Report to the Chairman, Subcommittee 

on Oversight and Investigations, 

Committee on Veterans’ Affairs, 

House of Representatives 

United States Government Accountability Office

GAO

October 2005 CONTRACT 

MANAGEMENT 

Further Action 

Needed to Improve 

Veterans Affairs 

Acquisition Function 

GAO-06-144 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-06-144.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact William T. 

Woods, 202-512-4841, or woodsw@gao.gov.

Highlights of GAO-06-144, a report to the 

Chairman, Subcommittee on Oversight 

and Investigations, Committee on 

Veterans’ Affairs, House of 

Representatives 

October 2005

CONTRACT MANAGEMENT 

Further Action Needed to Improve 

Veterans Affairs Acquisition Function 

Progress made by the Department of Veterans Affairs in implementing the 

key recommendations from the NAVSUP report has been limited. In fact, a 

year after the report was issued, VA has not completed actions on any of the 

seven key recommendations GAO identified. While VA agrees 

implementation of the key recommendations is necessary, the steps it has 

taken range from no action to partial action. No action has been taken on 

three key recommendations: to develop a long-term improvement plan, 

adequate management metrics, and a supplement to the agency’s strategic 

plan. No more than partial action has been taken on four others: 

establishment of a contract review board for reviewing files at key 

milestones along with improvement of postaward contract management, 

customer relationships, and employee morale. 

Status of Key Recommendations 

Key NAVSUP Recommendations Status 

1. Develop a long-term improvement plan No action 

2. Develop adequate management metrics No action 

3. Supplement strategic plan No action 

4. Establish contract review board Partial action 

5. Improve postaward contract management Partial action 

6. Improve customer relationships Partial action 

7. Improve employee morale Partial action 

Source: GAO analysis. 

A lack of permanent leadership in key positions has contributed to the lack 

of further progress in revising acquisition policies, procedures, and 

management and oversight practices, according to VA officials. For example, 

two key VA acquisitions management positions were unfilled—one for 

15 months and the other for 25 months. In addition, VA has neither set time 

frames for completing actions on the NAVSUP recommendations nor 

established a method to measure progress. Until VA establishes a process for 

completing action on the NAVSUP recommendations, the benefits of the 

study may not be fully realized. 

The Department of Veterans Affairs 

(VA) is among the largest federal 

acquisition agencies, spending 

$7.3 billion on product and service 

acquisitions in 2004 alone. Recent 

reports by VA and other 

organizations identified 

weaknesses in the agency’s 

acquisition function that could 

result in excess costs to the 

taxpayer. One report by the Naval 

Supply Systems Command 

(NAVSUP) made 24 

recommendations to improve VA’s 

acquisition function. VA has 

accepted these recommendations. 

GAO was asked to review the 

progress VA has made in 

implementing the key NAVSUP 

recommendations. GAO identified 

7 of the 24 recommendations as 

key, based primarily on its 

professional judgment and prior 

experience. 

What GAO Recommends

GAO recommends that the 

Secretary of Veterans Affairs direct 

the Deputy Assistant Secretary for 

Acquisition and Materiel 

Management to 

• identify specific time frames 

and milestones for completing 

actions on the key NAVSUP 

recommendations and 

• establish a method to measure 

progress in implementing the 

recommendations. 

VA concurred with GAO’s 

recommendations. 
Page i GAO-06-144 Contract Management 

Letter 1

Results in Brief 2 

Background 2 

Progress Limited in Implementing Key NAVSUP Recommendations 4 

Conclusions 7 

Recommendations for Executive Action 8 

Agency Comments 8 

Appendix I NAVSUP’s Report Recommendations 10 

Appendix II Scope and Methodology 12 

Appendix III Comments from the Department Of Veterans Affairs 14 

Tables 

Table 1: Status of Key Recommendations 4 

Table 2: Listing of Recommendations Contained in NAVSUP Report 10 

Abbreviations 

AOS Acquisition Operations Service 

CoreFLS Core Financial and Logistics System 

IG Inspector General 

NAVSUP Naval Supply Systems Command 

OA&MM Office of Acquisition and Materiel Management 

VA Department of Veterans Affairs

Contents 

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Page 1 GAO-06-144 VA Contract Management 

