Review of Alleged Improperly Sole Sourced Ophthalmology Service Contracts at the Phoenix VA Health Care System

OIG reviewed this complaint alleging that the PVAHCS improperly sole-sourced ophthalmology contracts to Barnet Dulaney Perkins, and the Chief of Staff and Interim Associate Director had a conflict of interest with BDP. We did not substantiate that the PVAHCS improperly sole-sourced ophthalmology service contracts to BPD, but found that the PVAHCS and NCO 18 used full and open competition to award BPD three ophthalmology service contracts valued at just over $30.4 million, respectively, on February 1, 2006 and October 1, 2009. However, NCO 18 contracting officer did not properly maintain contract documentation in eCMS for two contracts. The PVACHS’s issuance of just over $12.4 million in unauthorized commitments to BDP and the lack of recruitment of VA ophthalmologists may have made it appear that these contracts had been sole-sourced. We did not substantiate the allegation of a conflict of interest between the named PVACHS officials and BDP because we found no evidence that a business, financial, and/or personal relationship existed between them and BDP. The PVAHCS officials had pressured the contracting officer to sole-source additional contracts to BDP because of concerns over possible delays in care and lapses in the continuity of care, but the contracting staff did not give into the pressure, and the PVAHCS began using VA’s PC3 contracts in March 2015. We recommended the Service Area Office West Director ensure the proper maintenance of contracting files and the PVAHCS Director ratify the unauthorized commitments and develop a business case for the provision of ophthalmology services. The NCO 18 provided contract documents almost one year after the start of the review that showed NCO 18 properly awarded the contracts and the first allegation was unsubstantiated. The PVAHCS and SAOW Directors agreed with the recommendations and provided responsive action plans.