GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 

United States Government Accountability Office

Washington, DC 20548 

April 23, 2007 

The Honorable Stephanie Herseth 

Chairwoman 

The Honorable John Boozman 

Ranking Minority Member 

Subcommittee on Economic Opportunity 

Committee on Veterans’ Affairs 

House of Representatives 

Subject: VA Vocational Rehabilitation and Employment: Service Contract 

Management Is Improving, but Challenges Remain 

The Department of Veterans Affairs’ (VA) Vocational Rehabilitation and Employment 

(VR&E) program provides services such as vocational counseling and job training to 

assist veterans with service-connected disabilities obtain and maintain suitable 

employment and achieve maximum independence in daily living. In fiscal year 2006, 

the VR&E program obligated about $702 million and served about 89,000 veterans. 

The Veterans Benefits Administration (VBA), which administers the VR&E program, 

provides some services to veterans through two types of contracts—national 

contracts and local contracts. In fiscal year 2003, VA adopted the National Acquisition 

Strategy (NAS) to award contracts at the national level to ensure that veterans have 

access to the same quality and types of VR&E services across regional offices. These 

national contracts, once awarded, are implemented by VA’s regional offices. Services 

available under these national contracts include initial evaluations, case management, 

and employment placement assistance. In fiscal year 2006, VR&E spent about 

$15 million through national contracts. There are 165 national contracts currently 

active in fiscal year 2007. Regional offices also can negotiate and implement local 

contracts for services that are not provided through national contracts such as 

tutoring and computer skills evaluations. In fiscal year 2006, VR&E spent about 

$12 million through local contracts. VR&E contracting officers are responsible for 

negotiating the terms of local contracts. Contracting officer’s technical 

representatives, often VR&E counselors themselves, assist in managing both national 

and local contracts. 

Recent studies of the VR&E program have raised concerns about its contracting 

practices. In March 2004, the VR&E Task Force recommended that VA enhance 

VR&E contracting practices by taking several actions, including revising the scope of 

national contracts and developing contracting training and hiring contracting 

specialists to improve the contracting expertise of VR&E staff. According to the 

VR&E Task Force, VR&E’s capacity to manage its contracts could be further 
improved by enhancing the usefulness of its case management data system. For 

example, the VR&E Task Force recommended that VA improve its case management 

data system so that purchased contract services could be tracked by the counselor 

who orders the services or by the veteran that receives the services. In February 

2005, the VA Inspector General recommended that existing national contracts be 

renegotiated to better reflect market rates for services because VA was at risk of 

paying excessive prices for VR&E services purchased through its current national 

contracts. The report also noted that VA should strengthen regional office oversight 

and management of contracts. 

To address your interest in VR&E contract management, we conducted a study to 

determine how VA has improved VR&E contract management practices and identify 

challenges VA continues to face. Specifically, you asked us to answer the following 

questions: (1) What progress has VA made in implementing selected 

recommendations on contracting for VR&E services made by the VR&E Task Force 

and the VA Inspector General? (2) What are VA’s key challenges in improving its 

management of VR&E service contracting? 

On March 29, 2007, we briefed your staff on the results of our study of VR&E service 

contract management (see app. I). This report formally conveys the information 

provided during that briefing. In summary, we found that: 

• VA reports progress in implementing contracting-related recommendations made 

by the VR&E Task Force and VA Inspector General. However, some key 

recommendations have not yet been implemented. Specifically: 

o VA regional offices requested and obtained lower prices under existing 

national contracts. 

o VA has taken steps to increase regional office VR&E staff contracting 

expertise. 

o VA has taken steps to develop additional regional office internal control 

policies and procedures for contracting activities. 

o VA’s efforts to address issues with contracting data are on hold. 

o VA has not yet awarded new national contracts. 

• Key challenges remain to improving VA’s management of VR&E service 

contracting. Specifically, we found that: 

o Regional offices are not fully applying VA’s contracting guidance. 

o Current training does not adequately prepare contracting officers to 

manage contracts. 

o Regional offices report delays in communication with VA headquarters on 

contracting questions, but VA is taking actions to address these concerns. 

o VA’s management of VR&E contracting is limited by inadequate reporting 

capabilities. 

o Inadequate internal controls over contracting data raise reliability 

concerns. 

