Department of Veterans Affairs 

Office of Inspector General 

Audit of 

Veterans Health Administration 

Open Market Medical Equipment 

and Supply Purchases 

Report No. 08-01519-172 July 21, 2009

VA Office of Inspector General 

Washington, DC 20420 
To Report Suspected Wrongdoing in VA Programs and Operations 

Telephone: 1-800-488-8244 between 8:30AM and 4:00PM Eastern Time, 

Monday through Friday, excluding Federal Holidays 

E-Mail:vaoighotline@va.gov
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Contents 

Page 

Executive Summary .....................................................................................................i-v

Introduction

Purpose............................................................................................................................. 1

Background...................................................................................................................... 1

Scope and Methodology .................................................................................................. 3

Results and Conclusions

Strengthening Open Market Procurement Controls Will Reduce Medical Equipment 

and Supply Costs ..................................................................................................... 4

Appendixes 

A. Summary of Open Market Purchase Management Control 

 Deficiencies at Medical Facilities Visited.......................................................... 12 

B. Scope and Methodology........................................................................................... 13

C. Monetary Benefits in Accordance with IG Act Amendments................................. 18

D. Under Secretary for Health Comments.................................................................... 19

E. Executive Director, Office of Acquisition, Logistics, and 

 Construction Comments..................................................................................... 23

F. OIG Contact and Staff Acknowledgments............................................................... 24

G. Report Distribution .................................................................................................. 25

VA Office of Inspector General 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Executive Summary 

Results in Brief 

The Office of Inspector General (OIG) conducted an audit to determine if Veterans 

Health Administration (VHA) medical facilities purchased medical equipment and supply 

items on the open market when identical, or similar, items were available for less through 

Federal Supply Schedule (FSS), “Schedule 65 IIA”, and to assess the effectiveness of 

VHA controls over open market procurements. 

VHA medical facilities are purchasing medical equipment and supplies on the open 

market when comparable items are available for less on the FSS. Veterans Integrated 

Service Network (VISN) and medical facility staff procured items on the open market, 

which were available for less on the FSS, despite VA policies and Federal regulations 

requiring the use of the FSS. We found VISN and medical facility purchasing staff opted 

to use the open market instead of the FSS because they lacked the knowledge, 

information, and proper tools to use the FSS effectively. 

VHA also needs to strengthen open market procurement controls to reduce medical 

equipment and supply costs. VHA officials lacked effective management controls to 

ensure the implementation of the FSS waiver process and optimal use of the FSS and, 

thus, could not effectively minimize unnecessary VISN and medical facility open market 

procurements. VISN, medical facility, and Procurement and Logistics Office (P&LO) 

logistics staff facilitated these open market procurements when they did not enforce VA’s 

FSS waiver policy which requires open market purchases of FSS medical equipment and 

supply items to be justified, reviewed, and approved. VA’s FSS waiver process, which 

could have alerted VHA officials to problems in open market procurements and the use 

of the FSS, had not been effectively implemented and did not clearly assign P&LO or the 

Office of Acquisition, Logistics, and Construction (OAL&C) responsibility for 

monitoring the effectiveness of the FSS waiver process. 

Our review of a total of $7.89 million open market purchases from 21 VISNs and 

199 medical facilities identified 1,667 purchases (23 percent) made from 20 FSS vendors 

where usage of the FSS instead of the open market would have reduced medical facilities 

costs by about $433,000. Based on our statistical projections, increased use of the FSS 

and fewer unnecessary open market purchases would reduce VHA’s medical equipment 

and supply costs by about $8.2 million annually or $41 million over 5 years. Because we 

obtained data on only a portion of all VA FSS 65 IIA vendors, our methodology may 

understate the potential cost savings of maximizing the appropriate use of the FSS. 

