Review of VA's Separately Priced Item Purchases for Training Conferences

VA reported spending approximately $15.5 million on three financial management training conferences in 2010 and 2011, using an Interagency Agreement (IA) with the Office of Personnel Management (OPM). Of the $15.5 million VA reported spending on these conferences, about $6.7 million was spent on Separately Priced Item (SPI) purchases and related service fees. OIG conducted this review to assess VA’s oversight of SPI purchases. Our review of three conferences found VA paid about $5.3 million of $6.7 million for goods and services the prime vendor should not have purchased as SPIs. Instead, VA and OPM should have identified essential goods and services and required the prime vendor to deliver them as firm fixed price tasks rather than as SPIs. VA and OPM did not approve all SPI purchases in advance, and VA paid the prime vendor for SPIs and service fees without adequate supporting documentation. VA paid the prime vendor about $697,000 in inappropriate service fees. Additionally, VA paid OPM about $132,000 in service fees associated with inappropriate SPI purchases. VA placed its trust and reliance on OPM to manage and administer the IA without establishing adequate oversight. This resulted in VA relinquishing its responsibility and accountability to sufficiently monitor and review conference related expenditures. We questioned about $1.1 million in SPI purchases that could have been saved through competitive contracting. We also questioned $697,000 in prohibited service fees paid to the prime vendor and $132,000 in service fees paid to OPM associated with inadequate oversight. We recommended the Assistant Secretary for Human Resources and Administration consider discontinuing the use of assisted acquisition IAs with OPM for training conferences and establish controls to improve oversight of SPIs purchased through existing assisted acquisition IAs with OPM. We recommended the Principal Executive Director, Office of Acquisition, Logistics, and Construction, update its policy to ensure a qualified individual with appropriate training in contracting is assigned to all IAs and take action to recover service fees paid to the prime vendor and OPM that were inappropriate or associated with inadequate oversight. The Assistant Secretary for Human Resources and Administration and the Principal Executive Director, Office of Acquisition, Logistics, and Construction concurred with our recommendations and provided plans for corrective actions.