Audit of VISN Procurement Practices for FSS Professional and Allied Healthcare Staffing Services

Our audit evaluated VISN procurements of FSS healthcare staffing services to ensure contracting officers performed adequate price reviews and analysis and complied with Federal Acquisition Regulation (FAR) ordering procedures and competition requirements. We found contracting officers had not adequately reviewed order prices and ensured compliance with FAR ordering and competition requirements during the period, April 1, 2007 March 31, 2008. VISN contracting officers did not ensure adequate competition, maximize use of the FSS instead of local contracts, or maintain required contract documentation. Based on our audit results and statistical projections, we projected that medical facilities overpaid FSS vendors about $5.8 million for labor and $1.8 million for travel expenses. Consequently, VHA could reduce its FSS healthcare staffing services costs by about $7.7 million annually or $38.5 million over the next 5 years if it strengthened its price evaluation and ordering practices and met competition requirements. In addition, the Procurement and Logistics Office (PLO) lacked an effective oversight process for healthcare staffing services procurements. Further, PLO had not worked effectively with the National Acquisition Center to implement adequate FSS procurement policies, procedures, and training. The lack of guidance along with inadequate FSS procurement training made FSS healthcare staffing services orders more vulnerable to improper payments, higher prices, and FAR deficiencies. The Under Secretary for Health agreed with the findings and recommendations. We consider the planned actions acceptable and will follow up on implementation.