VA’s Use of the Defense Logistics Agency’s Electronic Catalog for Medical Items

In October 2017, VA entered into an interagency agreement with the Defense Logistics Agency (DLA) to use its Electronic Catalog (ECAT) to order VA medical supplies and equipment not available through existing contracts. VA created the ECAT Ordering Guide to describe VA policies and procedures for placing orders and to outline the ordering officials’ responsibilities. The VA Office of Inspector General (OIG) conducted this review to determine whether VA’s procurements through ECAT complied with acquisition regulations, policies, and the terms of the interagency agreement. The OIG found that the ECAT Ordering Guide excludes the requirement for ordering officials to consider the Federal Supply Schedule (FSS) contracts for sales orders; purchasing through FSS could have saved up to $4.4 million. The guide also incorrectly describes how to apply the Rule of Two, which requires contracting officers to award contracts to veteran-owned small businesses if they reasonably expect that at least two such businesses will submit offers and that the awards can be made at fair and reasonable prices. An incorrect application of the rule could potentially exclude veteran-owned businesses from contracting opportunities. The OIG made six recommendations. The ECAT Ordering Guide should be updated to clarify the requirement that staff must consider FSS contracts before ordering through ECAT. VA should also monitor orders to identify recurring acquisitions that could be purchased through other contracts at lower prices and require justifications for ECAT orders if FSS contracts are available and not used. Additionally, the Procurement and Logistics Office (P&LO) should correct the Rule of Two diagram in the ordering guide and monitor compliance, establish a process to ensure documentation and audits of orders meet ordering guide requirements, and conduct and document annual reviews as required in the interagency agreement.