The future of the healthcare federal supply schedules

In January, GAO released a report examining the current state of the non-pharmaceutical Federal Supply Schedules, and making 11 recommendations.

This column was originally published on Roger Waldron’s blog at The Coalition for Government Procurement and was republished here with permission from the author.

In January of this year, the Government Accountability Office released a report, “VA Acquisition Management: Steps Needed to Ensure Healthcare Federal Supply Schedules Remain Useful (GAO-20-132).”

The record examines the current state of the non-pharmaceutical Federal Supply Schedules and provides 11 recommendations: Nine to the Department of Veterans Affairs and two to the General Services Administration.  The Coalition for Government Procurement, among others, provided input to the GAO for the report.

The report is a timely and thoughtful assessment of the current program, and provides a roadmap for the VA and GSA to address the strategic role and contracting operations of the VA Federal Supply Schedules program in supporting veterans healthcare.

Pursuant to a delegation from GSA, VA manages nine healthcare-related Federal Supply Schedules (VA FSS) that provide the VA and other authorized users with a schedule of medical products and services. The VA FSS include, among other items, medical surgical equipment, pharmaceuticals, patient mobility devices, and medical laboratory testing and analysis services. The VA FSS accounts for approximately $15.4 billion in annual purchases, with the pharmaceutical schedule accounting for about $12.6 billion and the remaining eight schedules accounting for about $2.8 billion. Sales under the eight non-pharmaceutical schedules have been relatively flat over the last four years.  The GAO report covers the eight non-pharmaceutical schedules.

The GAO identified a series of challenges facing the VA FSS.  Among them were a lack of collaboration between the VA and GSA, limited guidance and training for contracting staff and possible duplication between the VA FSS and the VA’s Medical Surgical Prime Vendor program.  These challenges have led to increased processing times for contract awards and certain modifications, increased administrative costs for the VA and industry, and reduced access to the latest medical technologies from the commercial market.

GAO’s 11 recommendations to the VA and GSA fall into four general categories:

  1. The VA should provide comprehensive FSS guidance and training to the FSS contracting staff
  2. The VA and GSA should improve collaboration, including potential use of GSA’s procurement tools to support the VA FSS
  3. The VA should evaluate timeliness goals and barriers to achieving them in the contracting process
  4. The VA should assess FSS and MSPV-NG duplication to address resource utilization and leverage its buying power

The Coalition’s “VA Multiple Award Schedule White Paper” sets forth 23 recommendations to enhance the effectiveness and efficiency of the VA FSS.  These recommendations are designed to make the VA FSS pricing policy:

  • Recognize commercial practices whenever possible;
  • Be consistent with GSA FSS policy;
  • Result in more streamlined evaluation processes, and
  • Reduce the cost of contracting for both government and industry.

Chief among these recommendations is alignment with GSA policy.  For example, the white paper makes specific recommendations to align the VA’s price negotiations strategy with GSA’s approach.  The white paper also addresses the potential use of GSA’s e-Offer and e-Mod systems to streamline the procurement process.  Along these lines, the white paper makes recommendations regarding the VA FSS audit process to improve efficiency and transparency. Interestingly, GSA and the VA have fundamentally different approaches to contract audit support for their respective FSS programs. The recommendations in the white paper better align with GSA’s approach. In sum, the white paper provides sound recommendations that are, in fact, responsive to the issues raised by GAO in its report.

Significantly, the GAO cited a three-year FSS leadership gap that exacerbated the challenges facing the program. GAO also noted that all the management positions are now filled. Timing is everything.  With the FSS management positions filled, the GAO report recommendations provide a roadmap to address the long-standing contracting challenges facing the VA FSS. The Coalition’s white paper identifies specific action items along that roadmap that will improve the efficiency and effectiveness of the program. The Coalition looks forward to working with the VA FSS management team towards the common goal of a more efficient, effective FSS program that meets veterans’ healthcare needs.

There are also strategic challenges and opportunities associated with the overlap that GAO identified between the VA FSS and the MSPV-NG programs. This topic and the VA’s logistics reform efforts will be addressed in upcoming blogs.

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