VA Acquisition Management: Oversight of Service Contracts Needing Heightened Management Attention Could Be Improved
Fast Facts
VA increasingly relies on contractors for a wide range of services. But if contractors perform certain functions—e.g., providing legal advice or supporting budget prep—without additional oversight from government officials, they could pose risks to government decision-making and accountability.
The Office of Management and Budget issued guidance to help agencies determine which contracted services need this oversight. However, VA has yet to fully implement this guidance. For instance, VA hasn't directed its staff on how to plan and conduct oversight of these contracts.
We recommended that VA fully implement the OMB guidance, among other things.
Highlights
What GAO Found
The Department of Veterans Affairs (VA) has increasingly relied on contractors to perform tasks and services—such as medical, professional and management support, and hospital construction and maintenance services—to achieve its mission.
Department of Veterans Affairs (VA) Obligations on Service Contracts, Fiscal Years 2018 through 2022
GAO cannot report on VA's use of service contracts involving functions needing heightened management attention because VA's data are unreliable and incomplete. VA is required by law to analyze data about its service contracts annually to ensure, among other things, oversight of service contracts involving functions that need heightened management attention. However, VA's data analysis excluded contracts for medical and social services, which accounted for most of VA's obligations on contracts coded as needing heightened management attention. This is in part due to VA misinterpreting guidance from the Office of Management and Budget's Office of Federal Procurement Policy (OFPP) when selecting functions for the analysis.
OFPP issued guidance in 2011 to assist agencies in managing potential risks associated with contracts including functions that need heightened management attention, but VA has not fully implemented it. Specifically:
- VA guidance does not provide directions for how to plan and conduct oversight of these contracts.
- VA has yet to strategically plan its workforce to ensure sufficient personnel are available to provide heightened management attention.
- VA does not routinely offer related training to its employees.
VA officials for the 12 service contracts that GAO reviewed also reported uneven awareness and limited oversight of contracts including functions needing heightened management attention.
By taking steps to more fully implement OFPP guidance and improve the completeness of its service contract data, VA can position itself to better ensure it mitigates the potential risks associated with contractors performing functions that need heightened management attention.
Why GAO Did This Study
For certain service functions, OFPP guidance identifies agency responsibilities for addressing possible risks. These risks include the potential for contractors to inappropriately influence the government's authority, control, and accountability for decisions. Contracts with these risks need heightened management attention. GAO has previously reported how other federal agencies could better mitigate challenges to overseeing service contracts involving functions that need heightened management attention, such as by developing related guidance.
GAO was asked to review VA's use of service contracts involving functions needing this heightened attention. This report assesses, among other things, the extent to which VA uses and oversees these contracts.
GAO analyzed data that VA personnel entered in the Federal Procurement Data System from fiscal years 2018–2022; selected a sample of 12 contracts reflecting a range of contracting activities for in-depth review; interviewed VA officials and contracting personnel; and reviewed policies, guidance, and documentation.
Recommendations
GAO is making seven recommendations to VA, including that it improve the completeness of its service contract data, and that it more fully implement OFPP guidance by issuing additional VA guidance, analyzing its workforce needs, and improving training. VA agreed with GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Veterans Affairs | The Secretary of Veterans Affairs should direct the Senior Procurement Executive to take steps to ensure that VA appropriately tracks special interest functions across product and service code changes to improve service contract inventory data completeness. (Recommendation 1) |
VA agreed with this recommendation. In July 2024, VA communicated its plans to implement a number of steps to address the recommendation, including development and implementation of a service contract inventory standard operating procedure, and development of a standardized process to track special interest functions across product and service codes. VA anticipates an implementation date of February 2025.
