Acquisition Failures at VA Lead to Congressional Calls for Enhanced Oversight

Several leading Republicans on the House Veterans’ Affairs Committee expressed strong reservations about the Veterans Affairs Department’s continued pursuit of major acquisitions over concerns about its management of several multi-billion dollar modernization projects. 

During a joint hearing on Tuesday, lawmakers on the Subcommittee on Oversight and Investigations and the Subcommittee on Technology Modernization criticized the VA over its management of major technology programs, saying that the agency lacks consistent oversight and accountability procedures needed to ensure the success of its acquisitions. 

Rep. Matt Rosendale, R-Mont., ranking member of the Technology Modernization Subcommittee, suggested the establishment of a board to oversee the approval of VA’s contractor systems—in tandem with the committee and Congress—that would include the reporting of associated costs, schedules and performance information.

“The VA has to demonstrate better management before it can start any new programs, and we cannot entrust it with any more taxpayer money to chase after these failed programs,” Rosendale said. “It’s our responsibility to make sure the mistakes of the past are not repeated.”

Rosendale also cited the Government Accountability Office’s August report on the VA’s acquisition program management framework, which is designed to manage the department’s purchases of goods and services. While the framework was implemented in 2017, it remains voluntary and has not been used to manage VA’s major acquisitions. GAO previously added VA’s acquisition management to its high-risk list—or HRL—in 2019, which catalogs federal programs and operations that are “vulnerable to fraud, waste, abuse and mismanagement, or need transformation.” 

Michael Parrish—the chief acquisition officer and principal executive director of VA’s Office of Acquisition, Logistics and Construction—told the committee the VA is in the process of implementing a new binding and enforceable acquisition lifecycle framework, known as ALF, that “will serve as an effective tool to manage and oversee VA acquisitions” once it is implemented.

Parrish said the VA has also made significant progress in addressing GAO’s concerns with the agency’s acquisition management process since it was added to the HRL. Of the 51 HRL-related recommendations offered by GAO, Parrish said 37 of the recommendations have been closed and that the VA is in the process of addressing the remaining 14 open recommendations. 

As Parrish noted in his opening remarks, however, GAO has recommended that the VA take additional steps to shore up the ALF before it is adopted. 

“VA still faces many of the same challenges that hindered the success of the prior framework,” Shelby Oakley, GAO’s director of contracting and national security acquisitions, told the committee. “For example, VA can’t readily identify programs subject to varying levels of framework oversight, doesn’t know if it has the workforce with the skills necessary to implement the various aspects of the framework—especially at the program level—and has no current strategy to actually enforce its use.” 

Rep. Tracey Mann, R-Kan., ranking member of the Oversight and Investigations Subcommittee, expressed support for the concept of the ALF, but said that “until this framework is issued, and the binding and enforcement mechanisms are in place, VA should not begin any other major acquisitions.”

“Unfortunately, four major projects with a total cost of over $24 billion are already underway,” Mann said, adding that “it’s not too late to make sure that new projects are well-planned.”

The VA’s current supply chain management system—the Defense Medical Logistics Standard Support, or DMLSS—was adopted from the Department of Defense in 2019 to replace VA’s legacy systems, but has faced implementation issues of its own after it was launched as a pilot project at the Captain James A. Lovell Federal Health Care Center in North Chicago, Illinois. 

The VA’s Office of the Inspector General reported last November that the DMLSS, which is expected to cost roughly $2.2 billion over 15 years, “did not meet nearly half of all high-priority needs” at the rollout site and that VA “did not follow its own acquisition framework requirements.” In her testimony to the committee, Oakley noted that “VA is reassessing the future” of the DMLSS system. 

Lawmakers on the committee also remained highly critical of the VA’s Oracle-Cerner Millennium electronic health record system, which has faced criticism over its slow rollout, frequent outages and patient safety concerns. The VA initially signed a $10 billion deal with health IT provider Cerner in 2018—Oracle completed its acquisition of Cerner in June 2022—to design the EHR software, but the cost of the new system has grown to over $16 billion. A cost estimate provided to Congress by the Institute for Defense Analyses in July estimated that the lifecycle cost of the EHR system’s implementation would be $50.8 billion over 28 years. 

A July OIG report also found that over 11,000 clinical orders for veterans at the first site of EHR system rollout—the Mann-Grandstaff VA Medical Center in Spokane, Washington—were improperly routed to an “unknown queue” without the knowledge of clinicians. The VA, which has only rolled out the EHR system at five medical sites across the country, announced in July that it was delaying future rollouts of the software until next year.

Committee Chairman Mark Takano, D-Calif., called the EHR system “the poster child for major acquisition issues at VA,” but cautioned lawmakers to be careful of “rushing to judgment and rushing to certain conclusions” when it came to broader questions about the durability of some of VA’s ongoing projects. 

“The bathwater may be really bad on a lot of stuff, but throwing out the entire baby along with the bathwater may not be the best thing,” Takano said. 

Top Republican lawmakers on the committee have introduced bills—or announced plans to draft legislation—that would expand congressional oversight over the VA’s acquisition process. 

Rep. Mike Bost, R-Ill., the ranking member of the full committee, announced during a July hearing that he was drafting legislation to set a hard deadline for the EHR system’s rollout. And Rosendale also introduced legislation last year, known as the VA IT Reform Act, that would prevent the VA from “starting new major IT projects before submitting to Congress a cost estimate, schedule and performance goals for each project.” That bill was unanimously passed by the committee last November. 

Mann also announced during Tuesday’s hearing that he plans to introduce legislation—which he called the VA Supply Chain Management Authorization Act—to “authorize and set up parameters for the acquisition of a supply chain management system.”

“Congress can, and should, authorize these major acquisitions,” Mann added.