Page 2 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
To assess VA’s progress in implementing contracting-related recommendations made 

by the VR&E Task Force and the VA Inspector General and identify the challenges VA 

has experienced in improving management of VR&E service contracting, we 

(1) conducted site visits of four diverse regional offices to interview VR&E officials 

and review contract files, (2) conducted telephone interviews with officials from a 

fifth regional office, (3) interviewed officials at VA headquarters knowledgeable 

about contracting practices and policies, (4) analyzed VR&E contract-related 

management data, and (5) reviewed contract files at VA’s Office of Acquisition and 

Materiel Management (OA&MM) to determine the maximum prices allowed for 

services available from national contracts used by the regional offices we visited. We 

assessed the reliability of VR&E contracting data captured by VR&E’s case 

management data system—Corporate WINRS—through several methods, including 

comparing these data against local data provided to us by the four regional offices we 

visited and by reviewing existing evaluations of VR&E’s case management data 

system. While we identified accuracy limitations with the contracting data captured 

by VR&E’s case management data system—discussed in the slide entitled “Objective 

2: Management Data: Inadequate Internal Controls over Contracting Data Raise 

Reliability Concerns” in appendix I (page 30)—we found that generally VR&E’s 

contracting data are sufficiently reliable for the purposes of our study. We conducted 

our work from March 2006 to February 2007 in accordance with generally accepted 

government auditing standards. (See app. II for more details on our objectives, scope, 

and methodology.) 

Conclusions 

Contracting is a valuable tool for the VR&E program. A well-managed contracting 

system can help VA provide VR&E services to veterans in several ways, such as by 

gathering the information needed to make entitlement decisions. Several regional 

offices felt that prices were too high for services available through national contracts 

and subsequently requested and obtained lower prices. VA has positioned itself to be 

at less risk of overpaying this time around, because VA has conducted market 

research in preparation for issuing its new national contracts, something it did not do 

last time. VA’s oversight and communication with regional offices are a work in 

progress, but in the absence of continued improvement, regional offices may be

putting VA at risk for overpaying local contractors. Given their current level of 

training, regional VR&E officials may continue to use noncompetitive contracts even 

when they are not necessarily appropriate. While negotiating competitive contracts 

requires greater contracting expertise, these contracts may also provide better prices 

and outcomes. Gains from improved contract management will be minimized without 

an information system to provide usable and reliable data on contract use. VA plans 

to improve the reporting capabilities of Corporate WINRS, but without improvements 

to internal controls and data reliability, reports produced by the system will not be as 

fully useful as they could be. 

Page 3 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
Recommendations for Executive Action 

To address the key challenges we identified that VA faces in improving its 

management of VR&E contracting, we recommend that the Secretary of Veterans 

Affairs direct the Under Secretary for Benefits to take the following actions: 

(1) Conduct a management review to assess how regional offices are 

implementing VA’s contracting guidance and take necessary actions to make 

needed improvements. For example, VA could clarify to VR&E employees how 

existing VR&E guidance on contract file maintenance applies to local 

contracts. 

(2) Require regional offices to report on the efficacy of contracting training and 

take necessary actions to make needed improvements. For example, VA could 

develop VR&E-specific contracting training. 

(3) Improve VA management of VR&E contracting by improving Corporate WINRS 

reporting capabilities and its internal controls over contracting data. 

Agency Comments 

We provided a draft of this report to the Department of Veterans Affairs for review 

and comment. On March 23, 2007, VA provided written comments agreeing with our 

conclusions (See app. III). However, while VA concurred with our recommendations, 

we have concerns about the actions it reported it will take to respond to two of the 

recommendations. 

In response to our first recommendation, VA said that it will continue to assess 

regional office performance through its site visits to 12 regional offices per year. 

VA also stated that it will reiterate that its file maintenance guidance applies to both 

national and local contracts. While these actions are useful in helping to ensure that 

regional offices are following contracting guidance, in our view they are insufficient. 