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| Department of Veterans Affairs | The Secretary of Veterans Affairs should direct the Senior Procurement Executive to take steps to ensure that VA identifies additional VA-specific special interest functions to more comprehensively include those that are associated with contracts coded in government-wide databases as involving critical functions and functions closely associated with IGFs to improve the usefulness of its annual service contract inventory analysis. (Recommendation 2) |
VA agreed with this recommendation. In July 2024, VA communicated its plans to implement a number of steps to address the recommendation, including development and implementation of a service contract inventory standard operating procedure, and development of guidance on business, operational, and stakeholder requirement definitions to ensure the requirements are specific and detailed enough to avoid ambiguity and prevent inappropriate delegation of IGFs. VA anticipates an implementation date of February 2025.
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| Department of Veterans Affairs | The Secretary of Veterans Affairs should direct the Senior Procurement Executive to develop policies and procedures for identifying and documenting contracts involving functions needing heightened management attention and fully implement OFPP Policy Letter 11-01, including, but not limited to, establishing when use of the department-wide checklist is required and specifying the analysis needed to support completion of the checklist. (Recommendation 3) |
VA agreed with this recommendation. In July 2024, VA communicated its plans to implement a number of steps to address the recommendation, including development and implementation of enterprise guidance for the VA acquisition community related to improving VA compliance with OFPP Policy Letter 11-01, and development of a risk-based strategy for defining service requirements leading to potential IGF-based contracts. VA anticipates an implementation date of February 2025.
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| Department of Veterans Affairs | The Secretary of Veterans Affairs should direct the Senior Procurement Executive to develop policies and procedures for planning and conducting oversight of contracts that involve functions needing heightened management attention, including how to provide appropriate direction to contracting officer's representatives in their designation letters, to improve employees' awareness, understanding, and fulfillment of their responsibilities under OFPP Policy Letter 11-01. (Recommendation 4) |
VA agreed with this recommendation. In July 2024, VA communicated its plans to implement a number of steps to address the recommendation, including development and implementation of enterprise guidance for the VA acquisition community related to improving VA compliance with OFPP Policy Letter 11-01, and development of a risk-based strategy for defining service requirements leading to potential IGF-based contracts. VA anticipates an implementation date of February 2025.
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| Department of Veterans Affairs | The Secretary of Veterans Affairs should direct the Senior Procurement Executive to update VA's methodology for conducting its annual service contract inventory analysis to prioritize contracts involving functions closely associated with IGFs and critical functions in the sample contracts selected for review, and to conduct more meaningful analysis, to support conclusions concerning VA's oversight and management of these contracts. (Recommendation 5) |
VA agreed with this recommendation. In July 2024, VA communicated its plans to implement a number of steps to address the recommendation, including development and implementation of a service contract inventory standard operating procedure, and development of guidance on business, operational, and stakeholder requirement definitions to ensure the requirements are specific and detailed enough to improve service contract inventory data. VA anticipates an implementation date of February 2025.
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| Department of Veterans Affairs | The Secretary of Veterans Affairs should direct the Senior Procurement Executive, the heads of administration and staff office human capital functions, and the heads of contracting activities to ensure that human capital plans determine whether the acquisition workforce—including program managers and contracting officer's representatives—is of sufficient size and capability to conduct oversight of contracts involving functions that need heightened management attention, consistent with OFPP Policy Letter 11-01. (Recommendation 6) |
VA agreed with this recommendation. In July 2024, VA communicated its plans to implement a number of steps to address the recommendation, including collaboration across the enterprise to ensure human capital plans to determine the sufficient size and capability for the entire acquisition community support the capacity needs for providing oversight of service contracts. VA anticipates an implementation date of February 2025.
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| Department of Veterans Affairs | The Secretary of Veterans Affairs should direct the Senior Procurement Executive to develop training, and require that employees complete such training at least once every 2 years, to help employees understand and meet their responsibilities under OFPP Policy Letter 11-01, including identifying and documenting contracts involving functions needing heightened management attention and planning and conducting oversight of such contracts. (Recommendation 7) |
VA agreed with this recommendation. In July 2024, VA communicated its plans to implement a number of steps to address the recommendation, including development and implementation of training courses and methodologies to ensure the VA acquisition community is appropriately trained to meet specified roles and responsibilities. VA anticipates an implementation date of February 2025.
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