The Department of Veterans Affairs has been spending at least $6 billion a year in violation of federal contracting rules to pay for medical care and supplies, wasting taxpayer money and putting veterans at risk, according to an internal memo written by the agency’s senior official for procurement.
In a 35-page document addressed to VA Secretary Robert McDonald, the official accuses other agency leaders of “gross mismanagement” and making a “mockery” of federal acquisition laws that require competitive bidding and proper contracts.
Jan Frye, deputy assistant secretary for acquisition and logistics, describes a culture of “lawlessness and chaos” at the Veterans Health Administration, the massive health-care system for 8.7 million veterans.
“Doors are swung wide open for fraud, waste and abuse,” he writes in the March memo, adding, “I can state without reservation that VA has and continues to waste millions of dollars by paying excessive prices for goods and services due to breaches of Federal laws.”
Frye describes in detail a series of practices that he says run afoul of federal rules, including the widespread use of purchase cards, which are usually meant as a convenience for minor purchases of up to $3,000, to buy billions of dollars worth of medical supplies without contracts. In one example, he says that up to $1.2 billion in prosthetics were bought using purchase cards without contracts during an 18-month period that ended last year.
VA spokeswoman Victoria Dillon said in a statement that some of the care the agency pays for is not covered by federal acquisition law.
On Thursday, Frye is scheduled to testify before the House Veterans’ Affairs Committee about waste and fraud in the purchase card program.