We believe that a systematic, one-time review of all regional office practices is 

needed. This review would allow VA to identify the full extent of compliance with 

contracting guidance and determine the needs for additional or clarified guidance. 

VA also said that it will continue to provide specific annual VR&E contract training as 

well as conduct specialized VR&E contract training to VR&E regional office staff 

responsible for managing contracts. However, our second recommendation was for 

VA to require regional offices to report on the efficacy of VA’s training and take 

necessary actions to make needed improvements. We maintain that contracting 

training could benefit from a systematic effort to obtain information from regional 

VR&E staff on the efficacy of existing training. 

In response to our third recommendation, VA said that it will modify the VR&E case 

management system to incorporate additional internal controls and reporting 

capabilities. VA stated that this would be done in an upgrade to Corporate WINRS, 

scheduled for fiscal year 2008. VA reported that the upgrade project is currently in 

VA’s internal project prioritization process. 

Page 4 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
In addition, VA provided technical comments, which are incorporated as appropriate. 

After our briefing of your staff, we made further technical corrections to the slides 

based on the comments we received from VA on a draft of the information 

(concerning price reductions requested and obtained by VA regional offices) we sent 

to you on April 11, 2007. The pricing information was requested by your staff during 

the March briefing. 

We are sending copies of this report to the Secretary of Veterans Affairs, relevant 

congressional committees, and other interested parities and will make copies 

available to others upon request. In addition, this report will be available at no charge 

on GAO’s Web site at www.gao.gov. If you or your staff have any questions about this 

report, please contact me on 202-512-7215 or fantoned@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found on the last 

page of this report. Brett S. Fallavollita (Assistant Director), Greg Whitney (Analystin-Charge), Irene J. Barnett (Senior Analyst), Avrum Ashery, Jessica Botsford, 

Irene Chu, Jennifer Lutzy McDonald, Walter Vance, and Charles Willson also made 

significant contributions to this report. 

Sincerely yours, 

Denise M. Fantone 

Acting Director, Education, Workforce, 

and Income Security Issues 

Page 5 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
Appendix I: Briefing Slides 

1

VA Vocational Rehabilitation and Employment:

Service Contract Management Is Improving, but 

Challenges Remain

Briefing for the Staff of the 

Subcommittee on Economic Opportunity,

Committee on Veterans’ Affairs

House of Representatives

March 29, 2007

Page 6 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
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Objectives

The House Subcommittee on Economic Opportunity, Committee on 

Veterans’ Affairs, asked that we conduct this study. We answered the 

following questions:

1. What progress has the Department of Veterans Affairs (VA) made 

in implementing selected recommendations on contracting for

Vocational Rehabilitation and Employment (VR&E) services made 

by the VR&E Task Force and the VA Inspector General? 

2. What are VA’s key challenges in improving its management of 

VR&E service contracting?

Page 7 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
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Key Findings

• VA Reports Progress in Implementing

Recommendations on VR&E Service Contracting,

but Some Key Recommendations Are Not Yet 

Implemented

• Guidance Application, Training, Communication, and

Management Data Are Key Challenges to Improving 

VA’s Management of VR&E Service Contracting

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To Address Our Research Objectives, We Took 

Several Approaches

• Focused on contracting-related recommendations in the VR&E 

Task Force report (March 2004) and the VA Inspector General 

report on VR&E contracting (February 2005). Specifically, we

focused on recommendations related to

• national contracts—revise scope of and award new contracts;

• human capital issues related to contracting—increase regional 

office contracting expertise,

• regional office internal controls over contracting activities—

improve documentation of contracting actions and controls

over payments to contractors, and

• contracting data—enhance the usability of VR&E’s

management data system for internal control and financial 

management.

Scope and Methodology

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To Address Our Research Objectives, We Took 

Several Approaches (continued)

• Interviewed VA officials on the implementation status of the VR&E Task

Force and VA Inspector General contracting-related recommendations. 

• Analyzed data on contracted services from VR&E’s Corporate WINRS

data system to identify the types of services and the amounts spent on 

contracts.

