What We Did
The National Defense Authorization Act for FY 2008 requires the DoD Office of Inspector General and the Department of Veterans Affairs (VA) Office of Inspector General to review procedures for DoD interagency purchases made through VA. We reviewed 20 direct interagency acquisitions, valued at $13.7 million, to determine whether DoD and VA improved their interagency purchasing practices since our last audit, Report No. D-2009-043, "FY 2007 DoD Purchases Made Through the U.S. Department of Veterans Affairs," January 21, 2009.
What We Found
DoD contracting officials generally complied with policies and procedures when issuing direct interagency acquisitions through VA. Specifically, DoD contracting officers defined requirements and used funds appropriately when awarding contract orders on all 20 direct interagency acquisitions, competed 5 orders, justified 13 sole-source orders, and documented receipt of products for 18 orders. However, DoD contracting officers did not:
- de-obligate unused funds of $293,625 for one order and obtain a refund of $44,952 on another order for products not delivered because the contracting officer did not track funds and items delivered properly. See Appendix E for a summary of potential monetary benefits;
- determine whether the prices paid for 131 open market products (products not on vendors VA Federal supply schedules), valued at $5.3 million, on 5 orders were fair and reasonable because they relied on information in vendor quotes and pricelists without verifying that the products were on the vendors VA Federal supply schedules;
- request price reductions for 6 orders, valued at $2.7 million, because the vendor did not provide discounts in the past or contracting officials were not aware that they were required to seek price reductions; and
- support best procurement approach determinations for 4 orders, valued at $9.1 million.
As a result, DoD might not have always received the best value when using VA for direct interagency acquisitions.
What We Recommend
We recommend the Director, U.S. Army Medical Research Acquisition Activity; the Director, North Atlantic Regional Contracting Office; the Commander, Naval Medical Logistics Command; the Director of Contracting, 502 Contracting Squadron; and the Commander, 802 Contracting Squadron, provide refresher training to their contracting officers that focuses on the problems in this report. We recommend the North Atlantic Regional Contract Office contracting officer de-obligate funds in the amount of $293,625. We recommend the U.S. Army Medical Research Acquisition Activity contracting officer seek a refund of $44,952 for products not delivered.
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