Background 

As one of the nation’s largest health care systems, VA uses various acquisition methods 

such as the open market, local and regional contracts, national contracts, and FSSs to 

VA Office of Inspector General i 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

procure pharmaceuticals, medical equipment, and supplies. VA’s longstanding policy 

has been to encourage its medical facilities to use the most cost-effective procurement 

method available to procure services and supplies. VA’s 2002 Procurement Reform Task 

Force Report clarified this policy by mandating the use of a three-tier purchasing 

hierarchy in order to reduce open market procurements. 

Based on this hierarchy, VHA medical facilities should only use local contracts and the 

open market as their last option when making purchases. Furthermore, 38 USC 8125, 

“Procurement of Health Care Items”, prohibits VHA medical facilities from procuring 

health care items under local contracts and the open market. Unless the procurements are 

needed to furnish healthcare services effectively, such as when a compelling clinical need 

for a specific item or procurement under a local contract is demonstrably more costeffective, the U.S. Code must be followed. 

In fiscal year (FY) 2008, VHA reported $2.9 billion in health care purchases with about 

$369 million (13 percent) made on the open market. Of the $2.9 billion health care 

purchases VHA made in FY 2008, an estimated $878 million (30 percent) of the 

purchases were made from vendors who participated in the FSS 65 IIA program. Under 

FSS 65 IIA, the National Acquisition Center (NAC) solicits, awards, and administers 

VA’s FSS with vendors to leverage VA’s buying power and establish “fair and 

reasonable” pricing for medical equipment and supplies. However, these vendors are not 

required to include all of their items on the FSS, so medical facilities may still use a 

combination of local and regional contracts, the open market, and the FSS to purchase 

medical equipment and supplies from them. 

Findings 

Improvement Needed in FSS Usage for Medical Equipment and Supply Purchases. 

VISN and medical facility managers and staff needed to use FSS 65 IIA more effectively 

to purchase medical equipment and supplies. Federal and VA regulations require VISNs 

and medical facilities to purchase medical equipment and supplies through the FSS unless 

a compelling clinical need requires use of the open market to procure the requested items. 

Nevertheless, we found that VISN and medical facility purchasing staff did not use FSS 

65 IIA effectively and made unnecessary open market purchases. This occurred due to 

the contracting staff’s lack of knowledge and experience using the FSS, their inability to 

use available NAC and P&LO information and tools effectively, and their reliance on 

incomplete or inaccurate FSS item information maintained on the General Service 

Administration (GSA) Advantage website or their local information systems. 

Moreover, we found that the VISN and medical facility purchasing staff’s lack of 

knowledge and experience using the FSS also made them more inclined to consent to the 

end users’ item preferences and to procure items on the open market without checking to 

determine if identical or comparable items were available on the FSS. Some purchasing 

staff also said they did not use the FSS because they did not have time to perform 

independent checks on the FSS for comparable items. 

VA Office of Inspector General ii 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Consequently, our review of 948 medical equipment and supply items representing 

7,098 open market purchases valued at about $7.89 million identified 185 items 

(20 percent), or 1,667 purchases (23 percent), where use of the FSS instead of the open 

market would have reduced medical facilities costs by about $433,000. Based on our 

analytical results and statistical projections, increased use of the FSS and the 

corresponding decrease in unnecessary open market purchases would help VHA reduce 

its medical equipment and supply costs an estimated $8.2 million annually, or $41 

million over 5 years. 

Stronger Management Controls Over Open Market Purchases Needed. OAL&C, 

P&LO, the VISNs, and medical facility managers did not effectively monitor open 

market procurements to ensure optimal use of the FSS. VA Directive and Handbook 

7408.1, “Requesting Waivers From the Requirement To Use VA Federal Supply 

Schedules”, specifically prohibits the procurement of health care items under local 

contracts and the open market, and it prescribes an extensive review and approval process 

to establish the presence of a compelling clinical need before an FSS waiver is granted. 