• Conducted case study reviews of the Boston, Denver, Houston, and St.

Petersburg regional offices, which were selected to provide diversity in

geography, veteran workload, types of contracts, and expenditures. At 

each office, we interviewed VR&E officials, obtained contracting data, and 

reviewed national and local contract files. We also interviewed Waco

regional office VR&E officials because, like Houston, Waco was a pilot for

national contracts.

• Reviewed contract files maintained by VA’s Office of Acquisition and

Materiel Management for the national contracts available to our case

study sites, to calculate the ranges of prices allowed.

Scope and Methodology

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Case Study Sites (Fiscal Year 2006 Data)

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Data Reliability

• We interviewed officials about the completeness and accuracy of 

contracting data and reviewed existing documentation and VA’s

internal evaluation of its data system.

• We compared the Corporate WINRS contracting data we obtained 

from VA headquarters to data we obtained from the four regional 

offices we visited.

• We found the data to be sufficiently reliable for our purposes, with 

some exceptions as discussed under Finding 2.

• Our work was conducted from March 2006 to February 2007 in 

accordance with generally accepted government auditing 

standards.

Scope and Methodology

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VR&E Provides Services to Veterans with Disabilities

• To assist veterans with service-connected disabilities obtain 

suitable employment and achieve maximum independence in daily

living, services such as vocational counseling and job training

services are generally provided by VR&E counselors at VA’s 57 

regional offices.

• Contracts are used when

• The demand for VR&E services exceeds a regional office’s

capacity to provide the services in-house.

• Specific services cannot be provided by VR&E staff.

• Veterans living far from regional office locations cannot be 

reasonably served by regional office VR&E counselors.

Background

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VA Awarded National Service Contracts under a 

National Acquisition Strategy (NAS)

• For fiscal year 2003, VA awarded 241 contracts for VR&E services under a

National Acquisition Strategy. The objective of this strategy was to 

standardize the provision of services and procurement strategies across

VR&E offices. The contracts awarded under the National Acquisition 

Strategy were fixed price, indefinite delivery, indefinite quantity contracts.

• Each contract was awarded for a base year (fiscal year 2003) and four 

1-year options, with fiscal year 2007 being the last option year.

• A total of 165 national contracts remain available to provide services in 

fiscal year 2007. 

• Although negotiated and awarded nationally, each contract only applies to

the particular regional offices for which contractor proposals were accepted

and awarded.

Background

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Contracting Officers in the Regional Offices Can 

Negotiate Local Service Contracts

• Regional office Contracting Officers can negotiate local contracts

when services are not available through a national contract.

• Regional office VR&E Contracting Officers are responsible for 

negotiating the terms of local contracts, including services and

prices. 

• Contracting Officers hold warrants allowing them to negotiate 

contracts for specific amounts (to a maximum of $100,000).

• Contracting Officer’s Technical Representatives, often VR&E

counselors themselves, assist in managing contracts.

Background

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Different Types of Services Are Available through 

National and Local VR&E Contracts

Background

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Background: The Contracting Process

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VA Reports Progress in Implementing Recommendations 

on VR&E Service Contracting, but Some Key

Recommendations Are Not Yet Implemented

Progress has been reported:

• VA regional offices requested and obtained lower prices under

existing national contracts.

• VA has taken steps to increase regional office VR&E staff 

contracting expertise.

• VA has taken steps to develop additional regional office internal

control policies and procedures for contracting activities.

Action remains to be taken:

• VA’s efforts to address issues with contracting data are on hold.

• VA has not yet awarded new national contracts.

Overview of Finding 1

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VR&E Task Force and VA Inspector General 

Recommendations

Objective 1: Status of Recommendations

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VA Regional Offices Requested and Obtained Lower 

Prices under Existing National Contracts

• VA’s Inspector General noted that VA did not conduct market 

research before awarding national contracts in 2002, and was at 

risk of paying excessive prices.

• Officials at the three regional offices we visited that use national 

contracts said that some contractors’ original prices were too 

high, based on previous experience contracting for comparable 

services.

