Costs jumped on VA's Wi-Fi contract, IG says

Contracting costs jumped 77 percent on a contract to install Wi-Fi infrastructure at 236 Veterans Affairs Department facilities, in part because the VA rushed the procurement, according to a new report from the department’s Office of Inspector General.

The VA awarded the five-year contract to Catapult Technology Ltd. for $91.4 million in October 2008, but current costs are projected at $161.5 million, according to the report by Mark Myers, director of the IG's Healthcare Resources Division Office of Contract Review.

The VA terminated the contract due to invoicing and pricing problems in October 2010 after installation was completed at 45 sites.

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“We determined that the time frames established to plan, solicit and award a contract were unreasonable,” Myers wrote. “Our review determined that because of the rush to award, VA did not establish firm requirements and issued a statement of objectives that lacked the detail needed for vendors to submit reasonable firm-fixed-price proposals to VA. The lack of detail has caused contract costs to escalate under the contract as well as significant delay of installation of Wi-Fi nationwide.”

The IG report dated March 31 made seven recommendations to the VA’s deputy assistant secretary at the Office of Acquisitions and Logistics, along with the assistant secretary for information and technology.

In a response, the acquisitions and logistics deputy assistant secretary said the entity that awarded the contract was not part of the acquisitions and logistics office at the time of the award.

The VA deputy assistant secretary agreed with four findings and disagreed with two of the findings, in one case asserting that the finding was moot because the contract has been terminated.

Also, the VA deputy assistant secretary agreed with six of the seven recommendations.