October 19, 2005 

The Honorable Michael Bilirakis 

Chairman, Subcommittee on Oversight and Investigations 

Committee on Veterans’ Affairs 

House of Representatives 

Dear Mr. Chairman: 

The Department of Veterans Affairs (VA) operates one of the largest health 

care systems in the world and is among the largest acquisition agencies in 

the federal government. In fiscal year 2004 alone, VA spent $7.3 billion 

acquiring the products and services needed to carry out its mission on 

behalf of the nation’s veterans. Recently, reports by entities within VA as 

well as outside organizations have identified various weaknesses in the 

agency’s acquisition function that could affect the successful 

accomplishment of its mission or result in higher than necessary costs to 

the taxpayer. Among these reports is one prepared by the Naval Supply 

Systems Command (NAVSUP),1

 a Navy acquisition organization VA had 

requested to assess its acquisition function. The NAVSUP report identified 

a wide range of areas needing VA management attention and made 

24 recommendations, which VA agrees should be implemented. 

Given the importance of acquisition to VA’s mission, you asked us to 

review the progress VA has made in implementing the key 

recommendations in the NAVSUP report. In selecting 7 key 

recommendations from among the 24 in the report, we relied primarily on 

our professional judgment and the experience gained from previous 

reviews of acquisition issues at various federal agencies. We also 

considered the importance the NAVSUP report and VA officials assigned 

to the specific recommendations. We chose recommendations that, if 

implemented successfully, are likely to have the broadest and most 

significant impact on VA’s operations. Appendix I lists the 

24 recommendations of the NAVSUP report, starting with the 

7 recommendations we identified as key. To determine the status of the 

 1

Naval Supply Systems Command, Procurement Performance Management Assessment 

Program Review, Department of Veterans Affairs, Office of Acquisition and Materiel 

Management, Acquisition Operations Service (Washington, D.C.: Sept.13, 2004). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-06-144 VA Contract Management 

seven key recommendations, we met with acquisition officials at VA’s 

Office of Acquisition and Materiel Management (OA&MM) and with 

officials at VA’s Office of Inspector General (IG) who are responsible for 

audits of contracting practices. We also reviewed relevant agency 

documents. We did not independently assess the state of the acquisition 

function at VA. We conducted our review from March to August 2005 in 

accordance with generally accepted government auditing standards. A 

more detailed discussion of our scope and methodology is in appendix II. 

Progress made by the Department of Veterans Affairs in implementing the 

key recommendations from the NAVSUP report has been limited. In fact, a 

year after the report was issued, VA has not completed action on any of 

the seven key recommendations we identified. While VA agrees that 

implementation of the key recommendations is necessary, the steps it has 

taken range from no action—such as a decision to defer the development 

of a long-term improvement plan—to partial action—for example, drafting 

updated standard operating procedures, which await final approval. A lack 

of permanent leadership in key positions is contributing to the limited 

progress in revising acquisition policies, procedures, and management and 

oversight practices, according to VA officials. In addition, VA has neither 

set time frames for completing actions on the NAVSUP recommendations 

nor established a method to measure progress. Until VA establishes a 

process for completing action on the NAVSUP recommendations, the 

benefits of the study may not be fully realized. 

We are recommending that VA establish a schedule for completing actions 

on the key recommendations from the NAVSUP report and establish a 

method to measure progress. In commenting on a draft of this report, VA 

agreed with our conclusions and concurred with our recommendations. 

VA’s comments are included in appendix III. 

The Office of Acquisition and Materiel Management is the principal office 

within VA headquarters responsible for supporting the agency’s programs. 

