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Extension
of Remarks Honorable
Lane Evans The
Veterans Health-Care Items Procurement Reform and
Improvement Act of 2002
Mr. Speaker, the procurement of medical and surgical items is a
major expenditure for the Department of Veterans Affairs.
During fiscal year 2001, for example, VA reported spending more
than $1.3 billion for medical and surgical supplies and equipment.
The procurement of medical and surgical supplies and equipment by
VA is also an activity in need of significant reform and improvement.
To achieve these reforms, I am today introducing the “Veterans
Health Care Items Procurement Reform Improvement Act of 2002.”
I urge my colleagues to support and promptly enact this important
legislation. A
major provision of the “Veterans Health Care Items Procurement Reform
and Improvement Act of 2002” directs the Department of Veterans
Affairs, when procuring medical/surgical supplies and equipment, to buy
these items from the Federal Supply Schedule (FSS) or from national
contracts negotiated by VA. By
requiring most VA health medical/surgical supplies and equipment to be
purchased from the FSS or national contracts, VA can better leverage the
tremendous purchasing power of its annual budget in excess of $1 billion
for medical/surgical supplies and equipment.
When enacted, this legislation is expected to reduce VA procurement
costs by tens of millions of dollars annually.
This
legislation also provides for certain limited exceptions to the
centralized procurement requirement. For
example, it allows emergency purchases of medical/surgical supplies and
equipment from other than FSS or national contracts and permits purchases
of needed items not listed on the FSS.
Other limited exceptions should facilitate greater financial
savings from – and greater use of – important initiatives such as
VA/DOD sharing and small business procurement.
In
a May 15, 2001 assessment entitled, “Evaluation of the Department of
Veterans Affairs Purchasing Practices”, the VA Office of Inspector
General (OIG) reported, “The Department of Veterans Affairs is not
leveraging its buying power to obtain the best prices for items
purchased.” Among the
recommendations of the OIG were, “VA facilities be required to
purchase items that are on national contracts, such as FSS, and that the
FSS and other national contracts be mandatory sources of medical/surgical
supplies and equipment” and local procurement contracts be specifically
prohibited with very limited exceptions.
This
measure will provide strong encouragement to vendors who wish to do
business with VA to list their health-care items on part 65 and 66 of the
Federal Supply Classification as appropriate or as part of a National
contract. This legislation
will eliminate existing inefficiencies from the current acquisition system
that allows for multiple, locally-negotiated contracts with national
vendors and distributors. Despite
the enormous volume of health care items procured by VA, these local
contracts often do not provide VA purchasers with the best price offered
by vendors to other buyers.
In addition, this bill strengthens the contractual management and
oversight tools of the Department of Veterans Affairs.
It makes pre- and post- award contract audit clauses mandatory for
almost all types of procurement contracts for health-care items.
This will enable procurement officers, supervisors, the VA Office
of the Inspector General, and the GAO to review the true value and cost of
an item and assure compliance with contract provisions.
In fiscal year 1997 when audit clauses were more common, audits
accounted for the recovery of over $35 million dollars – last year with
audit clauses less common the total recovery was less than $12 million
dollars.
Other important provisions of this legislation will require most VA
procurement contracts to include a price reduction clause.
With the inclusion of a price reduction clause, when a vendor
offers a health-care item at a lower price to another buyer in a
commercial contract, VA will benefit from the purchase price reduction and
receive the new lower purchase price for a health-care item it has
previously agreed to purchase from the vendor.
Mr. Speaker, I encourage my colleagues to support “The Veterans
Health-Care Items Procurement Reform and Improvement Act of 2002,” and
seek its quick approval by Congress on behalf of our nation’s veterans
and taxpayers. |