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Review of VA's Management of Health Care Center Leases

Report Information

Issue Date
Report Number
12-04046-307
VISN
State
Alabama
California
North Carolina
Pennsylvania
District
VA Office
Veterans Health Administration (VHA)
Acquisitions, Logistics, and Construction (OALC)
Report Author
Office of Audits and Evaluations
Report Type
Audit
Recommendations
4
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary
We conducted this review to determine if VA effectively managed timeliness and costs in the procurement process of seven Health Care Center (HCC) leases. We found that VA’s management of the HCC lease procurement process has not been effective. As of August 2013, only four of seven leases had been awarded and no HCCs had been built, despite VA’s target completion date of June 2012. This occurred because the HCCs were a new initiative and guidance was not available for planning leases of this magnitude. VA did not meet the milestones it established for HCC activation and occupancy in spite of providing Congress with an aggressive project schedule. Given the lack of progress to date and the inadequate planning documentation, it will take far more time than Congress anticipated for VA to award and activate the seven leases. Further, VA could not provide accurate information on HCC spending into April 2013; officials provided various estimates, from about $4.6 million to $5.1 million, on costs to prepare for HCC lease awards. According to VA officials, central cost tracking was not in place to ensure transparency and accurate reporting on all HCC expenditures. Until effective central cost tracking is instituted, expenditures to acquire the leases will not fully be accounted for. VA also will not have reasonable assurance of accuracy in reporting total HCC costs to Congress. We recommended the Principal Executive Director, Office of Acquisition, Logistics, and Construction, and the Under Secretary for Health: establish adequate guidance for management of the procurement process of large-scale build-to-lease facilities; provide realistic and justifiable timelines for HCC completion; ensure HCC project analyses and key decisions are supported and documented; and establish central cost tracking to ensure transparency and accurate reporting on HCC expenditures. The Principal Executive Director, Office of Acquisition, Logistics, and Construction, and the Under Secretary for Health concurred with our recommendations.

Open Recommendation Image, SquareOpenClosed and Implemented Recommendation Image, CheckmarkClosed-ImplementedNot Implemented Recommendation Image, X character'Closed-Not Implemented
No. 1
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
We recommended the Principal Executive Director, Office ofAcquisition, Logistics, and Construction, in coordination with the UnderSecretary for Health, establish adequate guidance for the procurement oflarge-scale build-to-lease facilities.
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
We recommended the Principal Executive Director, Office ofAcquisition, Logistics, and Construction, in coordination with the UnderSecretary for Health, provide realistic and justifiable timelines for award,construction, and activation of the Health Care Center leases.
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
We recommended the Under Secretary for Health, in coordination withthe Principal Executive Director, Office of Acquisition, Logistics, andConstruction, ensure supporting analyses and key decisions regarding theHealth Care Center leases are supported and documented.
No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
We recommended the Under Secretary for Health, in coordination withthe Principal Executive Director, Office of Acquisition, Logistics, andConstruction, establish central cost tracking to ensure transparency andaccurate reporting on Health Care Center expenditures.