Prejudicial Action Found in VA Contract Award

By Walter F. Roche Jr.

Concluding that the U.S. Department of Veterans Affairs made several prejudicial errors, the U.S. Government Accountability Office has sustained the protests of competing firms for contracts valued at up to $6.8 billion.
In a decision issued to interested parties last week, the GAO recommended that the VA reopen bidding for the contract to conduct thousands of medical exams per year on veterans applying for disability payments.
The protest centered on the award of the largest chunk of the $6.8 billion to QTC Medical Services,  a firm once headed by former VA Secretary Anthony Principi. The company was sold to Lockheed Martin, but Principi now serves as a lobbyist for the firm.
In a summary of its decision GAO said, "VA made several prejudicial errors in evaluating the proposals for these contracts."
In addition the  GAO found that "the VA misled two of the protesters during the conduct of discussions or negotiations. These errors led the VA to make source selection decisions that GAO found were unreasonable because they were based on erroneous conclusions in support of the contracts awarded."
 Among those protesting the awards were Veterans Evaluation Services of Houston, Tex., Logistics Health of La Crosse, Wisc. and Medical Support Los Angeles of Pasadena, Calif.
The decision was issued under a protective order because the  full decision contains confidential proprietary information, according to a GAO announcement.
The actual ruling will be issued later after the confidential information is redacted, according to the July 13 notice.
Principi, who left QTC to become VA Secretary only to return to the company later, said in response to questions that he was not involved in QTC's bid effort. He said he was not a founder of QTC but joined the company after its founding by Dr. Lay Kay. The sale to Lockheed Martin occurred in 2011

 "I never read any of the (bid) documents," he wrote in response to questions. 

 "I’m confident that the process will lead to a result that serves the best interests of veterans.  The integrity of the government’s procurement process should be above reproach and free of outside influences," he added, when asked to comment on the GAO action.

Congressional lobbying records show Principi's firm, The Principi Group, registered as the lobbyist for Lockheed Martin in 2014.
 "Determine the benefits and medical affairs requirements of the Department of Veterans Affairs," the lobbying firm listed as its assignment.

The GAO action comes as several members of Congress questioned the award. In addition the U.S. House Veterans Affairs Committee has initiated an investigation of the way QTC conducted exams of veterans claiming injuries from exposure to Agent Orange. 

The inquiry came in response to charges in a court suit by a former QTC employee that the exams of veterans claiming exposure were rushed and not properly completed. QTC performed the exams under a prior contract.

The whistleblower suit filed by David Vatan was dismissed on a technicality, but an appeal is pending.
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Former VA Secretary Lobbies for Closely Tied VA Contractor

By Walter F. Roche Jr.