At a minimum, VA policy requires the medical facilities’ chiefs of staff to review and 

approve FSS waivers prior to the forwarding of the requests through VHA’s Office of 

Clinical Logistics in P&LO to the NAC Executive Director for final approval. In 

addition, the policy requires the NAC Executive Director to send copies of all approved 

and disapproved FSS waiver requests to the OAL&C Executive Director and the Office 

of Logistics within P&LO on a quarterly basis. Nevertheless, our review disclosed that 

the 21 VISNs and 199 medical facilities included in our sample had not submitted any 

FSS waiver requests for these purchases. 

None of the VISNs and medical facilities we reviewed had FSS waiver policies and some 

staff did not obtain waivers because they believed purchases below the $3,000 micropurchase threshold did not require waivers. Subsequently, the NAC received only one 

FSS waiver request during our 12-month review period; yet, neither OAL&C nor P&LO 

officials noticed that they had not received copies of any FSS waivers requests. 

Similarly, they did not notice the national FSS waiver approval process had lapsed when 

the NAC Executive Director’s authority to approve FSS waivers expired in June 2007. 

VA’s ineffective management of the FSS waiver process led to the unnecessary open 

market procurements of medical equipment and supplies. 

Conclusion 

VHA needs to revise its FSS waiver processes to strengthen management controls over 

open market purchases. This will ensure medical facilities purchase medical equipment 

and supplies available on the FSS in accordance with Federal regulations and VA policy. 

In addition, the VHA staff needs training on research methods to identify medical 

equipment and supply items available on the FSS, and the appropriate review and 

approval processes to use FSS waivers to meet a compelling clinical needs. If medical 

facilities had purchased medical equipment and supply items on the FSS instead of the 

VA Office of Inspector General iii 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

open market, VA could reduce purchasing cost by about $8.2 million annually or 

approximately $41 million over 5 years. 

Recommendations 

1. We recommended that the Under Secretary for Health establish specific procedures 

and monitoring mechanisms to ensure medical equipment and supply item open 

market purchases are procured in accordance with VA policy. 

2. We recommended that the Under Secretary for Health, in consultation with the 

OAL&C Executive Director, develop and provide contracting and purchasing staff 

training on available methodologies and research tools that can be used to identify 

FSS medical equipment and supply items. 

3. We recommended that the Under Secretary for Health, in consultation with the 

OAL&C Executive Director, provide appropriate contracting and purchasing staff 

refresher training on the mandated use of FSS Group 65 for medical equipment and 

supplies and on FSS waiver requirements when purchasing medical equipment and 

supply items on the open market. 

4. We recommended that the OAL&C Executive Director, in consultation with the 

P&LO, review and modify VA’s current FSS waiver process to ensure that open 

market purchases are effectively monitored and controlled in accordance with VA 

policy and Federal regulations. 

Management Comments and OIG Response 

The Acting Under Secretary for Health and the OAL&C Executive Director concurred with 

our findings and recommendations. VHA’s P&LO agreed to enforce Quality Assurance 

Reviews on a semi-annual basis and target and review open market medical equipment 

and supply purchases on a representative sample basis to ensure that open market 

purchases are procured according to VA policy. Additionally, P&LO, with the assistance 

of OAL&C and NAC, agreed to develop a training guide to assist the field with 

identifying FSS medical equipment and supply items. P&LO, with the assistance of 

OAL&C, will also identify regulatory contracting FSS 65 and FSS waiver requirements 

and provide them to field level contract entities to incorporate into training programs. 

OAL&C and VHA also reviewed the FSS waiver process and concluded that the FSS 

waiver process in VA Handbook 7408.1 did not need to be revised because it provided 

sufficient controls and appropriate approval levels for open market purchases. But, they 

acknowledged the NAC needed to initiate outreach efforts and training programs to 

educate VA contracting professionals on the advantages and appropriate uses of the FSS. 

VA Office of Inspector General iv 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

VA Office of Inspector General v 

The planned corrective actions for the recommendations are responsive to our concerns. 