• These offices requested and obtained price reductions for

individual services provided by 8 of their 20 national contracts. 

Reductions under these contracts ranged from less than 5 

percent to 81 percent of the original individual service price. For

example, one regional office obtained a reduction from $395 to

$76 (81 percent) for an individual case management service.

Objective 1: National Contracts Recommendation

Status

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VA Has Taken Steps to Increase Regional Office VR&E

Staff Contracting Expertise

• In an effort to increase contracting expertise, VA’s goal is to have at least two 

Contracting Officers and two Contracting Officer Technical Representatives

(COTR) at each regional office by the end of fiscal year 2007.

• At the end of fiscal year 2006, VA reported having at least one Contracting 

Officer and one COTR at each regional office.

• As of February 2007, VA reported that it has hired VR&E contracting 

specialists for 11 of its 57 regional offices and warranted them as Contracting 

Officers.

• VA’s proposed fiscal year 2008 budget includes a request for increased 

funding to hire more contract specialists.

• VA has established contracting training requirements for regional VR&E staff.

• VA reports tracking the completion of training requirements by regional

office staff in fiscal year 2007.

Objective 1: Human Capital Recommendation Status

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VA Has Taken Steps to Develop Additional Regional 

Office Internal Control Policies and Procedures for 

Contracting Activities

• In September 2005, VA issued guidance on documentation that must be 

maintained in contract files. For example, when a regional office uses a

higher-priced contractor over others providing the same service, it must

document its reasons, which may include better contractor performance or 

greater capacity to provide services in a timely manner. 

• VA officials told us that, as part of VA’s periodic quality assurance reviews,

they now track how contract files are maintained by reviewing all contract 

files during regional office site visits to ensure that the files are being 

maintained in accordance with VA policy and Federal Acquisition 

Regulations. 

• VA assembled a Business Process Reengineering team to study how to

best improve controls over VR&E payments, including payments to 

contractors. As part of this effort, VA is considering consolidating payment 

processing from all regional offices into fewer regional offices.

Objective 1: Internal Controls Recommendation Status

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VA Efforts to Address Issues with Contracting Data

Are On Hold

• The VR&E Task Force recommended that VA improve 

the capability of Corporate WINRS to provide data for 

program management.

• In response to the Task Force’s recommendations,

VA plans to develop a new version of Corporate 

WINRS with improved reporting capabilities, including

reporting of contracting data. At the time of our review,

this effort was on hold, as VA has not requested funding

to upgrade the system in its fiscal year 2007 or 2008

budgets. 

Objective 1: Contracting Data Recommendation Status

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VA Has Not Yet Awarded New National Contracts

• VA did not meet its own deadline to award new contracts by

October 1, 2006, so it exercised the fourth and final option 

year for the current national contracts, through fiscal year

2007. VA expects to award new contracts by August 31,

2007 for fiscal year 2008 (10/1/07). According to VA, if it

cannot award new contracts by then, it has the option to

extend the current national contracts through March 2008.

• VA completed market research for the new national 

contracts.

• VA organized its regional offices into 26 sub-areas for the

purpose of awarding new national contracts. In order to be 

competitive, contractors must demonstrate the capacity to

provide services to all regional offices in a given sub-area.

Objective 1: Awarding New National Contracts 

Recommendation Status 

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Guidance Application, Training, Communication, and

Management Data Are Key Challenges to Improving VA’s

Management of VR&E Service Contracting

• Regional offices are not fully applying VA’s contracting 

guidance.

• Current training does not adequately prepare Contracting 

Officers to manage contracts.

• Regional offices report delays in communication, but VA

headquarters is taking actions to address these concerns.

• In addition to having inadequate reporting capabilities, 

inadequate internal controls over contracting data raise

reliability concerns.

Overview of Finding 2

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Regional Offices Are Not Fully Applying VA’s 

Contracting Guidance

• VA quality assurance reviews of 10 regional offices in fiscal year 

2006 found that some regional offices were not fully implementing 

VA’s contracting guidance. For example, some regional offices

were not maintaining their contract files in accordance with VA’s

contract file maintenance guidance or requiring staff with contractor

oversight responsibilities to complete contracting training.

