A leaked 35-page internal memo to VA Secretary Robert McDonald accuses the Department of at least $6 Billion in spending against a variety of federal laws and regulations.
Jan R. Frye, deputy assistant secretary for acquisition and logistics, describes a culture of “lawlessness and chaos” at the Veterans Health Administration, the massive health-care system for 8.7 million veterans.
“Doors are swung wide open for fraud, waste and abuse,” he writes in the March memo, which was obtained by The Washington Post. He adds, “I can state without reservation that VA has and continues to waste millions of dollars by paying excessive prices for goods and services due to breaches of Federal laws.”
VA procurement practices are mostly to blame as the agency has flouted rules regarding competitive bidding for contracts and abused workarounds for smaller purchases.
Frye describes in detail a series of practices that he says run afoul of federal rules, including the widespread use of purchase cards, which are usually meant as a convenience for minor purchases of up to $3,000, to buy billions of dollars worth of medical supplies without contracts. In one example, he says that up to $1.2 billion in prosthetics were bought using purchase cards without contracts during an 18-month period that ended last year.
He also explains how VA has failed to engage in competitive bidding or sign contracts with outside hospital and health-care providers that offer medical care for veterans that the agency cannot provide, such as specialized tests and surgeries and other procedures. Frye says VA has paid at least $5 billion in such fees, in violation of federal rules that the agency’s own general counsel has said since 2009 must be followed.
These procurement problems have been endemic at the Veterans Administration for years. Even the recent waitlist scandals did not force action on the waste, fraud and abuse going on at the VA,
For the most part, Frye does not explain why the rules are so widely flouted. But he suggests, in this discussion of purchase cards, that the reason may be laziness. He calls these payments an “easy button” way of buying things. Frye told McDonald he became aware in 2012 that government purchase cards were being used improperly by VA. About 2,000 cards had been issued to employees who were ordering products and services without contracts, Frye recounts.
He said his concerns grew after learning that a supervisor in New York had recorded more than $50 million in prosthetics purchases in increments of $24,999 — $1 under the charging limit on each card. In a response to a member of Congress who inquired about the purchases, Shinseki had few answers. “No contract files exist” and “there is no evidence of full and open competition,” Shinseki wrote in the letter, a copy of which was obtained by The Post.
In addition to the shoddy care the VA has been delivering to veterans, it is also overpriced and a drain on taxpayers. Yet it is still held up as an example of what wonders a single-payer government run health care system would accomplish.