A Summary of OIG Preaward Contract Reports Issued in Fiscal Year 2023 on VA Federal Supply Schedule Pharmaceutical Proposals

The federal government spends billions of dollars annually on pharmaceutical items through VA’s Federal Supply Schedule (FSS) program. The OIG examines and reports on pharmaceutical proposals submitted to the VA National Acquisition Center for FSS contracts that have an anticipated annual value expected to exceed $5 million. The oversight reports help VA contracting officers negotiate fair and reasonable prices for the government but are not published due to sensitive commercial information that is protected from release under federal law.

To promote transparency, this review summarizes the 17 nonpublic oversight reports the OIG completed in fiscal year 2023 regarding pharmaceutical FSS proposals. The 17 proposals had a cumulative 10-year estimated contract value of approximately $19.5 billion. Contract negotiations for 16 of the 17 pharmaceutical proposals had been completed as of the date of this report. Collectively, the OIG recommended $120.6 million in contract savings over the life of the contracts.

In reviewing each pharmaceutical proposal, the OIG provided an opinion as to whether the proposal and commercial disclosures were accurate, complete, and current; made recommendations for pricing based on the vendor’s commercial selling practices; and evaluated and suggested alternative tracking customers, which are customers that serve as a benchmark for potential price reductions during the life of the contract. If tracking customers receive a price reduction, the government’s price should also be reduced.

The OIG’s findings and recommendations in preaward reports issued in FY 2023 helped VA contracting officers reduce the cost of pharmaceutical items. Contracting officers obtained and saved taxpayers approximately $351,669 over the 10-year life of the awarded contracts.