• During our site visits to four regional offices, we found that no 

offices had implemented all aspects of the contract file maintenance 

guidance.

• Some regional offices said they were not sure under which 

circumstances the guidance applies to local contracts.

Objective 2: Contracting Guidance

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Current Training Does Not Adequately Prepare 

Contracting Officers to Manage Contracts

Required contracting training does not provide local

officials with an adequate level of contracting expertise to 

manage contracts.

• Contracting Officers at three of the five sites we contacted said

that VA’s training has not prepared them to adequately manage 

contracts.

• A few Contracting Officers do not feel adequately prepared to 

handle larger, more complex contracts that must be competed

among several vendors. Consequently, they are purchasing 

services through smaller, noncompetitive contracts.

Objective 2: Training

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Regional Offices Report Delays in Communication, 

But VA Headquarters Is Taking Actions to Address 

These Concerns

• Regional office officials told us that VR&E headquarters is not 

always timely in responding to questions or requests to clarify

contracting-related guidance, resulting in service delays to veterans

and misuse of inactive contracts, among other problems.

• VR&E headquarters officials said that they are aware of these 

concerns, and VA is taking actions to address them.

• VR&E headquarters hired an additional contracting specialist 

who will act as the primary liaison to regional offices.

• VA established an electronic mailbox for all regional office

contracting questions. 

• VA will continue allocating time during regular VR&E Officer

call-in sessions for contract-related questions.

Objective 2: Communication

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VA’s Management of VR&E Contracting Is Limited by 

Inadequate Reporting Capabilities

• Corporate WINRS was originally designed to capture case

management information on veterans. As the Task Force noted, the

system is now used to collect program management data as well. 

Currently, Corporate WINRS can

• provide data for a range of automated reports to track certain 

activities such as regional offices’ caseloads, the case status of

veterans by counselor, and contractor timeliness.

• However, automated reports that would facilitate contract

management have not yet been fully developed. Currently, 

Corporate WINRS cannot

• readily track contracting activities such as contractor costs by

regional office and 

• readily and reliably separate spending on national versus local

contracts.

Objective 2: Management Data

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Inadequate Internal Controls over Contracting Data

Raise Reliability Concerns

• VR&E officials at all five regional offices we contacted told us that 

Corporate WINRS lacks adequate internal controls, a condition that could 

lead to errors, including

• obligating funds to expired contracts and

• obligating funds from an incorrect funding source.

• VA officials recognize that current restrictions in Corporate WINRS affect

the integrity of any process used to measure the exact payments or 

pending obligations on any contract.

• When we compared contracting data provided by the regional offices we 

visited to data provided by VA, we found some discrepancies—potentially

affecting data reliability—in the

• number of contracts used,

• type of contract used (national versus local), and 

• amount paid to contractors.

Objective 2: Management Data

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Conclusions

• Contracting is a valuable tool for the VR&E program. A well

managed contracting system can help VR&E provide services to 

veterans by

• gathering the information needed to make entitlement decisions 

and evaluate veterans’ employability,

• supplementing services provided by VA staff, and 

• obtaining services at the best value to the government.

• Because several regional offices felt that prices were too high 

under the current national contracts, they requested and obtained 

lower prices. Because VA has conducted market research in 

preparation for issuing its new national contracts, which it did not 

do last time, VA has positioned itself to be at less risk of 

overpaying this time around.

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Conclusions (continued)

• VA’s oversight and communication with regional offices is a work

in progress, but in the absence of continued improvement, regional 

offices may be putting VA at risk for overpaying local contractors.

• Given their current level of training, regional VR&E officials may

continue to use noncompetitive contracts even when they are not 

necessarily appropriate. Negotiating competitive contracts requires 

greater contracting expertise, but may also provide better prices

and outcomes. 

• Gains from improved contract management will be minimized 

without an information system to provide usable, reliable data on 

contract use. VA plans to improve the reporting capabilities of 

Corporate WINRS, but without improvements to internal controls

and data reliability, reports produced by the system will not be as

useful as they could be as management tools.

