Contract Closeout Compliance Needs Improvement at Regional Procurement Offices Central and West

The Veterans Health Administration (VHA) has three regional procurement offices (RPOs) that acquire supplies and services to support the medical facilities within their regions (Central, East, and West). In FY 2020, the VA Office of Inspector General (OIG) published a report on contract closeout compliance at RPO East. Because of problems identified there, the OIG conducted this review to determine whether RPO Central and RPO West contracting officers adequately performed and documented contract closeout requirements. When contracting officers do not follow the necessary steps to close out contracts, they increase future financial and legal risk to the government and may prevent it from obtaining the maximum benefit of any unused funds. Therefore, to protect veterans and taxpayer dollars, contracting officers must maintain the necessary evidence to demonstrate contractor compliance with contract terms and conditions. The team reviewed a random sample of 55 RPO Central contracts and 40 RPO West contracts, each valued at over $500,000, that were closed between June 1 and December 31, 2020. Based on the team’s review, the OIG found that RPOs Central and West contracting officers did not perform required contract closeout duties. Reasons included unclear policies and systems, as well as ineffective oversight of the closeout process. Contracting officers also informed the team that a heavy workload and the prioritization of awarding contracts affected their ability to comply with contract administration requirements. The OIG recommended the executive directors for RPO Central and RPO West establish consistent quality assurance reviews, balance contracting officer workload, update guidance on the use of simplified acquisition procedures, consider additional strategies to ensure contract closeout compliance, and verify that the contract files for the 81 sampled contracts have complete closeout documentation.