The OA&MM includes an Office of Acquisitions that, among other things, 

provides acquisition planning and support, helps develop statements of 

work, offers expertise in the areas of information technology and software 

acquisition, develops and implements acquisition policy, conducts 

business reviews, and issues warrants for contracting personnel. As of 

Results in Brief 

Background 
Page 3 GAO-06-144 VA Contract Management 

June 2005, the Office of Acquisitions was managing contracts valued at 

over $18 billion, including option years. 2

In recent years, reports have cited inadequacies in the contracting 

practices at VA’s Office of Acquisitions and also have identified actions 

needed to improve them. In fiscal year 2001, the VA IG issued a report that 

expressed significant concerns about the effectiveness of VA’s acquisition 

system.3

 As a result, the Secretary of Veterans Affairs established, in June 

2001, a Procurement Reform Task Force to review VA’s procurement 

system. The task force’s May 2002 report set five major goals that it 

believed would improve VA’s acquisition system: (1) leverage purchasing 

power, (2) standardize commodities, (3) obtain and improve 

comprehensive information, (4) improve organizational effectiveness, and 

(5) ensure a sufficient and talented workforce. 

Issues related to organizational and workforce effectiveness were at the 

center of the difficulties VA experienced implementing its Core Financial 

and Logistics System (CoreFLS).4

 The VA IG and an independent 

consultant issued reports on CoreFLS in August 2004 and June 2004, 

respectively, and both noted that VA did not do an adequate job of 

managing and monitoring the CoreFLS contract and did not protect the 

interests of the government. Ultimately, the contract was canceled after 

VA had spent nearly $250 million over 5 years. 

In response to deficiencies noted in the CoreFLS reports, VA sought help 

to improve the quality, effectiveness, and efficiency of its acquisition 

function by requesting that NAVSUP perform an independent assessment 

of the Acquisition Operations Service (AOS). NAVSUP looked at three 

elements of the contracting process: management of the contracting 

function; contract planning and related functions; and special interest 

items such as information technology procurements, use of the federal 

 2

The Office of Acquisitions consists of three components: Acquisition Operations Service, 

Acquisition Resources Service, and the National Acquisition Center. The $18 billion 

represents contracts managed by the Acquisition Operations Service. 

3

Department of Veterans Affairs, Office of Inspector General, Evaluation of VA’s 

Purchasing Practices, Report No. 01-01855-75 (Washington, D.C.: May 15, 2001). 

4

CoreFLS is an integrated commercial off-the shelf software financial and logistics system 

that, when fully implemented, is intended to be used by every financial and logistics office 

in VA. 
Page 4 GAO-06-144 VA Contract Management 

supply schedule, and postaward contract management. In a September 

2004 report, NAVSUP identified problems in all three elements. 

While VA agrees with the NAVSUP report’s recommendations, limited 

progress has been made in implementing the seven key recommendations 

of the report. VA officials indicate that factors contributing to this limited 

progress include the absence of key personnel, a high turnover rate, and a 

heavy contracting workload. We found that VA has neither established 

schedules for completing action on the recommendations nor established 

a method to measure its progress. Until VA establishes well-defined 

procedures for completing action on the NAVSUP recommendations, the 

benefits of this study may not be fully realized. 

The status of the seven key recommendations we identified is summarized 

in Table 1: 

Table 1: Status of Key Recommendations 

Key NAVSUP recommendations Status 

Develop a long-term improvement plan No action 

Develop adequate management metrics No action 

Supplement strategic plan No action 

Establish contract review board for reviewing files at key milestones Partial action 

Improve postaward contract management Partial action 

Improve customer relationships Partial action 

Improve employee morale Partial action 

Source: GAO analysis. 

Action taken by VA on the seven key recommendations in the NAVSUP 

report has varied from no action, to initial steps, to more advanced efforts 

in specific areas. 

• Long-term improvement plan. NAVSUP recommended that AOS 

develop a long-term approach to address improvements needed in key 

areas. VA acknowledges that establishing a long-term improvement plan is 

necessary to maintain its focus on the actions that will result in desired 

organizational and cultural changes. During the course of our review, 

however, we found that no action has been taken to develop a long-term 

improvement plan with established milestones for specific actions. 