A company founded by a former U.S. Veterans Affairs Secretary has won a major share of contracts worth more than $6 billion, even as that same firm is being investigated for charges that it wrongly denied some veterans of medical benefits.
Winning the major share of the recently awarded contract was QTC Medical, now a subsidiary of Lockheed Martin, but founded by former VA Secretary Anthony J.  Principi. Since selling his company in 2011, Principi's lobbying firm has taken on Lockheed as a client, specifically to deal with the VA and its need for medical exams.
The contract awarded to QTC of Diamond Bar, Calif. in late March is under challenge with multiple protests filed with the the U.S. Government Accountability Office.
VA spokesman Henry Huntley said that because of the protests the new contract would be put on a 100 day hold. That hold, however, means that QTC will continue providing medical exams under its old contract.
Congressional lobbying records show Principi's firm, The Principi Group, registered as the lobbyist for Lockheed Martin in 2014.
The firm listed its assignment as: "Determine the benefits and medical affairs requirement of the Department of Veterans Affairs."
In an email response to questions about his lobbying efforts and the recent bids, Principi wrote, "I have not lobbied for QTC on its rebid nor do I have any knowledge or information on any of your other questions."
Even as the bid was being awarded and protests filed, a U.S. House committee  has launched its own probe into allegations that QTC routinely denied benefits to veterans suffering from the aftereffects of exposure to Agent Orange.
A spokesman for U.S. Rep. Jeff Miller, a Florida Republican, said that an investigation is underway into allegations that QTC under an existing VA contract failed to properly evaluate claims by veterans claiming disabilities from exposure to Agent Orange.
Citing a whistleblower lawsuit filed by a former QTC employee, Miller said, "This lawsuit raises a number of serious questions. That's why our committee has launched an investigation into this matter."
The suit filed by former QTC employee David Vatan was dismissed on a technicality when Vatan was unable to prove he knew the exact language of the QTC contact and, thus, could not cite specific provisions.
The suit charged that QTC required its employees to process so many claims for Agent Orange injuries in such a short time, it was impossible for them to complete a thorough examination.
Lawyers for QTC denied the allegations.
Under the new contract, which is under challenge, physical exams of thousands of applicants for VA disability benefits will be performed by QTC personnel.
It was in late March when the VA announced that it had awarded a dozen contracts for disability exams to QTC and two other firms, VetFed Resources and Veterans Evaluation Services. According to the announcement, the contracts include four one year renewal options pushing the total potential value to $6.8 billion.
In seeking bids for the contracts, the VA disclosed that it intended to have the contractors compete against each other, with the firm with superior performance getting a greater share of the examinations.
One of the firms, however, VetFed Resources, states on its website that it  is a partner of QTC's and has relied on the California firm to fulfill its requirements under an existing contract.
 "In partnership with QTC, VetFed locates, subcontracts, and trains a wide range of General Medicine and Specialty medical professionals in performing medical disability examinations for Veterans and separating service members within the Western Region (San Diego and Los Angeles Regional Offices), " VetFed states on its website.
Meanwhile QTC has also come under scrutiny for lengthy delays in completing disability exams and evaluations. Under its existing contract QTC has been completing exams withing 38 days, but under the new contract a 20 day turnaround is required.
QTC's performance has been the subject of critical testimony before Congressional panels.
Yet in announcing the bid awards, Acting VA Under Secretary for Benefits Tom Murphy stated, "The goal will be to reduce veteran's wait times for examination as much as possible thereby providing faster claims decisions and enhancing veterans' experiences in a positive way."
QTC also has been the subject of critical audits by the VA's Office of Inspector General. A 2008 report concluded that QTC had overcharged the VA by $6 million.

Scranton Veterans Home Cited, Fined

By Walter F. Roche Jr.

A state run nursing home for veterans, with a history of rules violations, has been cited by the state Health Department and fined $11,375 after a patient was injured at the hands of an employee who  then tried to cover up the incident.
The attempted cover up was one of several violations cited in a 43-page inspection report on the Gino J. Merli Veterans Center in Scranton recently made public. When the facility was inspected in September, it  was already operating under a provisional license due to prior violations.
Other violations turned up in the two day inspection include failure to ensure that a patient did not develop bed sores and failure to properly investigate and report multiple thefts from residents.
Joan Nissley, spokeswoman for the state Department of Military and Veterans Affairs said that all the deficiencies have since been corrected and state health officials, on a return visit, agreed. She also said a new commandant has been named to oversee the facility operations.
"As we work through this transition, we continue to closely monitor the situation at Gino Merli to ensure that we are providing Pennsylvania veterans and their spouses with long-term services in a safe secure and caring environment," Nissley wrote in response to questions.