We will close the recommendations when all proposed actions have been completed by 

VHA P&LO and OAL&C. Appendix D contains the full text of the Acting Under 

Secretary’s comments. Appendix E contains the full text of the OAL&C Executive 

Director’s comments. 

(original signed by:)

 BELINDA J. FINN 

 Assistant Inspector General 

 for Auditing 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Introduction 

Purpose 

The OIG conducted this audit to evaluate open market purchases made from FSS 65 IIA 

medical equipment and supply vendors. The objectives of the audit were to determine if 

VHA medical facilities purchased items on the open market when identical or like items 

were available for purchase through an existing FSS at a lower price. We were also to 

assess the effectiveness of controls over VHA open market procurements. 

Background 

VA Acquisition Methods, Policies, Laws, and Regulations. As one of the nation’s 

largest health care systems, VA uses various acquisition methods such as the open 

market, local and regional contracts, national contracts, and FSSs to procure 

pharmaceuticals, medical equipment, and supplies. VA’s longstanding policy has been to 

encourage its medical facilities to use the most cost-effective procurement method 

available to procure services and supplies. For example, use of the FSS, where contracts 

are negotiated to leverage the Government’s buying power and establish fair and 

reasonable prices, is preferable to using the open market where individual facilities 

purchase items directly from vendors, often at higher prices. 

VA’s 2002 Procurement Reform Task Force Report further clarified this policy by 

mandating the use of a three-tier purchasing hierarchy to reduce open market 

procurements. Based on this hierarchy, VHA medical facilities should only use local 

contracts and the open market as their last options when making purchases. However, 

under 38 USC 8125, “Procurement of Health Care Items”, medical facilities may procure 

health care items, including any item listed in Federal Supply Classification Group 65, on 

local contracts, if the procurements are needed to furnish healthcare services effectively. 

I.e., in the case of an emergency, or if the local procurements are demonstrably more 

cost-effective, VHA has a process to waive this requirement and purchase items by other 

means. Under this regulation, the Department may purchase no more than 20 percent of 

its total healthcare items under local contracts. The Secretary has the discretion to raise 

the threshold for local contract procurements up to 30 percent, if it is necessary for VA to 

furnish healthcare services effectively, or to conduct its research or education programs. 

VA Health Care Purchases and FSS 65 IIA. In FY 2008, VA reported $2.9 billion in 

health care purchases with about $369 million (13 percent) made on the open market. Of 

the $2.9 billion health care purchases VHA made, an estimated $878 million (30 percent) 

of the purchases were made from vendors who participated in the FSS 65 IIA program. 

Under FSS 65 IIA, the NAC solicits, awards, and administers VA’s FSS with vendors to 

leverage VA’s buying power and establish “fair and reasonable” pricing for medical 

equipment and supplies. However, these vendors are not required to include all of their 

items on the FSS. Therefore, medical facilities may use a combination of local and 

regional contracts, the open market, and the FSS to purchase equipment and supplies. 

VA Office of Inspector General 1 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

VA Office of Inspector General 2 

The Procurement and Logistics Program. VA’s national program office for 

procurement and logistics is located in VHA’s P&LO. P&LO is responsible for: 

• Developing acquisition and logistics best practices; 

• Monitoring VHA local activity acquisition and logistics; 

• Ensuring compliance with established VA and VHA policies and procedures; 

• Implementing a comprehensive standardization plan for healthcare supplies and 

equipment; and 

• Improving VHA’s supply chain management. 

P&LO has chief logistics officers and a network of contract managers located at the 

21 VISNs to manage local-level acquisitions and logistics operations for VHA’s 

1,048 hospitals and clinics. P&LO also oversees and manages the Government Purchase 

Card program for VHA medical facilities and program offices. 

