Introduction: Summary of Congressional Hearing on “VA Major Acquisitions Failure: In Search of Solutions”.

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Congressional Hearing Summary

 

Committee:  House Veterans Affairs – Subcommittee on Oversight and Investigations and Subcommittee on Technology Modernization

Subject:  VA Major Acquisitions Failures: In Search of Solutions

Date: 9/20/2022

 

Members Present

Chairman Pappas (D-NH)               Rep. Mann (R-KS)

Rep. Takano (D-CA)                        Rep. Rosendale (R-MT)

Rep. Radewagen (R-AS)                  Rep. Bergman (R-MI)

 

Witness Panel

Michael Parish, Chief Acquisition Officer and Principal Executive Director, Office of Acquisition, Logistics, and Construction, U.S. Department of Veterans Affairs

Accompanied by:        Michele Foster, Associate Executive Director, Technology Acquisition Center, U.S. Department of Veterans Affairs

Angela Billups, Executive Director, Office of Acquisition and Logistics, U.S. Department of Veterans Affairs

Shelby Oakley, Director of Contracting and National Security Acquisitions, U.S. Government Accountability Office

 

 

 

Overview

On September 20, the House Subcommittee on Investigations and the House Subcommittee on Technology Modernization conducted a joint oversight hearing on VA major acquisition failures.  The impetus of the hearing is a frustration on the money being wasted on the Electronic Health Record (EHR) deployment and a lack of accountability on all other acquisitions as well.  The Committee has not received any specifics from VA on supply chain modernization and how to ensure another contract failure like Cerner’s occurs.

 

Opening Remarks

Chairman Pappas

  • Chairman Pappas concerned about VA’s history of failure in major acquisitions of new systems (delays, cost overruns, etc)
  • Billions of dollars wasted
  • $40 billion annual contract obligations – that number has doubled over the past decade
  • VA continues to struggle to acquire a modern Electronic Health Record. Deployment plan announced in 2018
  • GAO and VA IG have identified mismanagement of EHR rollout
  • IG has reported mismanaged EHR has resulted in patient harm
  • GAO has also reported multiple times on failed attempts in supply chain modernization
  • Modern supply chain system is years from deployment
  • VA remains on VA High Risk list for acquisition management
  • New Acquisition plan lacks specifics and timetables
  • Cautiously optimistic about Parish leadership

 

Ranking Member Mann

  • Mann says DMLSS failures taught VA an important lesson. VA has to get better at deploying its own requirements and cannot blind copy DoD or any other agency
  • Parish is working on a new “concept” that will mirror existing policy. Until framework is issued.  VA should not begin new acquisitions
  • Plans to introduce an authorization bill to establish requirement and metrics on major acquisitions
  • Believes Congress needs to provide structural changes to VA to allow more oversight

 

Chairman Takano

  • Applauds Ranking Member’s assessment on DMLSS.
  • Not happy about deployment of technology modernization at VA
  • Fundamental lack of planning at VA
  • Worried about how VA’s IT systems are not capable of handling new claims that will result because of recent passage of the PACT Act
  • Where are the checks and balances in VA’s oversight of major acquisitions?
  • Worried Parish does not have the appropriate authority
  • Key positions at VA need to be filled to allow continuity across administrations

 

Ranking Member Rosendale

  • No rulebook to manage major acquisitions
  • EHR modernization - $5.5 billion without a reliable cost estimate
  • Not even functional at one facility
  • Rosendale proposal for future acquisitions 1. No contractor system can be approved without a business case 2.  Must go before a board to approve the business case including, cost, schedule, and performance
  • Systems are not developed properly to get veterans benefits

 

Michael Parish

  • Establishing a systems approach is critical to transforming acquisition management at VA
  • VA must first identify the business need
  • Rigorous governance structures to drive modernization
  • Conducting oversight on major technology acquisitions, regularly meet with CIO and CFO to ensure proper stewardship of taxpayer dollars
  • Progress has been made to address GAO High Risk list, 80 total GAO recommendations
  • Personally involved in trying to make progress on this list
  • Acquisition Lifecycle Framework (ALF) not implemented across VA yet

 

Shelby Oakley

  • Since 2012, 89% increase in contract spending
  • VA capacity for managing has not kept pace
  • Both existing and planned processes at VA for acquisition management could help VA provide uniform oversight
  • None of VA major acquisitions followed any acquisition frameworks
  • VA conducted analysis to show other solutions other than DMLSS but did not use information to drive decision making
  • VA is now on fourth attempt to revamp MSPV
  • VA faces many of same challenges: can’t identify programs subject to oversight, workforce issues, no current strategy to enforce
  • Recommend VA delay implementation of ALF
  • Encouraged by time and attention VA is currently making but there is no coordinated effort

 

Highlights from Q&A

Cerner/Oracle

  • Poster child for major acquisition issues at VA
  • Resulted in patient safety issues
  • No insights from EHRM leadership
  • Parish is focused on contract enforcement with Cerner
  • Parish believes his level of involvement is sufficient and he has enough authority with EHR
  • Technology Acquisition Center in constant contact with program office on EHR and VA feels the TAC has done an adequate job with Cerner
  • Rosendale wants to see documents of business case with Cerner. Parish commits to provide documents
  • Change orders from Cerner have resulted in contract modifications because of COVID
  • VA has agreed to pay $44.9 million in contract adjustments to Cerner
  • Base contract expires in May of 2023

 

Acquisition Framework

  • Supply chain modernization has not done a good job of establishing requirements
  • VA has developed a statement of objectives to allow contractors establish how they are going to achieve what VA needs
  • A “system of systems” – top four needs – visibility in inventory management, order management, asset management, risk management
  • Supposed to be released in August, no cost and schedule information
  • VA has identified the business need and what they define as success but no specific metrics
  • Parish states VA has received industry and field input
  • 68 pages of feedback from industry partners
  • Anticipate having another draft out in next few weeks
  • No specific date given for an RFP
  • GAO wants VA to put metrics and measure in place to assess the new acquisition framework

 

GAO

  • ALF framework is supposed to apply to all acquisitions but VA can’t identify their own acquisition programs
  • GAO does not have insight into programs that are following new framework
  • VA says major challenge is identifying what a major acquisition is
  • Parish says in current structure VA has the ability to stop programs
  • GAO believes VA CAO has broad authority but have not seen any CAO exert their authority to make changes in VA acquisition
  • GAO to issue new report in the next few weeks on VA’s acquisition workforce
  • VA lacks the capacity systemwide to understand who is in their acquisition workforce – took GAO six months to get an accurate number from VA
  • Parish acknowledges that data is an issue for VA
  • Oakley states she has never seen VA successfully implement a major acquisition

 

MSPV

  • Chairman Pappas frustrated that there has not been an answer on DMLSS and lack of clarity on DMLSS
  • Parish states DMLSS only deployed at joint facility in Chicago
  • Next Generation contract not tied to DLA
  • Supply Chain modernization solicitation early January/February 2023

 

PACT Act

  • Chairman Takano wants VA to assess new technology needs after passage of the PACT Act