 2012, the East office alone performed 140,000 contract actions totaling $4 billion.
Many employees told auditors that top managers were aloof and more concerned about on-paper metrics than with learning how things were working on the ground.
“We have not even met the current director of SAO East, much less learn about the vision,” one said.
“SAO East is very silent and un-engaged. They conduct reviews and perform audits, but that’s it,” another said.
A personnel performance review system, according to the report, “has become more of a paper exercise than a tool.”
And an in-depth review of a sample of contract files indicated that problems were the norm, not the exception.
“Despite the expressed commitment to VA’s Integrated Oversight Process, the Risk Management and Compliance Service file review… indicates significant non-compliance,” the audit said.
Sixty-five percent of procurement requests were flawed, 58 percent of justifications for not using competitive bidding were missing documentation, and 72 percent of determinations of “fair and reasonable price” were problematic.
VA’s construction program, which is part of the procurement office, is under scrutiny as last month, construction halted on a Denver-area hospital after a builder refused to perform any more work, saying VA was in breach of its contract and that the company had incurred $100 million in losses — the latest of four new hospitals to be far over budget and behind schedule, according to the Government Accountability Office.
On Monday, VA said in a statement: “The situation in Denver is unacceptable to Veterans, taxpayers and Department leadership … Our obligation is to ensure VA doesn’t allow such an outcome to occur again by learning all we can from past mistakes and put in place corrective actions to improve future performance.”
But the audit is replete with instances in which VA has not acted swiftly to correct other problems even after they have been identified.
“The Assessment Team does not consider the above responses to be effective or timely … The recommendations were made over 18 months ago. Whatever the components of the plan that was developed, it is clear that they have not been implemented,” auditors wrote of a plan to increase communication.
The audit also shows that the Denver disaster is not out of the ordinary. Auditors found a list of 16 purchase orders worth nearly $40 million with a handwritten note on the bottom saying that “All contracts above were not monitored and work has not started and contracts have expired.”
“A veteran-owned small business concern claimed they were on the brink of going out of business due to the government failure to pay for work performed,” the audit added. Staff were “inundated” with such cases and “new issues and problems are being uncovered daily,” VA staff told auditors.
VA officials at DC headquarters have “clearly failed to perform this acquisition-related responsibilities,” auditors wrote.
The consulting firm also gave a failing “red” rating in the category of “effectively managing the acquisition process.” It gave the same rating for “commitment from leadership,” saying “efforts to establish fully effective internal control review processes are lacking.”
That means it has actually gotten worse since auditors identified the same problems in 2011, when they gave it a “yellow” rating in that category.
