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Today, House Committee on Veterans’ Affairs Technology Modernization Subcommittee Chairman Matt Rosendale (R-Mont.), delivered the following opening remarks, as prepared, at the start of today’s oversight hearing on VA IT contracting:

Good morning.

The Subcommittee will come to order.

We are here today to discuss the underlying trends that make the Department of Veterans Affairs’ information technology contracting so fraught with problems.

To put it simply, the market is concentrating.

Spending is going up, and the number of companies receiving the contracts is going down.

VA is not unique in this respect.

But as one of the largest IT buyers in the federal government, it is a striking example of how the system operates.

The system is marked by bureaucracy, regulatory capture, the revolving door, and impunity.

What you will not find in this system is much accountability.

This is why IT projects, meant to modernize how services are delivered to our veterans, stumble again and again.

They are rewarded with change orders that enrich vendors, while squandering valuable and limited resources, because contracts are not specific enough to hold vendors accountable.

The same companies cycle through the agency year after year.

Not only that, they merge and consolidate. That is becoming increasingly common.

And if they fail at one project, they simply reappear in another office with a different project.

They compete with each other, but they tend to operate within a closed loop.
So they rarely face competition from outside the government sector, which is where the innovation is found that most people associate with technology.

To be sure, once in a while, a disruptor manages to find its way through the jungle of paperwork and achieve impressive results, many times only to be acquired by a larger firm which eliminates competition and perpetuates the problems.

We should look around at the barriers that discourage new entrants or participants.

One is the sheer complexity of government contracting.

Another is the inability or unwillingness of agency officials to understand what the contractors are doing and hold them to account.

A third is the widespread practice of putting enormous, multi-year contract vehicles in place that function as an approved bidders list.

This enriches a well-placed few and shuts everyone else out.

The surefire consequence of this concentrating marketplace is widespread organizational conflicts of interest.

When the same few companies work in—and even make decisions for—all the major organizations within the VA, there is no way to maintain fair dealing.

Either the supplier base has to expand or some of these companies have to be barred from holding certain future contracts.

That is not my opinion—that’s what the procurement laws say.

It is the VA’s responsibility to police this system, and it is this Committee’s oversight responsibility to make sure that happens.

American veterans and taxpayers are rightfully outraged when they read about billions of dollars being paid out year after year with nothing to show for it—to an industry that always seems to be recession-proof.

I appreciate our witnesses joining us today to help us better understand this situation.

With that, I yield to Ranking Member Cherfilus-McCormick for her opening statement.