 According to the report, a patient suffering from Multiple Sclerosis and "totally dependent" on at least two aides to get in or out of bed, was injured while a single attendant tried to return him to bed.
Though records indicate a lift was required to move the patient, the attendant attempted to lift him by hand.
The patient's leg was gashed on the bed frame, the report states, and the patient had to be brought to an emergency room for eight stitches to close the wound.
Initially a second aide told facility officials that she had assisted in the transfer. Later, however, after the patient was interviewed a second time, the female aide admitted she was not on hand and had lied to cover for her colleague.
"The resident firmly stated only one male nurse aide was present during the incident on April 23," the report states.
 Nissley said the two employees had been terminated.
In a plan of correction filed with the state, Merli officials said they would establish a monitoring system to ensure that patients were transferred in and out of beds according to the physicians' orders.
The inspectors also found discrepancies in the records for another patient who was discovered to have "newly hatched larvae" in a wound on the left ankle.
Though the larvae and wound on the ankle were noted on Sept. 3, the records showed that it wasn't until Sept. 8 that another entry was made showing the requested treatment had been provided five days earlier.
The inspectors said that the director of nursing "failed to provide an explanation" for the discrepancy.
Nissley said that health officials later found that the proper treatment was implemented and the patient has since recovered.
The review of records showed two cases in which residents who were free of pressure sores on admission developed sores while under the center's care.
One of those patients, who was diagnosed with dementia, developed a pressure sore on his abdomen, apparently from a hand splint. The inspectors concluded that the failure to monitor the patient resulted in "actual harm."
"It is the goal of the facility," the report states, "that residents will not develop bed sores."
The center's plan of correction calls for re-education programs for staffers on the avoidance and treatment of bed sores
 The repeated thefts at the facility, inspectors found, occurred over a five month period. Though there were 11 thefts during that period, only four were reported to the state as required.
Citing a meeting with residents, the report states there were "continued and repeated complaints of misappropriation of resident monies within the facility."
The money went missing, the report states, even though many of the residents said they kept their cash in locked boxes.
In its corrective action plan, the facility said the patient who registered the initial complaint was reimbursed for the $15 that was taken. Staff also will be re-educated on the proper procedure for handling theft complaints.
In yet another citation, the inspectors found two patients were not getting prescribed devices or medications. A resident with diabetes, the records showed, was not given insulin as prescribed by the treating physician.
Also noted were unsanitary conditions including a hallway permeated "with a strong urine-like odor."
Contact: wfrochejr999@gmail.com

VA PR Czar Got Last Minute Job Boost

By Walter F. Roche Jr.

