GAO Details VA Bidding Issues

By Walter F. Roche Jr.

The U.S. Government Accountability Office says the Veterans Administration used unreasonable standards in evaluating the price of medical exams submitted for a contract worth up to $6.8 billion over five years.
In a 23-page decision finally issued today, the audit agency also found that the VA gave one firm more credit than it should have in evaluating its anticipated performance in performing medical exams on veterans seeking disability benefits.
That company, VetFed Services, partnered with another winning bidder, QTC Medical, for most regions of the country, but was going it alone in the district in question.
"We conclude that its assignment of a good rating to VetFed for its past performance in District 2 (Kentucky, Tennessee, Alabama, Georgia, South Carolina and Florida)was unreasonable," the GAO decision states.
As the decision noted VetFed has partnered in the past with QTC by utilizing its staff and computer capabilities.
A shortened version of the decision had been issued earlier in the week, but the final document was delayed while the GAO redacted so-called proprietary information. VA officials have indicated that while they do not plan to rebid the pact, they will address the issues raised by the GAO.
The GAO had recommended in its decision that the VA reopen negotiations with the offerors and solicit and evaluate revised proposals and then make new source selection decisions.
Two bidders, including Veterans Evaluation Services, filed protests of the contract awards after they were announced in the Spring. The awards are for one year with options for four annual renewals.
As for the price evaluation, the GAO found that the VA shifted the way it compared bids without telling the bidders about the changes.
"We agree with the protesters that the agency's evaluation of total prices was unreasonable," GAO General Counsel Susan A. Poling wrote in the decision.
She found that bidders were not provided with the required information to shape their bids.
"The agency (VA) essentially changed the evaluation criteria they used to measure price reasonableness," the decision states.
While sustaining some of the protests, the GAO found several other claims without merit, including the impending sale of QTC to a third party.
QTC, based in Diamond Bar, Calif. was once headed by former VA Secretary Anthony Principi, who now is a registered lobbyist for QTC's parent company, Lockheed Martin. The GAO said that the possible sale of QTC was not relevant.
Principi has stated he was not involved in the bidding effort.
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