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Recommendations for Executive Action

To help improve VA’s management of VR&E service contracting, both at

the headquarters and regional office levels, we recommend that the 

Secretary of Veterans Affairs direct the Under Secretary for Benefits to

• Conduct a management review to assess how regional offices are 

implementing contracting guidance and take necessary actions to 

make needed improvements. For example, VA could clarify to 

VR&E employees how existing VR&E guidance on contract file 

maintenance applies to local contracts.

• Require regional offices to report on the efficacy of contracting 

training and take necessary actions to make needed 

improvements. For example, VA could develop VR&E-specific 

contracting training.

• Improve VA management of VR&E contracting by improving 

Corporate WINRS reporting capabilities and its internal controls

over contracting data.

Page 33 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
Appendix II: Objectives, Scope, and Methodology 

We examined (1) the progress VA has made in implementing selected 

recommendations on contracting for VR&E services made by the VR&E Task Force 

and VA Inspector General reports, and (2) the key challenges in improving its 

management of VR&E service contracting. To address these issues, we identified 

contracting-related recommendations from the 2004 VR&E Task Force and 2005 VA 

Inspector General reports, interviewed officials from VA headquarters, conducted 

case studies of four VA regional offices, analyzed VR&E contract-related management 

data, and reviewed contract files at VA’s Office of Acquisition and Materiel 

Management (OA&MM). We conducted our work from March 2006 to February 2007 

in accordance with generally accepted government auditing standards. 

To identify contract-related recommendations from the 2004 VR&E Task Force and 

2005 VA Inspector General reports, we examined all recommendations from both 

reports, selecting recommendations related to (1) national contracting, (2) human 

capital issues related to contracting activities, (3) internal controls over contracting 

activities at the regional office level, and (4) data on contracting. Overall, we 

identified 10 recommendations to include in our review (table 1). To obtain 

information on the status of contract-related recommendations and to determine the 

changes VA has made to its VR&E contracting policies and procedures in response to 

these recommendations, we interviewed VA officials, including officials from the 

VR&E Service. Additionally, we obtained updated status reports on VR&E Task Force 

and VA Inspector General recommendations from VA headquarters. 

Page 34 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
Table 1. VR&E Task Force and VA Inspector General Contracting-Related 

Recommendations 

Area of focus 

VR&E Task Force 

recommendations VA OIG recommendations 

National 

contracts 

Revise the scope of current national

contracts. 

Revise the scope of and compete new 

contracts.

Human 

capital issues

(1) Create and staff a new position for 

contract specialists at regional offices

and implement a training program for 

these staff. 

(2) Develop a contract training

program for all VR&E staff with direct

responsibility for contract oversight. 

Provide contracting staff with 

appropriate training and contract 

warrant authority.

Regional 

office 

internal 

controls over 

contracting 

activities 

Enhance VA’s capacity to manage 

contracts. 

(1) Require that regional offices 

maintain documentation related to the

following: contracts used by the office, 

instances when one contractor is used

instead of another despite the fact that 

a higher price is being paid for services, 

and instances when actions are taken to 

address identified quality assurance 

review deficiencies. 

(2) Implement adequate contract

payment internal controls. 

Contracting 

data 

(1) Enhance the usability of Corporate

WINRS for internal control and

financial management purposes and to 

manage and monitor all contractor

services. 

(2) Elevate funding priority of 

Corporate WINRS and accelerate the 

development and adoption of financial 

and process enhancements.

Source: GAO analysis. 

Page 35 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
To evaluate VA’s progress in implementing the recommendations made by the VR&E 

Task Force and the VA Inspector General and to identify key challenges in doing so, 

we visited four regional offices representing each of VBA’s geographic areas. Our 

case study sites were Boston, Denver, St. Petersburg, and Houston. In addition to 

geographic diversity, sites were selected that used different types of contracts 

(national and/or local) and that represented a range of regional office size and 

contracting expenditures among VA’s 57 regional offices (table 2). We also contacted 

VBA’s Waco regional office. Waco, like Houston, piloted VA’s strategy for purchasing 

VR&E services through national contracts, although neither regional office had any 

national contracts available to it for use during the time of our review. 

