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WASHINGTON, DC – Today, Rep. Matt Rosendale (R-Mont.), the Chairman of the House Committee on Veterans’ Affairs Subcommittee on Technology Modernization, delivered the following opening remarks, as prepared, at the start of the subcommittee’s hearing on VA’s broken medical supply chain modernization project:

Good afternoon. The Subcommittee will come to order.

Today we will examine the VA Supply Chain Modernization project.

The VA refused to share basic information about this effort until a little more than 24 hours ago, giving us no choice but to hold this hearing.

We know the Department spends billions of dollars each year on medical supplies and other goods and struggles to manage its inventory effectively.

The Government Accountability Office and the Inspector General have written a mountain of reports documenting these problems.

There is waste and dysfunction in every step of the process, and it is frustrating to the health care providers who expect to get the right supplies in a timely fashion to care for veterans.

The broken supply chain was on display in 2020 when COVID-19 caught the VA completely unprepared, and medical center managers were desperately compiling and exchanging inventory lists and rationing supplies to their frontline staff.

After that, the VA attempted to install the Department of Defense’s medical supply chain system, but had to abandon it in 2022 when it failed to meet most VA requirements.

More recently, the VA put together the Supply Chain Modernization project—which is even more ambitious.

I absolutely agree that the VA needs to modernize some key systems and connect purchasing to inventory and payment.

But the Department already has a project to do that—called Financial Management Business Transformation—which we have had several hearings about, and is struggling to finish.

The Supply Chain Modernization project is a gigantic effort the likes of which we have only seen with the EHR, and we know how that has turned out.

It would not only replace the systems I mentioned, it would try to knit together an all-encompassing system to manage every aspect of a unified VA supply chain, from tongue depressors to X-ray machines to printer paper to headstones.

The VA has been soliciting proposals from contractors to do this for nearly a year.

Now, we are hearing that a contract award is imminent, but we still have only a rough idea of what the project may entail.

The lifecycle cost estimate is stratospheric, and there does not seem to be any approved budget.

The effort may extend for a decade, but there is no schedule.

The concept is grandiose, but there is very little detail about how it may be accomplished.

The VA may actually be preparing to pay a contractor to finish writing its work plan and its schedule.

Our witnesses will assure us that VA’s financial liability is limited.

However, I am concerned that, in effect, the government will be paying a contractor in order to find out what the government will be buying from that company.

That does not bode well.

In the real estate development business, if you start a project without blueprints or a budget, you are sure to end up with half-built, empty buildings.

This is much the same.

Without a doubt, the VA and the veterans it serves would benefit from a functional inventory management system.

And the Department could make better use of taxpayer dollars if the systems used to order medical supplies were connected to the systems that pay for and track them.

However, what is described in VA’s request for proposals seems to be a bureaucratic, empire-building, mega-project.

This needs to come down to earth before it’s too late.

I appreciate our witnesses who are present today.

This Subcommittee expects truthful and complete answers so we can carry out our responsibility to make sure VA’s IT modernization efforts are on solid ground and prevent more costly failures.