I would like to thank everyone for attending today’s Oversight and Investigations Subcommittee hearing entitled, Acquisition Deficiencies at the U.S. Department of Veterans Affairs.  Thank you especially to our witnesses for testifying today.  

We are here to examine the U.S. Department of Veterans Affairs acquisition system and procurement structure.  Our hearing will hopefully determine the extent of the reform needed in order to ensure that the acquisition process within the VA is one that is fair, fiscally responsible, and effective. And, most importantly, serves veterans.

We all know that the acquisition system within the Department of Veterans Affairs has failed to develop a process that is both transparent and fiscally responsible. One recent report, produced by the U.S. Government Accountability Office revealed that Network and Medical Center staff within the Veterans Health Administration failed to use the Federal Supply Schedule or FSS, due to a lack of information and the proper tools needed to use the FSS. This resulted in a lost savings of almost $8.2 million a year or $41 million over 5 years.  This is simply unacceptable.

Several VA Office of Inspector General and Government Accountability reports have detailed major deficiencies within the procurement process at the VA, citing prolific material weaknesses, and how Small Disabled Veteran Owned Businesses are being cheated out of millions of dollars in contract opportunities each year due to a lack of sufficient oversight.  Just last month, the GAO released a report on the Service-Disabled Veterans–Owned Small Business Program showing a fragmented structure within the VA, and a lack of oversight of companies claiming Service-Disabled Veterans-Owned Small Business status.  Fraud and abuse has allowed ineligible firms to improperly receive millions of dollars in set-aside and sole-source contracts, potentially denying legitimate service-disabled veterans and their businesses the benefits of the veteran small business program.  With the ineffective oversight and lack of effective fraud prevention controls, these ineligible firms have received almost $100 million of contracts over the years. 

It is no secret that there are major deficiencies within VA’s procurement process, and to blame are a number of things, including a lack of a centralized acquisition structure, self policing policies in place that allow fraud and abuse, and continuous material weaknesses. Although I remain fairly optimistic that reform of this system can be accomplished, legislation to fix these problems may be necessary, along with change in policy and procedures.  I am grateful that the GAO as well as Service-Disabled Veteran-Owned Small Business owners and entrepreneurs are here today to shed light on issues such as these.