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Witness Testimony of Jan R. Frye, U.S. Department of Veterans Affairs, Deputy Assistant Secretary for Acquisition and Logistics

Madam Chairwoman, Ranking Member Boozman and distinguished members of the Subcommittee, thank you for the opportunity to appear before you today to discuss the Department of Veterans Affairs (VA) acquisition operations with regard to Federal Contractor Compliance.  It is a privilege for me to represent the many dedicated and hard-working acquisition and logistics professionals throughout the Department who provide mission-critical support every day to ensure quality care and benefits delivery for America’s Veterans.

The Subcommittee requests VA respond to six questions regarding employment of Veterans in federal contracting.  I am pleased to respond to those questions today and address any other concerns the Subcommittee may have on this topic.

The Subcommittee asks for information on how VA monitors contractor compliance with Section 503 of the Rehabilitation Act of 1973 and the Vietnam Veterans’ Readjustment Assistance Act of 1974, as amended.  VA follows the provisions prescribed in the Federal Acquisition Regulation (FAR) Part 22 which require contracting officers to verify vendor compliance prior to award or modification of a contract.  VA contracting officers also include compliance clauses and provisions in VA solicitations and contracts.  In addition, VA contracting officers rely on the U.S. Department of Labor’s Veterans’ Employment and Training Services-100, also known as “VETS-100” database, to ensure successful offerors are compliant with and complete reporting requirements for the appropriate reporting year.  Additionally, as a verification mechanism, VA’s electronic contract management system allows VA to conduct reviews of statistically significant random samples of contract files to ensure the appropriate clauses and provisions are included in contracts.  As part of our Office of Management and Budget Circular A-123 Acquisition Reviews, each VA contracting activity is reviewed at least bi-annually for compliance in many areas of acquisition law and regulation.  During Circular A-123 reviews, VA uses this opportunity to sample a contracting activity’s contracts for compliance with FAR Subpart 22.13.  The results of our most recent sampling, covering three VA organizations and conducted during the last 12 months, indicates  all contracts in the sample contained the required contract provisions and clauses, and all contractors in the sample were fully compliant with the Department of Labor’s reporting requirements.

The Subcommittee also asks if VETS-100 is sufficient to provide insight into contractor compliance.  “We believe that the data are sufficient to provide the necessary insight.”

The Subcommittee asks if VA contractors are listing employment opportunities in the Federal Contractor Job Listing Program.  Ensuring VA contractors are listing opportunities using the Federal Contractor Job Listing Program is the responsibility of the Office of Federal Contract Compliance Programs (OFCCP), U.S. Department of Labor.  As such, VA must defer to OFCCP in this matter.

The Subcommittee asks for information on any action taken by VA to address non-compliant contractors, and whether non-compliance affects a company’s ability to do business with VA.  Based on VA’s Office of Management and Budget Circular A-123 reviews for Fiscal Years 2009 and 2010, we currently do not have any non-compliant contractors.  Non-compliance may affect a company’s ability to contract with VA.  Contractors deemed non-compliant, are subject to provisions prescribed in FAR Part 22.  The first step VA will take in such a case is to notify the Department of Labor and initiate efforts to remedy contractor non-compliance.  Failure of the contractor to become compliant with the terms and conditions of the contract has consequences which could result in termination of the contract for default or cause, and could ultimately lead to suspension or even debarment of the contractor from federal contracting.  VA contracting officers check the Excluded Parties List System maintained by the General Services Administration to ensure prospective offerors are not suspended, debarred or ineligible.  In addition, the Past Performance Information Retrieval System (PPIRS) includes information on contractor ethics and integrity in the Federal Awardee Performance and Integrity Information System (FAPIIS) section.  VA contracting officers use this web-based application to evaluate contractor past performance data, including terminations for cause or default, defective cost and pricing data, and determinations of non-responsibility.  Records created in FAPIIS are used to ensure contracts are awarded to responsible contractors. The subcommittee asks if VA received any complaints from Veterans on this issue.  As part of VA’s Office of Management and Budget Circular A-123 reviews previously mentioned, each contracting activity is reviewed at least bi-annually for compliance in many areas, including VETS-100 reporting.  During Fiscal Years 2009 and 2010, the Office of Acquisition and Logistics has not received complaints from Veterans regarding Federal contractor non-compliance with legal authorities. 

Lastly, the Subcommittee asks for information on steps VA took to improve VA contractor compliance since the May 14, 2009, hearing.  I am pleased to note that a significant step taken since the hearing is our effort to enhance VA’s electronic contract writing system.  This enhancement integrates a mandatory feature which requires contracting officers to record an entry when they query the VETS-100 database prior to award or the exercise of a contract option.  This mandatory entry is a fail-safe mechanism which will prevent contracting officers from releasing an award or contract modification through the system without certifying the current VETS-100 reports have been submitted by the successful offeror.  This enhancement allows VA to confirm compliance for all data entered into the electronic contract writing system.

In addition, after last year’s hearing, VA reinforced its policy which requires all VA acquisition professionals to operate in compliance with VETS-100 reporting requirements as prescribed in FAR Part 22.  VA’s policy was recently updated to incorporate the use of the new VETS-100A reporting document.

Madam Chair, in closing I would to thank the subcommittee for the opportunity to testify today on the Federal Contractor Compliance Program at VA, as well as for the subcommittee’s continuing support for America’s Veterans.  I will be pleased to respond to any questions you or the subcommittee’s members may have.  Thank you.