Introduction:Talking points paper to discuss ongoing issues with current VA MSPV program and expectations of problems to follow MSPV Gen – Z contracts when awarded.  SDV-MPG members met with Senate and House Veterans Affairs Committees majority and minority staffs in June 2023.

 

VA’S MEDICAL/SURGICAL PRIME VENDOR PROGRAM

OPERATIONAL CHALLENGES

April 2023

 

Our members continue to face challenges with the MSPV program. We polled our membership and the following four categories consistently inhibit their ability to succeed. We hope this document will provide a guide for our discussion moving forward.

1. LACK OF COMMAND STRUCTURE:

  • Responsibility for program resides in 3 different VA areas:
    • SAC for Distribution Contract
    • VHA Office of Acquisition for BPA management
    • VHA field structure for BPA operations
    • VHA field structure for implementation
  • No mechanism in place to resolve conflicts/issues for VA field staff, prime vendors or suppliers.

 

2. POLICY/TRAINING:

  • No established policy on:
    • Agreements between Distributors & Suppliers
    • BPA pricing
    • Establishment of PVONs
    • Usage of MSPV contract
    • Establishment of CORE item list
    • Preferences for SDVOSBs
  • No training on policy and operations
  • Confusion by VA staff as to evaluating price increase requests
  • Confusion by VA staff as to hierarchy of contract vehicles

 

3. MANAGEMENT TOOLS/OVERSIGHT/COMPLIANCE

  • VA lack IT tools to manage the program
  • VA consistently overestimates quantities of products required
  • VA doesn’t know what it buys from what sources nor what price
  • No way to adjudicate disputes between distributors and suppliers
  • Prime vendors do not order from BPA holders
  • Prime vendors levy “bogus” fees on suppliers
  • Prime vendors do not pay suppliers timely
  • Drop shipments not regulated
  • “Bogus” deductions on invoices by distributors
  • Open market purchases not consistent with VETS First
  • Prime vendors do not show proper prices on screens for VA ordering personnel
  • Sales data from VA and prime vendors is inconsistent
  • PV items purchased off contract at higher prices

4. PRICING/PRODUCT ADDITIONS

  • Inconsistent processing of pricing requests
  • No replacement of BPAs for DAPA cancelations
  • No adding of new or replacement products or varying units of measure
  • No adding of products if not ordered via prime vendor program
  • Use of IPT teams has stopped the process
  • VA staff reaching out to manufacturers encouraging them to bypass SDVOSB suppliers
  • No committed volume
  • Price comparisons to contracts with differing terms and conditions
  • Use of tiered evaluation to compare all offeror’s prices to obtain the lowest possible price.

SUMMARY: As described above, the MSPV program is broken. No one person or office has total responsibility. VA has no accurate and consistent data to know what VA is purchasing, from whom or by what mechanism.VA data, when available is flawed. VA field personnel want to buy from sources they know and trust will provide them with the products they need when they need them. Prime vendor does not meet their needs or the needs of our veterans. Each VA facility seems to have its own policy. The MSPV formulary is losing products at an alarming rate as suppliers can’t afford to provide products at a loss. VA does not recognize the impact of inflation on suppliers and only cares about “lowest possible price”. We hope that by raising these issues we can create a functioning MSPV program and help service disabled veteran suppliers stay in business.