Progress Limited in 

Implementing Key 

NAVSUP 

Recommendations 

Range of Actions on 

Recommendations 
Page 5 GAO-06-144 VA Contract Management 

• Adequate management metrics. NAVSUP recommended that AOS 

develop metrics to effectively monitor VA’s agencywide acquisition and 

procurement processes, resource needs, and employee productivity 

because it found it that AOS was not receiving information needed to 

oversee the contracting function. VA officials agree that they need to have 

the ability to continuously and actively monitor acquisitions from the preaward to contract closeout stages to identify problem areas and trends. VA 

officials acknowledge that, without adequate metrics, its managers are 

unable to oversee operations and make long-term decisions about their 

organizations; customers cannot review the status of their requirements 

without direct contact with contracting officers; and contracting officers 

are hampered in their ability to view their current workload or quickly 

assess deadlines. During our review, VA officials stated that they intend to 

use a balanced scorecard approach for organizational metrics in the 

future. However, no steps had been taken to establish specific metrics at 

the time we completed our review. 

• Strategic planning. NAVSUP recommended that AOS develop a 

supplement to the OA&MM strategic plan that includes operational-level 

goals to provide employees with a better understanding of their roles and 

how they contribute to the agency’s strategic goals, objectives, and 

performance measures. VA officials indicated that progress on the 

strategic plan had been delayed because it will rely heavily on 

management metrics that will be identified as part of the effort to develop 

a balanced scorecard. With the right metrics in place, VA officials believe 

they will be in a much better position to supplement the strategic plan. VA 

had not revised the strategic plan by the time we finished our review. 

• Process to review contract files at key acquisition milestones. 

NAVSUP recommended that AOS establish a contract review board to 

improve management of the agency’s contract function. NAVSUP believed 

that a contracting review board composed of senior contracting officers 

would provide a mechanism to effectively review contracting actions at 

key acquisition milestones and provide needed overall management. To 

enhance these reviews, VA has prepared draft standard operating 

procedures on how contract files should be organized and documented. 

Final approval is pending. VA officials indicated, however, that no 

decisions have been made about how or when they will institute a contract 

review board as part of the agency’s procurement policies and processes. 

• Postaward contract management. NAVSUP recommended that the AOS 

contracting officers pay more attention to postaward contract 

management by developing a contract administration plan, participating in 

postaward reviews, conducting contracting officer technical 
Page 6 GAO-06-144 VA Contract Management 

representative reviews, and improving postaward file documentation. We 

found that VA has taken some action to address postaward contract 

management. For example, AOS is training a majority of its contracting 

specialists on the electronic contract management system. VA officials 

indicated that the electronic contract management system will help 

improve its postaward contract management capability. The electronic 

contract management system is a pilot effort that VA expects to be 

operational in early 2006. Also, final approval for a draft standard 

operating procedure for documenting significant postaward actions is 

pending. 

• Customer relationships. NAVSUP reported that VA’s ability to relate to 

its customers is at a low point and recommended VA take action to 

improve customer relations. Some mechanisms VA officials agreed are 

needed to improve customer relations include requiring that program 

reviews include both the customer and contracting personnel, greater use 

and marketing of the existing customer guide to customers and 

contracting communities, the establishment of a customer feedback 

mechanism such as satisfaction surveys, placing a customer section on the 

World Wide Web, and engaging in strategic acquisition planning with 

customer personnel. We noted that VA is taking some of the actions 

recommended by NAVSUP. For example, VA has established biweekly 

meetings with major customer groups, created customer-focused teams to 

work on specific projects, and nearly completed efforts to issue a 

comprehensive customer guide. Pending are efforts to include customers 

in the AOS review process and to develop a customer section on the web 

site. 