As one of his last official acts in late 2013, the embattled outgoing Pittsburgh area director of the Department of Veterans Affairs issued a one-page order creating a new job and title for his public affairs chief.
The Oct. 17, 2013 memo from Michael E. Moreland created the full time job of communications director for VISN 4 and named David E. Cowgill to fill that post effective Oct. 20. Cowgill's current annual salary is $124,003.
Though VA officials said Cowgill's salary in his new job is the same pay grade as his old one, federal records show that he earned $118,273 in 2012, $5,730 lower than his current level. Cowgill issued a statement in which he said he had previously served as VISN 4 communications manager on a part-time basis.
In addition recently released records show Cowgill was one of dozens of Pittsburgh area VA employees to be awarded a performance bonus in 2014. Cowgill got $2,750 in bonus payments, records show.
"Leadership made a determination that a full time VISN 4 communications manager was needed and I no longer had the time to perform the dual role of serving as VA Pittsburgh public relations manager," Cowgill wrote in an email response to questions.
He said his pay grade remained the same in the new job "and I did not receive any pay increase or extra compensation for being appointed to the full time communications manager."
Moreland's action creating the full time post came just two weeks after he announced he was stepping down as VISN 4 director and retiring as of Nov. 1. His resignation came amid a congressional investigation into the deaths of six veterans at VISN 4 facilities in a Legionella outbreak.
"I have determined that the duties of a Public Affairs Officer are needed on the full-time basis within the network office," Moreland wrote.
"Although this new position has been established, I expect VAPHS will maintain sufficient staffing to continue to support the Network's public affairs efforts," the Moreland memo continues.
Moreland did not respond to requests for comment.
Though VA officials say Cowgill has no staff, internal memos show he has commandeered the services of many of VA public affairs staffers with a combined annual salary of more than $1 million. That figure include's Cowgill's replacement with a current salary of $110,607.
Cowgill has, through a series of internal directives asserted control of staffers who reported to him in his prior position.
In a March 24, 2014 to the VA's Pittsburgh Health Services public relations manager, Cowgill wrote that the Pittsburgh office "will be required to provide appropriate levels of staffing" to complete a series of functions for his office including the production of VISN's annual report, maintaining the VISN's websites and "VISN 4's public relations and outreach campaigns."
In an April 8 memo to VA's regional mangers, Cowgill requested " Nulph serve as his liaison.
"Ms. Nulph must be provided with the ability to work directly with the VISN 4 Communications Manager and have her Pittsburgh tasks adjusted as required by network priorities," Cowgill's memo states.
Nulph, whose job title is public affairs specialist, has an annual salary of $65,665.
In response to questions, VA spokesman Henry Huntley wrote that Cowgill  "utilizes the services of some VA Pittsburgh Healthcare Systems public affairs department to include occasional web design, photography, videography, video conferencing support and assistance from one public affairs specialist."
Cowgill, in his email, wrote that VA Pittsburgh had been providing support to VISN 4 since 2007.
Data provided by the VA shows that there are 16 persons assigned public affairs duties in the VA Pittsburgh Health Services office. Salaries range from $64,138 to the $110,607 being paid to Cowgill's replacement.
Michael Stelacio, department commander of the Pennsylvania American Legion, said both Moreland and Cowgill should be investigated.
"Mr. Cowgill should have to give an explanation of how he can order everyone around when he has no staff, Stelacio said, adding that Moreland should have to explain why he created Cowgill's job.
Asked about the salaries of the VA's local public relations staff, Stelaccio said that while it seems excessive, the staff has to answer a lot of quesions, particularly during the Legionella outbreak.

Pittsburgh Area VA Employees Shared in 2014 Bonuses

By Walter F. Roche Jr.

A communications manager and a top administrator were among 1,285 Pittsburgh area employees of the Veterans Administration to share in 2014 bonuses of $142 million.
The bonuses to Pittsburgh area VA employees, which were paid in the midst of multiple congressional inquiries into charges that veterans were facing extensive delays in getting needed care, ranged from $11,527 to a low of $145.
In Pittsburgh inquiries focused on deaths caused by a Legionella outbreak.
The nationwide listing was made public in a report from USA Today in the newspaper's Wednesday edition.
The $11,527 bonus went to Anthony Warner, a contract specialist. The $145 payment went to Terry Weightman, a computer specialist.
David E. Cowgill, communications manager for the regional VA service area was paid a $2,750 bonus. His regular salary is $124,003.
Carla Sivek, a top administrator who recently served as the acting regional director, got a $3,250 bonus.
Here is a partial listing of Pittsburgh area bonuses:

Anthony Warner, contract specialist, $11,527
Jennifer Stone-Barash. director, $7,408
Bernadette Heron, pharmacy $4,900
Lisa Longo, pharmacy $4,900
Rosemary Grelish, pharmacy, $4,900
John C. Lowe, pharmacy, $4,900
James F. Baker, finance $3,259
Barbara Forsha, health systems specialist, $3,250
Moira Hughes, health systems specialist, $3,250
Carla Sivek, administrator,$3,250
Joyce Johnson, engineering, $2,820
Charlotte Balou, budget analyst, $2,750
Barbara Becker, program managment, $2,750
Kimberly Butler, health system analyst, $2,750
Teneal Caw, human resources, $2,750
David Cowgill, public affairs, $2,750
William J. Cress, social worker, $2,750
Michelle Dominski, human resources, $2,750
Jennifer Farrar, auditor, $2,750
Douglas Hilliard, prosthetics, $2,750
Debra Hughes, health systems specialist, $2,750
Angela Keen, psychologist,$2,750
Anne Mikolajczak, health systems specialist $2,750

VA Vows to Keep New Inventory Supply System

By Walter F. Roche Jr.

