A Synopsis of Preaward Reviews of VA Federal Supply Schedule Pharmaceutical Proposals Issued in Fiscal Year 2019

VA and other government agencies spend billions of taxpayer dollars annually through VA’s Federal Supply Schedule (FSS) contracting program. The FSS program provides the government a simplified process for acquiring commercial supplies and services in varying quantities while obtaining volume discounts. This report is a synopsis of the Office of Inspector General’s (OIG) 19 FSS pharmaceutical proposal reviews completed before VA awarded the contracts (preaward reviews) during fiscal year 2019 in order to help VA obtain the best pricing. OIG preaward reviews of FSS pharmaceutical proposals are internal reports for VA contracting officers that are unpublished due to protected sensitive commercial pricing information. The OIG is publishing this summary to provide more information on the impact of these reviews. Preaward reviews provide VA with information on whether commercial pricing disclosures are reliable for negotiations. The reviews also make pricing recommendations based on the offeror’s commercial selling practices. Preaward reports are used by contracting officers to negotiate fair and reasonable prices for the government and taxpayers. The OIG determined that commercial pricing disclosures were not reliable for negotiations for 14 of the 19 proposals and recommended VA obtain revised disclosures before awarding the contracts. The OIG’s lower FSS pricing recommendations collectively reflected more than $1 billion in estimated cost savings to VA. Nearly $203 million has been sustained by VA as of May 8, 2020. The 19 proposals included 862 offered drug items.