• Employee morale. The NAVSUP report said that VA employee morale is 

at a low point and is having an impact on employee productivity. NAVSUP 

said that AOS needs to respond to its employee morale issue by addressing 

specific employee concerns related to workload distribution, strategic and 

acquisition planning, communication, and complaint resolution. VA has 

taken several actions related to employee morale. Workload distribution 

issues have been addressed by developing a workload and spreadsheet 

tracking system and removing restrictions on work schedules for 

employees at ranks of GS-15 and below. Strategic planning actions 

completed include the development of mission and vision statements by a 

cross section of VA personnel and collective involvement in approval of 

organizational restructuring efforts. Communication and complaint 

resolution issues are being resolved by facilitating a meeting between AOS 

management and employees to air concerns. Partially completed actions 

include the development of new employee training module, including a 

comprehensive new employee orientation package. According to VA, new 
Page 7 GAO-06-144 VA Contract Management 

employee training includes the dissemination of draft standard operating 

procedures. VA is also in the process of developing an employee survey to 

measure overall employee satisfaction. 

Discussions with VA officials indicate that the agency believes its limited 

progress has largely been due to the absence of permanent leadership and 

insufficient staffing levels. Officials told us that the recommendations will 

be implemented once key officials are in place. For example, positions for 

two key VA acquisition managers—Associate Deputy Assistant Secretary 

for Acquisitions and the Director for AOS—were unfilled for about 25 

months and 15 months, respectively. But during the course of our review 

these positions were filled. 

As of August 25, 2005, AOS has still not selected permanent personnel for 

17 of its 62 positions. This includes two other key management positions—

the Deputy Director of Field Operations and the Deputy Director for VA 

Central Office Operations, both filled by people in an acting role. 

Supervisory leadership has also suffered as a consequence of 

understaffing, VA officials said. Four of the eight supervisory contract 

specialist positions are filled by people in an acting role. Critical 

nonsupervisory positions also have remained unfilled, with 11 contract 

specialists’ positions vacant. The absence of contract specialists has 

largely been caused by a high turnover rate. According to VA officials, the 

high turnover rate can be attributed to a heavy contracting workload, as 

well as the other factors identified in the NAVSUP report. 

When asked, the VA officials we spoke with could not provide specific 

time frames for completing actions on the recommendations or a method 

to measure progress. We believe the lack of an implementation plan with 

time frames and milestones, as well as a way to measure progress, 

contributed to VA’s limited progress in implementing the key NAVSUP 

recommendations. 

The seven key NAVSUP recommendations we identified have not been 

fully implemented. While some progress is being made, progress is lacking 

in those areas that we believe are critical to an efficient and effective 

acquisition process. If key recommendations for improvement are not 

adequately addressed, VA has no assurance that billions of its Office of 

Acquisitions contract dollars will be managed in an efficient and effective 

manner, or that it can protect the government’s interest in providing 

veterans with high-quality products, services, and expertise in a timely 

fashion at a reasonable price. 

Factors Contributing to 

Limited Progress 

Conclusions 
Page 8 GAO-06-144 VA Contract Management 

While personnel-related factors have contributed to VA’s lack of progress, 

the absence of schedules for completion of actions and of metrics that 

could be used to determine agency progress is also an important factor. 

Current VA officials, even those in an acting capacity, can identify 

timetables for completing action on key NAVSUP recommendations and 

establish a means to determine progress. Without these elements of an 

action plan, the benefits envisioned by the study may not be fully realized. 

We recommend that the Secretary of Veterans Affairs direct the Deputy 

Assistant Secretary for Acquisition and Materiel Management to 

• identify specific time frames and milestones for completing actions on the 

key NAVSUP recommendations, and 

• establish a method to measure progress in implementing the 

recommendations. 

In commenting on a draft of this report, the Deputy Secretary of Veterans 

Affairs agreed with our conclusions and concurred with our 

recommendations. VA’s written comments are included in appendix III. 

We will send copies of this report to the Honorable R. James Nicholson, 

Secretary of Veterans Affairs; appropriate congressional committees; and 

other interested parties. We will also provide copies to others on request. 

In addition, the report will be available at no charge on the GAO Web site 

at http://www.gao.gov. 

