Runaway Contracts: VA Loses Control of "Open Market" Purchases

February 1, 2012

Washington, D.C. - Democratic Members of the House Committee on Veterans’ Affairs released this statement following today’s Full Committee hearing to review the Department of Veterans Affairs’ Pharmaceutical Prime Vendor (PPV) contract and $1.2 billion in improper drug and pharmaceutical purchases starting in 2004:
“We are here because VA has once again demonstrated an inability to perform at the level expected in managing procurement processes.  VA readily admits that violations took place, and they are quick to assure us that changes have been implemented to fix the deficiencies at hand.  But frankly, I have heard it all before,” stated Congressman Michael H. Michaud, Ranking Democratic Member of the Subcommittee on Health.
Since 2004, the VA has purchased $1.2 billion in “open market” purchases, a clause allowed in the PPV contract to be used in accordance with all applicable procurement law and regulation.  However, the VA testified that they did not follow all applicable guidelines for these transactions nor detected the problems with the PPV open market clause “in part because the process that was in place since 2004 had become routine.”
Full Committee Ranking Democratic Member Bob Filner (D-CA) concluded that, “There is a saying that ignorance of the law is no excuse.  In moving forward, the VA should provide us with who is going to be held accountable for the abject failure to follow policies and procedures, how this is going to be fixed, and how these changes will ensure that the care we provide to our Nation’s veterans is properly managed at all levels.”
Following the hearing, the Committee voted to subpoena documents from VA related to the VA open market purchases.