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Sole-Source Service Contracting at Regional Procurement Office West Needs Improvement

Report Information

Issue Date
Report Number
18-01836-185
VISN
State
District
VA Office
Veterans Health Administration (VHA)
Report Author
Office of Audits and Evaluations
Report Type
Review
Recommendations
3
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary
The VA Office of Inspector General (OIG) conducted reviews of each of the three Veterans Health Administration (VHA) Regional Procurement Offices (RPOs) to assess the use of sole source procedures when awarding service contracts valued at more than $700,000 in fiscal year (FY) 2017. A sole-source contract is awarded without full and open competition. The Federal Acquisition Regulation states, with a few exceptions, that a contracting officer will not negotiate sole-source contracts without a written justification and appropriate approvals. The lack of approval violates the Federal Acquisition Regulation, and without competition the government could pay more for goods and services and be more susceptible to fraud. The OIG reviewed 15 sole-source contracts awarded by RPO West with a total value of about $19 million to determine whether they were properly justified and approved, and found that this was not done for five contracts worth about $6 million. This occurred because RPO West contracting officers did not follow the required approval process and misunderstood who the proper approval authority was. When contracting officers violate federal regulation by failing to obtain the required approval for sole-source contracts, they exceed their contracting authority and this could result in the termination of their warrant, which is their authority to enter into, administer, or terminate contracts. RPO West contracting officers exceeded their authority on five contracts resulting in approximately $6 million in costs that were not completely justified. The OIG recommended the executive director of VHA procurement ensure personnel’s awareness of approval procedures and the required written justification for sole-source contracts, establish procedures to help make certain the appropriate authority approves all sole-source contracts, and review the actions of contracting personnel involved in the cited contracts to determine whether administrative actions are warranted.

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)
The OIG recommended the Executive Director, VHA Procurement, ensure awareness of approval procedures and the requirement to prepare a written justification and approval document for sole-source contracts,
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the Executive Director, VHA Procurement, establish procedures to help ensure all justification and approval documents are prepared and approved by the appropriate authority.
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the Executive Director, VHA Procurement, review the actions of contracting personnel involved in the cited contracts and determine whether administrative actions are warranted.
Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 6,034,026.00