Officials of the U.S. Department of Veterans Affairs say they have no plans to abandon a controversial new inventory control system at its health facilities despite complaints from its own employees.
VA spokesman Henry L. Huntley said in an email response to questions that implementation of the Shipcom Wireless system is not being halted. 
"The Point-of-Use program office is not considering abandoning the VHA Point-of-Use inventory site in any live site or discontinuing the program," Huntley wrote, adding that it is now in use in 17 locations, including Pittsburgh.
The announcement marks a reversal for Pittsburgh area VA employees who had earlier been told that the controversial new system would be put on hold, at least temporarily. They were told Friday that the Shipcom system would be in use starting this week.
Huntley did acknowledge that the program called Catamaran was on an "administrative pause" at some locations.
The comments follow the disclosure of an internal e-mail from an inventory control official in Pittsburgh in which he acknowledged widespread complaints about the new system and told workers that an old inventory system would be put in place, at least temporarily.
In his email last week, inventory chief Vincent Scalamogna wrote, "Leadership has heard your concerns."
He added that plans were being developed to revert to the old system.
Huntley, however, said the email "was from him (Scalamogna) directly to his staff regarding only his facility. Local facility chief logistics officers do not have the authority to halt the national implementation."
The VA spokesman also denied that the implementation of Catamaran has led to any shortages of needed medical supplies.
"Logistics staff is able to stock consumable medical supplies in the point-of-use locations as required. No serious supply issues have been encountered as a result of the implementation or use of the system," Huntley wrote, adding that there were no indications that patient care had been jeopardized.
The Shipcom contract could bring revenues of up to $275 million to the Houston-based company.
Contact Walter F. Roche Jr at wfrochejr999@gmail.com.

Use of VA Inventory/Supply System Scrapped at Least Temporarily

By Walter F. Roche Jr.

A controversial multimillion dollar inventory supply and control system at Pittsburgh area Veterans Affairs facilities is being put aside, at least temporarily, following multiple complaints including warnings that veterans health care could be jeopardized.
The suspension of the Shipcom Wireless system was disclosed to Pittsburgh area VA employees last week and it followed a series of meetings in which workers detailed continuing problems with the system put in place by the Texas based firm.
In an email to employees Thursday, Vincent Scalamogna, an inventory control chief, said plans were being developed to convert back to the old inventory system.
"Leadership has heard your concerns," the email states.
VA officials in Pittsburgh and Washington, D.C. did not respond to requests for comment. Nor did officials of Shipcom.
The contract, which is being implemented at several other VA facilities across the country, drew attention in Pittsburgh when former VISN 4 Director Michael Moreland surfaced as an advisor to Shipcom.
Under the contract Shipcom could ultimately earn some $275 million in payments.
Moreland had resigned from the director's job amid growing criticism of the handling of a legionella outbreak in local facilities that resulted in six known deaths.
Subsequently VA officials barred Moreland's further involvement due to his prior role as the regional director.
Criticism of the Shipcom system and its use of a computer program began nearly as soon as implementation began.
Employees reported long delays in obtaining needed medical supplies and warned that patient care could be affected. At one point recently, no supply requests could be made because the computer system crashed.
Workers reported that they were forced to get some needed supplies from other area non- VA hospitals.
Returning to the old in-house inventory system, however, may pose additional problems. Dozens of supply bins used under the old system have been scrapped.
In his email Scalamogna told employees that meeting already had been scheduled to plan the conversion to the old system.
"After this meeting we will hold meetings with impacted Logistics team members to review, modify and finalize the conversion plan," the email states. "Once our plan is fianlized, I will present it to leadership and seek approval to begin the conversion."
He wrote that the old system would be used until Shipcom and VA officials in Washington could "sort out" the problems with the new computer system called Catamaran.
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