Recommendations for 

Executive Action 

Agency Comments 
Page 9 GAO-06-144 VA Contract Management 

If you have any questions concerning this report, please contact me at 

(202) 512-4841 or by e-mail at woodsw@gao.gov. Contact points for our 

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

last page of this report. Key contributors to this report were 

Blake Ainsworth, Penny Berrier, William Bricking, Myra Watts Butler, 

Christina Cromley, Lisa Simon, Shannon Simpson, and Bob Swierczek. 

William T. Woods 

Director 

Acquisition and Sourcing Management 
Appendix I: NAVSUP’s Report 

Recommendations 

Page 10 GAO-06-144 VA Contract Management 

In September 2004, the Naval Supply System Command (NAVSUP) issued 

a report, Procurement Performance Management Assessment Program

on its review of the Department of Veterans Affairs, Office of Acquisition 

and Materiel Management, Acquisition Operations Service. The 24 

recommendations contained in the NAVSUP report are listed in table 2 

below. The first seven recommendations listed are the key 

recommendations we identified. 

Table 2: Listing of Recommendations Contained in NAVSUP Report 

No. Issue Area Recommendation 

1 Long-term improvement plan Develop a long-term plan to address key management areas such as establishing 

attainable milestones for remedial and long-term actions and keeping workforce 

involved in organizational transformation. 

2 Management metrics Develop adequate management metrics to effectively monitor critical acquisition 

processes and thus provide visibility over status of contract requirements, 

operations, and contract due dates. 

3 Strategic planning Revise the business plan to identify operational goals, objectives, and performance 

measures for the entire workforce, and encourage employees to participate in its 

development. 

4 Contract file reviews Expand and institutionalize a process review at critical acquisition milestones rather 

than a single review prior to award. A standard process, such as instituting a 

contract review board, should involve the customers as key participants. 

5 Postaward functions Emphasize greater attention to postaward contract management such as 

developing a contract administration plan, participating in postaward and technical 

reviews, and placing a greater emphasis on postaward file documentation. 

6 Customer relations Establish mechanisms to improve customer relations by developing customer and 

contracting teams to coordinate purchases and conduct program reviews, and 

establishing a survey to obtain customer feedback on contractor performance. 

7 Employee morale Take the necessary steps to improve employee morale in the problem areas cited, 

and conduct annual employee satisfaction surveys and give results to employees. 

8 Communication Ensure that improved communication processes are established with employees to 

include regular staff meetings and appropriate dissemination of information and 

contract policy. 

9 Warranting Review the levels of contracting authority granted to the workforce and adjust as 

deemed appropriate. 

10 Current standard operating procedures Review and revise content contained within the agency’s current standard operating 

procedures to more accurately and thoroughly cover the topics discussed. 

11 New standard operating procedure Establish a standard operating procedure implementing a contract review board 

process for key acquisition milestones. 

12 Legal involvement Review current list of legal issues to provide seamless and continuous support 

throughout the acquisition process. 

13 Acquisition planning Engage customers early in the development of the acquisition to allow sufficient 

advance notice of contracting requirements to facilitate acquisition planning. 

Appendix I: NAVSUP’s Report 

Recommendations 
Appendix I: NAVSUP’s Report 

Recommendations 

Page 11 GAO-06-144 VA Contract Management 

No. Issue Area Recommendation 

14 File documentation Ensure file documentation identifies the correct Federal Acquisition Regulation 

citation as the authority for the action. Additionally, discussion of source selection 

criteria in sole source situations is misleading and should be avoided. 

15 Supporting rationale for modifications Ensure that the rationale and authority supporting contract modifications are 

documented. 

16 Description of contract type Be conscientious to properly describe contract types. 

17 Fund/identify guaranteed minimum under 

indefinite delivery indefinite quantity 

contracts 

Ensure indefinite delivery indefinite quantity contracts are awarded correctly with the 

appropriate elements, such as guaranteed minimums and maximum ordering 

limitations. 

18 Lease-purchase analysis and screenings Personnel should become familiar with and employ proper leasing practices when 

deemed appropriate. Further, pricing of all contract actions should be meaningfully 

analyzed to ensure fairness and reasonableness. 

