VA says ‘true independent’ oversight coming to major acquisitions after lawmaker probes

The Department of Veterans Affairs is laying the groundwork for greater oversight of its major acquisitions, following repeated probes from lawmakers.

The VA on Tuesday released a draft request for proposals (RFP) for independent verification and validation (IV&V) of its major acquisition programs.

VA Chief Acquisition Officer Michael Parrish told members of the House VA Committee on Thursday that the VA expects to initiate the IV&V contract for its major acquisitions by the end of the year.

“This will enable true independent and agnostic oversight, to validate and provide confidence that what we have asked the contractor to do was properly delivered, on time and on budget,” Parrish said.

The VA issued the draft RFP after top Democrats on the House VA Committee introduced the VA IT Modernization Improvement Act. The legislation would require VA’s chief acquisition officer to contract out an independent verification and validation of some of the VA’s biggest modernization efforts.

VA officials told the committee in April that they support the legislation, if Congress attaches funding to the bill.

VA’s procurement of goods and services grew from $20.2 billion in fiscal year 2012 to $56.2 billion in FY 2022 — a more than 177% increase.

Oversight Subcommittee Ranking Member Frank Mrvan (D-Ind.), in addition to leading the VA IT Modernization Improvement Act, also introduced a bill to ensure major VA acquisitions stay on time and on budget.

The VA Acquisition Review Board Act, if passed, would require the board to conduct meetings throughout major milestones in the acquisition process to ensure that all requirements are being met. The board would also hold meetings when an acquisition is not in compliance with its baseline cost, schedule or performance requirements.

The bill would provide greater oversight of the VA’s rollout of a new Oracle-Cerner Electronic Health Record, its Financial Management and Business Transformation, and supply chain modernization efforts.

“I’m happy to continue working with the VA and providing structure and solutions to ensure that the award in the management of large contracts ensures that we are making the best use of taxpayer funds and provide better health care and benefits to veterans,” Mrvan said.

The VA Acquisition Review Board Act passed through the Oversight and Investigations Subcommittee this week, and awaits a full committee markup.

VA officials told lawmakers the department supports the legislation, and are asking for funds to stand up the board next year.

VA Senior Procurement Executive Angela Billups said the department is requesting $25 million in the fiscal 2024 budget to stand up the acquisition review board.

VA’s acquisition management has been on the Government Accountability Office’s list of high-risk federal programs since 2019.

Billups, however, said GAO gave VA an action plan to address some of its areas of concern.

“What we’re doing now, we’re moving from a plan to some strategies and some action. But I can tell you, we do have some gaps, as it relates to resources to fully implement all of the things that we have planned to do,” she said.

Technology Modernization Subcommittee Chairman Matt Rosendale (R-Mont.) said VA is “increasingly reliant” on contractors that support nearly every function of the VA, and warned that the situation puts the department at risk of conflicts of interest.

“When contractors are virtually indistinguishable from government employees and they are privy to most information that passes through the agency, there is a lot of opportunity to exploit access to non-public information,” Rosendale said.

The VA spends over $3 billion a year on management consulting contracts, and about 40% of the department’s consulting spending goes to just 10 firms.

The Wall Street Journal reported in March McKinsey consulted for VA on internal management while advising its opioid manufacturer clients on how to sell more pain pills to the department.

VA Secretary Denis McDonough told committee members, in a May 31 letter, that the VA “has no occasions where a contracting officer identified a potential or actual organizational, personal or other conflict of interest in the solicitation or contract award for advisory and assistance services.”

Within the past 12 months, the Government Accountability Office investigated three major organizational conflicts of interest complaints, but did not substantiate any of those claims.

Parrish said one VA organizational conflict of interest complaint remains “under investigation” at GAO.

Committee members are also continuing to press for more information about the ethics waivers VA issued for its Assistant Secretary for IT and Chief Information Officer Kurt DelBene, and how he recuses himself from specific interactions with his former company, Microsoft.

DelBene was an executive vice president at Microsoft for eight years before coming to VA. DelBene joined the VA in January 2022.

Committee staff met with VA Assistant Secretary for IT Kurt DelBene on April 27. During that meeting, committee members learned that there is no formal process to document when DelBene has recused himself from Microsoft-related matters.

Chairman Mike Bost (R-Ill.) sent a May 10 letter asking for a summary of the VA’s plan to document these recusals, but VA never answered. The VA also didn’t respond to a follow-up letter on June 5.

Rosendale him VA’s lack of response to either letter “does not inspire confidence in me or this committee.”

“I would love to give you folks the benefit of the doubt. But right now, you have no way to proving why Mr. DelBene has ever recused himself,” Rosendale said.

Luwanda Jones, VA’s deputy chief information officer for strategic sourcing, said DelBene has met with Microsoft “absolutely zero” times in the past 18 months.

“When it comes to the assistant secretary and Microsoft, it is my responsibility to make sure that he does not meet with them, and I’m pretty adamant about that,” Jones said.

DelBene told reporters in June that his goal is always to triage a vendor request and make sure it gets to the right person in OIT.

“I can’t meet with everybody, but I want to make sure we get everything triaged to make sure that that goes to the right place,” he said. “So I understand where that sentiment comes from, but I do think we are pretty deliberate about how we triage the incoming queries and try to make sure it’s fair in that regard.”

Jones oversees VA’s IT Vendor Management Office, which is responsible for contractors who are either doing business with the VA or want to do business with the department.

“What we do is we bring them in, and we talk about their capabilities from a market research perspective. One of the things we say upfront and early in any discussion is, one, we do not talk about any ongoing solicitation. And two, I cannot and will not guarantee you any contract, because it has to go through the procurement process,” she said.

GAO found in a recent report that 14 out of 26 IT contract awards in fiscal 2021 didn’t have the VA CIO’s approval — and that in 13 of those cases, the contract awards were managed my offices that don’t specialize in IT.

Jones said the VA CIO is responsible for reviewing all IT acquisitions.

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