FOR RELEASE: January 29, 2002

EVANS INTRODUCES MAJOR PROCUREMENT 
REFORM LEGISLATION 
ANNUAL SAVINGS OF TENS OF MILLIONS 
OF DOLLARS EXPECTED  

Washington, DC - Congressman Lane Evans (D-IL) the senior Democratic member of the House Veterans Affairs Committee today introduced legislation to require major reform of Department of Veterans Affairs (VA) procurement of medical and surgical supplies and equipment.  Evans’ legislation (H.R. 3645), the Veterans Health Care Items Procurement Reform and Improvement Act of 2002, is expected to reduce VA procurement costs by tens of millions of dollars annually when enacted. 

          Evans said last year the VA reported spending more than $1.3 billion to purchase medical and surgical supplies and equipment, but competition to sell to VA has declined.  As a result, VA doesn’t leverage its enormous purchasing power to obtain the best prices.  The VA Office of Inspector General agrees with this conclusion. 

          Evans said 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 and obtain lower prices.   

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.

          Evans said his legislation 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.  In addition, the Evans’ bill 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.  

          The Evans’ measure also 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.       

      Evans’ 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 and 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.         

          Joining with Evans as original cosponsors of the Veterans Health Care Items Procurement Reform and Improvement Act of 2002 are Marcy Kaptur (D-OH); Stephanie Tubbs Jones (D-OH); Corrine Brown (D-FL); Bob Filner (D-CA); Stephen Lynch (D-MA); Bernie Sanders (I-VT); Silvestre Reyes (D-TX); Julia Carson (D-IN); Luis Gutierrez (D-IL); and, John Dingell (D-MI).

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