19 Processing Federal Supply Schedule 

orders 

Ensure General Service Administration schedule orders are being placed in 

accordance with Federal Acquisition Regulation Part 8 requirements. Specifically, 

performance-based statements of work, evaluation criteria, price reductions, and 

complete documentation of price negotiation memorandums. 

20 File organization Issue a standard operating procedure that will clearly establish uniform guidance for 

contract file organization and documentation. 

21 Contract modifications Establish a process to ensure the underlying rationale for modifications is 

documented. 

22 Contract administration Establish a standard operating procedure for documenting significant postaward 

contract actions. 

23 Letter contracts/undefinitized contractual 

actions 

Develop documented process for approval of letter contracts to ensure consistency 

and ensure the proper level of review is provided for these actions. 

24 Claims Create a database or other system for tracking claims and disputes. 

Source: NAVSUP report. 
Appendix II: Scope and Methodology 

Page 12 GAO-06-144 Contract Management 

To select the key recommendations from those identified in the NAVSUP 

September 2004 report, we focused on recommendations that, if 

successfully implemented, are likely to have the broadest and most 

significant impact on the Department of Veterans Affairs’ (VA) operations. 

We chose recommendations that are crosscutting in nature. Accordingly, 

in many instances recommendations we did not identify as being key are 

nevertheless, we believe, covered to some extent by one or more of the 

key recommendations. In making our selections, we relied primarily on 

our professional judgment and the experience gained over many years in 

reviews of acquisition management issues governmentwide. In particular, 

we relied on the observations and guidance captured in a draft of a GAO 

report entitled Framework for Assessing the Acquisition Function at 

Federal Agencies.

1

 With this insight, we determined that 7 of the 24 

NAVSUP recommendations were key. 

To identify the progress VA has made in implementing these seven key 

NAVSUP recommendations, we met with acquisition officials at VA’s 

Office of Acquisition and Materiel Management (OA&MM). We also 

reviewed documents intended to demonstrate the status of VA’s actions. 

In order to attain a broader view of VA acquisition issues, we identified 

and reviewed other VA and independent reports issued prior to the 

NAVSUP report. This included VA’s Procurement Reform Task Force (May 

2002) report, which recommended ways to improve procurement practices 

across VA, and reports by the VA Inspector General (August 2004) and 

Carnegie Mellon (June 2004) that noted contract management problems on 

a VA contract for the Core Financial and Logistics System (CoreFLS). We 

reviewed past and current policies, procedures, and internal controls 

associated with VA acquisition processes. We obtained statistics from 

OA&MM on the authorized size of the VA Acquisitions Operations Service 

(AOS) contracting workforce and positions that still need to be filled. We 

obtained data from the Federal Procurement Data System on what VA 

spent during fiscal year 2004 for products and services. Further, we 

obtained data from VA on the amount of contract dollars being managed 

 1

To help assess the strengths and weaknesses of agencies’ acquisition processes, GAO 

developed a framework of general guidance—using input from federal government and 

industry experts. The framework has four interrelated elements that promote an efficient, 

effective, and accountable acquisition process: (1) organizational alignment and leadership, 

(2) policies and processes, (3) human capital, and (4) knowledge and information 

management. GAO, Framework for Assessing the Acquisition Function at Federal 

Agencies, GAO-05-218G, (Washington, D.C.: Sept. 2005). 

Appendix II: Scope and Methodology 
Appendix II: Scope and Methodology 

Page 13 GAO-06-144 Contract Management 

by VA’s Office of Acquisitions as of June 2005. We did not conduct an 

independent assessment of the state of the acquisition function at VA. 

We conducted our work from March to August 2005 in accordance with 

generally accepted government auditing standards. 
Appendix III: Comments from the Department 

Of Veterans Affairs 

Page 14 GAO-06-144 Contract Management 

Appendix III: Comments from the 

Department Of Veterans Affairs 

(120426) 
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