Lack of Oversight in The VA Led To Mass Fraud

Over the last 5 years, 110 people have been arrested as a result of 254 VA-led criminal investigations focusing on fraudulent contracts. The investigations revealed what amounted to favoritism and kickbacks granted to regional and local vendors. Many of these crimes could have been detected at a much earlier stage or even prevented had the VA included more accountability and oversight in their acquisition plan.

The VA is completely devoid of any centralized purchase tracking database. This means there is no way for the VA to have any idea about:

  • What they bought;
  • Who sold it to them;
  • How much the VA paid;
  • If the products were even received; and
  • If the prices were reasonable.

The database the VA currently maintains only tracks purchases worth more than $25,000. One investigation found only 17% of required procurements were actually logged into the database and any procurement made for the VA by a 3rd party are not reported to the database anyway, making them non-existent for auditing purposes. The VA’s lack of oversight is the bases for the criminal investigations regarding procurement fraud over the last 5 years.

The VA also awarded contracts to firms not eligible for contracts with the VA. For example, there are a certain amount of contracts to be awarded only to service-disable veteran-owned businesses. Because of the lack of oversight, contracts like these were being awarded to firms not owned by service-disabled veterans. A recent case study revealed 10 firms received $100 million in contracts that were supposed to go to service-disabled veterans. The firms awarded the contracts were not even eligible to receive them at the time.

In an effort to rectify these issues, the Department of Veterans Affairs Acquisition Improvement Act was introduced. Should this Act pass, it would create a modernized and effective acquisition plan for the entire VA.