Table 2. Case Study Site Selection Criteria, Fiscal Year 2006 

Case 

study site 

VBA 

area 

Number of

veterans 

served

Payments 

for national 

contracts

Number of

national 

contracts

Payments 

for local 

contracts 

Number of

local 

contracts

Boston Eastern 1,011 $148,349 3 $17,198 18

Denver Western 2,825 $592,253 8 $504,115 21

St. 

Petersburg 

Southern 4,977 $1,394,212 7 $128,290 114 

Houston Central 4,921 a a $626,731 64

 Source: Corporate WINRS and data provided by regional offices. a No national contracts were available to the Houston VA regional office. 

At each of the case study sites, we interviewed VR&E officials involved in the 

management and oversight of contracted services, discussing the use of national and 

local contracts, implementation of VA’s contracting policies and procedures, and 

challenges they experienced. We also obtained regional office data on the number of 

contracts used and payments made for contracted services during fiscal year 2006. 

We assessed the implementation of VA’s guidance on contracting by reviewing 

national and local contract files for contracts that were still being used after January 

2006, in order to allow regional offices adequate time to implement VA’s policy 

guidance that went into effect in September 2005. To determine the number of 

available national contracts at each case study site using national contracts in fiscal 

year 2006, we reviewed data from VA’s OA&MM and interviewed OA&MM officials. 

To determine the maximum allowable price for services, we reviewed contract files 

for national contracts available to the Boston, Denver, and St. Petersburg regional 

offices at VA’s OA&MM. 

Review of VA’s Management Data on Contracting 

To determine the types of services purchased through VR&E contracts and the 

amount spent on contracted services nationwide, we analyzed fiscal year 2006 data 

on contracted services from VA’s Corporate WINRS case management data system. 

The information we reviewed included data on national and local contract usage, 

services provided through contracts, and payments for contracted services. 

To assess the reliability of Corporate WINRS contracting data, we interviewed 

knowledgeable VA officials and compared contract-related data contained in 

Corporate WINRS to local data we collected from the four case study sites. We also 

reviewed existing documentation for the data system, including (1) the Corporate 

Page 36 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
WINRS Users Manual, (2) the VR&E Task Force and VA Inspector General reports, 

and (3) an internal evaluation of the data system conducted by VA’s Office of 

Business Oversight, Systems Quality Assurance Service. While we identified accuracy 

limitations with Corporate WINRS contracting data—discussed in the slide entitled 

“Objective 2: Management Data – Inadequate Internal Controls Over Contracting Data 

Raise Reliability Concerns” in appendix I (page 30)—we found that generally VA’s 

Corporate WINRS data on contracting were sufficiently reliable for the purposes of 

our study. We determined during our reliability assessment of the data that the data 

were reliable enough to use to report on national trends. 

Page 37 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
Appendix III: Comments from the Department of Veterans Affairs 

Page 38 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
Page 39 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
Page 40 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
Related GAO Products 

Contract Management: Further Action Needed to Improve Veterans Affairs 

Acquisition Function. GAO-06-144. Washington, D.C.: October 19, 2005. 

Framework for Assessing the Acquisition Function at Federal Agencies. 

GAO-05-218G. Washington, D.C.: September 2005. 

Vocational Rehabilitation: VA Has Opportunities to Improve Services, but Faces 

Significant Challenges. GAO-05-572T. Washington, D.C.: April 20, 2005. 

Vocational Rehabilitation: More VA and DOD Collaboration Needed to Expedite 

Services for Seriously Injured Servicemembers. GAO-05-167. Washington, D.C.: 

January 14, 2005. 

VA Vocational Rehabilitation and Employment Program: GAO Comments on 

Key Task Force Findings and Recommendations. GAO-04-853. Washington, D.C.: 

June 15, 2004. 

(130562)

Page 41 GAO-07-568R VA Vocational Rehabilitation and Employment Contracting 
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