A Summary of Preaward Reviews of VA Federal Supply Schedule Pharmaceutical Proposals Issued in Fiscal Year 2021

The VA Office of Inspector General (OIG) reviews pharmaceutical proposals submitted to the VA National Acquisition Center for Federal Supply Schedule contracts valued annually at $5 million or more. The reviews are not published because they contain sensitive commercial information protected from release under the Trade Secrets Act. To promote transparency, this report summarizes the 15 preaward reviews of the pharmaceutical proposals that the OIG conducted in fiscal year 2021. The 15 proposals had a cumulative 10-year estimated contract value of about $8.3 billion and included a total of 846 offered drug items. The review team concluded, in part, that commercial disclosures were accurate, complete, and current for four of the 15 proposals reviewed. This means only those four disclosures were reliable for determining negotiation objectives and for fair and reasonable pricing. The remaining 11 proposals could not be reliably used for negotiations until the noted deficiencies were corrected. The OIG made recommendations for lower prices than offered for 10 of the 15 proposals by also examining comparable “tracking customers,” resulting in total recommended cost savings of approximately $328.8 million over the life of the contracts. Of that total, about $42.6 million in cost savings resulted from the Acquisition Center awarding contracts or modifications based on the OIG price recommendations. This report details the actions the OIG took in these reviews but does not propose any additional VA corrective actions.