Congress has raised questions about whether VA’s latest attempt to build a system wide supply chain management program has failed. This photo shows a supply aide. Photo from Dec. 1, 2020, VAntage Point blog
CHICAGO — VA’s new inventory management system being piloted at the James A. Lovell Federal Health Care Center in Chicago is failing to meet many of the facility’s needs, according to agency overseers.
The early November report from the VA Office of the Inspector General (OIG), combined with a recent court decision regarding VA’s adoption of a new prime vendor program, have legislators questioning whether VA’s latest attempt to build a systemwide supply chain management program is dead in the water.
This attempt involves two major transitions for the department. The first is the adoption of the Defense Medical Logistics Standard Support (DMLSS) inventory management system, which serves as the primary system supporting the Defense Logistics Agency (DLA) Medical Surgical Primary Vendor (MSPV) program—the supply chain management system used by DoD. The second is the transition to DLA-MSPV itself. This would involve VA abandoning its current MSPV 2.0 program, as well as its current vendors, in favor of DoD’s contracting system.
In August 2020, DMLSS went live as a pilot project at Lovell, which was chosen because of its unique nature as a joint VA and DoD healthcare facility.
OIG investigators found that DMLSS failed to meet more than 40% of VA’s high-priority business requirements at Lovell and that staff was forced to adopt workarounds to maintain day-to-day operations. For example, DMLSS failed to interface with VA’s corporate data warehouse, requiring staff to manually extract information to send to national program offices for critical decision-making.
“The interface with the corporate data warehouse is also essential for VHA’s ability to monitor and manage biomedical equipment, facility performance, and tracking recalls,” the report notes. This kind of real-time monitoring became even more necessary during the pandemic when VA was required to track its supply of ventilators system wide.
DMLSS also failed to track preventative maintenance requests for 3,000 medical equipment items, making close monitoring difficult and increasing the risk of equipment malfunctions and failures.
At a hearing of the House VA Technology Subcommittee last month, Deputy Assistant Inspector General Leigh Ann Searight described the resulting workaround methods as “the swivel chair approach.”
“I have information in DMLSS. I have information in legacy systems. But they don’t talk to each other,” explained Searight. “So I have to take information out of one system and put it into another. This creates additional work, additional time and a lot of opportunities for error. … And the intent behind DMLLS is to have an enterprise solution. And if they don’t talk to each other as a system, you’ve negated that intent.”
The OIG report also found that the VA Logistics Redesign (VALOR) program office tasked with overseeing the rollout had a “slow and unsteady start.” Created in early 2019 to manage the DMLSS deployment, it did not receive funding until January 2020. VALOR has also had six program managers in the last two years, and only in March 2021 did it officially appoint an executive director.
While VA was struggling to get DMLSS functional at Lovell, the department announced in March 2021 that it would be seeking to eliminate its Medical Surgical Prime Vendor (MSVP) 2.0 program in favor of the DLA-MSVP program by 2023. VA had been discussing such a move for years, but the sudden decision, and the expedited timeline, surprised vendors.
Initiative Halted
Medline Industries Inc., one of VA’s prime vendor awardees, filed a bid protest with the U.S. Court of Federal Claims. In August 2021, the court ruled that VA’s transition to DLA-MSVP conflicted with federal law regarding VA procurement rules, putting a halt to the initiative.
VA officials testified last month that the department began an enterprisewide analysis of its supply chain management operations in September and hopes to come away with a comprehensive supply chain strategy, along with metrics and measurements to judge its efforts going forward.
VA overseers wondered why the department didn’t undertake this analysis sooner, with OIG as well as the Government Accountability Office (GAO) noting in multiple reports in recent years that a strategic plan, as well as methods to evaluate the department’s efforts, were critical for VA to achieve success.
“VA has struggled to chart a clear, strategic direction for its medical supplies program,” Shelby Oakley, GAO’s director of contracting and national security acquisitions told legislators. “The recent court hearing exemplifies the consequence of VA’s habit of putting actions ahead of strategy.”
GAO added VA’s acquisition management to its high risk list in 2019, noting challenges that plague many of VA’s programs, leadership instability and inadequate training among them.
“Now our ongoing work is focusing on [whether] they even have a framework for conducting these programs, making sure they’re set up with a good business case,” Oakley said. “Without doing that, decisions are often ill-supported, and no one is held accountable for outcomes.”
One of those decisions now being questioned by legislators is the move to adopt DMLSS in the first place and whether VA should stick with its plans to expand the program beyond the pilot at Lovell.
“Some of the key factors that went into VA’s decision to adopt DMLSS are now in question,” Oakley said. “In particular, whether it can actually use the DLA-MSVP program or not. And that was one of the driving factors going down the DMLSS path. VA’s own documentation didn’t even point towards DMLSS as the best solution, but that was the path taken.”
Legislators tried to get VA officials to say, one way or the other, whether they were willing to abandon DMLSS.
Michael Parrish, VA’s principal executive director of the Office of Acquisition, Logistics, and Construction, said that the decision would be made following the department’s ongoing analysis.
“I’m not going to say we’re not committed to it, because right now it’s our primary effort, but we are reevaluating to make sure it is still valid for us to continue forward,” Parrish said.
Legislators made it clear that, if the functionality of DMLSS does not improve at Lovell, VA should look at other systems. Oversight officials seemed to concur.
“VA has an opportunity through this supply chain assessment to step back and examine whether DMLSS remains its preferred solution,” Oakley declared. “Is the business case there to put forth that DMLSS can meet the requirements of each of its facilities? Does the material solution meet the requirement? … Clearly through the IG’s work on DMLSS, that was not the case.”
