Federal Reports

The VA Office of Inspector General (OIG) completed 32 preaward reviews of sole-source healthcare proposals in fiscal year 2021 and provided information that VA contracting officers could use to help negotiate fair and reasonable prices. The proposals typically come from VA affiliated institutions such as colleges and schools of medicine. The combined estimated contract value of the 32 proposals reviewed was $305 million. The OIG identified a total of $102.5 million in potential cost savings for 29 of those proposals. As of March 2022, VA contracting officers had awarded 30 proposals and had sustained at least $44 million in cost savings.OIG reviews of the individual contract proposals were not previously published because they contain clinical staff’s sensitive personal data. This report, however, summarizes the OIG’s prior findings and recommendations in three areas: costs underlying proposed hourly rates, offered per-procedure prices, and potential conflicts of interest. For 27 of the 29 proposals reviewed that contained hourly rates, the prices offered to the government were higher than the supported amounts and contracting officers were urged to obtain lower prices. Frequently occurring issues included unsupported provider salaries, administrative expenses, fringe benefits amounts, and malpractice insurance premiums. The four proposals with per-procedure pricing all offered prices higher than the properly calculated Medicare rates and so the OIG recommended contracting officers also obtain lower prices. For 22 of the 32 proposals, there were potential conflicts of interest for VA personnel. These personnel held faculty appointments at the affiliated institutions and potentially would also have responsibilities related to the affiliate’s services. In each instance, the OIG recommended the contracting officer request an opinion from VA’s Office of General Counsel on whether these individuals would have a financial interest in the proposal.

What We Looked AtThe Department of Transportation (DOT) leverages information technology (IT) to achieve its mission of a safe, efficient, accessible, and convenient transportation system. Historically, IT systems were decentralized DOT-wide, but that resulted in high costs and other inefficiencies and risks. Thus, in May 2017, the Office of the Chief Information Officer (OCIO) launched an IT shared services (ITSS) initiative to centralize IT decision making and transition to DOT-wide acquisition vehicles where possible. Given the high-dollar amounts associated with DOT’s IT acquisition spending—$3.5 billion in fiscal year 2021—and the ongoing ITSS transition, our objectives for this audit were to assess the Department’s processes for (1) awarding its IT shared services contracts and (2) reviewing contractor charges. What We FoundCounter to Federal procurement requirements, DOT’s contracting officers (CO) awarded multiple noncompetitive actions to ITSS contract vehicles without proper justifications, beyond contract term limits, and despite prolonged contractor performance issues. For example, DOT awarded a 1-year, no options, $950,000 ITSS vehicle noncompetitively, then extended it 16 times, increasing its period of performance to over 7 years and its value to $15.2 million. In addition, COs did not always award such actions in a timely manner due partially to a lack of guidance. As a result, we found 10 lapses in 5 ITSS contract vehicles with a total value of $582.1 million during which DOT continued to receive and pay for IT services. Further, while DOT’s ITSS award documentation complied with most key procurement requirements, there were a few notable exceptions. For example, officials could not locate most of the award documentation for an over 11-year, $525 million ITSS contract, raising questions about whether DOT obtained the best pricing. Finally, the OCIO’s practices for verifying ITSS contractor charges are not always reliable in part because it lacks adequate controls. Thus, the Department cannot give reasonable assurance that ITSS payments are proper, leaving them at risk for waste, fraud, and abuse. Our RecommendationsDOT concurred or partially concurred with six of our nine recommendations to improve its ITSS contract vehicles award and invoice review processes. DOT did not concur with the remaining three recommendations, which remain open and unresolved.

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