The Office of Acquisition, Logistics, and Construction. With annual expenditures of 

more than $10.3 billion for supplies and services, including construction, OAL&C is one 

of the largest procurement and supply agencies in the Federal Government. Within 

OAL&C, the Office of Acquisitions awards and administers national contracts to meet 

VA facility equipment and supply needs, develops VA-wide acquisition policy, and 

manages mandatory acquisition training and continuing education programs for VA 

procurement staff. OAL&C also operates VA's Contracting Officer Certification 

Program and is responsible for warranting all of VA’s contracting officers. 

Within the Office of Acquisition, the NAC solicits, awards, and administers VA's FSS 

and National Contract Programs including the acquisition and direct delivery of 

pharmaceuticals; medical, surgical, and dental supplies; and high technology medical 

equipment. In June 2005, the Office of Acquisition delegated the responsibility for 

reviewing and approving all VISN or medical facility FSS requests to waive the use of 

the FSS and procure medical equipment and supplies through local contracts and the 

open market to the NAC Executive Director. When this delegation of authority expired 

in June 2007, the responsibility for approving the waivers reverted back to the OAL&C 

Executive Director. 

Prior OIG Reviews. In 2004, the OIG’s Audit of VA Medical Center Procurement of 

Medical, Prosthetic, and Miscellaneous Operating Supplies (Report No. 02-01481-118, 

March 31, 2004), found that VHA medical facilities could reduce their supply costs by 

following VA’s three-tiered purchasing hierarchy and by selecting the best procurement 

sources, such as FSSs. The audit recommended VHA fully implement the three-tier 

purchasing hierarchy to ensure the increased use of national contracts and blanket 

purchase agreements (BPAs)1

. More recently, the OIG’s Audit of the Acquisition and 

 

1

 In FSS vendor BPAs, customers commit to purchase specified quantities or dollar values for an agreed period of 

time (not to exceed the length of the FSS contract) in exchange for additional price discounts, programs, or services. 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Management of Selected Surgical Device Implants (Report No. 06-03677-221, September 

28, 2007) found that VHA could reduce its medical supply costs by as much as 

$21.7 million over 5 years if it used national contracts and BPAs, instead of the open 

market to purchase selected surgical device implants. 

Scope and Methodology 

To address the audit objectives, we identified and reviewed applicable Federal 

Acquisition Regulation (FAR) and VA and VHA policies and procedures related to FSS 

and open market medical equipment and supply purchases. We interviewed VA, VHA, 

OAL&C, and P&LO program officials and local VISN and medical facility purchasing 

staff responsible for medical equipment and supply procurement practices and national 

and local management controls over FSS usage and open market procurements. We 

conducted our audit work from July 2008–January 2009. 

We developed a two-stage statistical sampling methodology to collect open market 

purchase data from selected FSS vendors because VA lacks a national database that could 

be used to readily identify open market medical equipment and supply purchases. To 

develop our population, we selected FSS medical supply vendors who reported at least 

$500,000 in annual FSS sales to the NAC during calendar year (CY) 2007 and who 

included a maximum of 95 percent of their product lines on the FSS. This provided a 

population of 73 medical supply vendors with $411 million in reported VHA FSS sales 

during the period, May 1, 2007–April 30, 2008, from which we randomly sampled 

medical equipment and supply items and related purchase transactions. Because we 

obtained data on only a portion of all VA FSS 65 IIA vendors, our methodology may 

understate the potential cost savings of maximizing the appropriate use of the FSS. 

Use of vendor-provided automated data, instead of VA data, to conduct this audit meant 

that we could not assess the internal controls of the individual vendor data systems that 

generated the sales data or the completeness of all of the reported data. However, from 

comparisons of the vendors’ automated sales data with information available in the FSS 

contract listings, medical facility purchase orders and invoices, and VA’s Financial 

Management System; we concluded that the vendors’ reported sales data were 

sufficiently reliable for us to meet our audit objectives. 

Our assessment of internal controls focused on those controls relating to our audit 

objectives. We conducted this audit in accordance with generally accepted government 

auditing standards. These standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusion based on our audit objectives 

(see Appendix B, for a detailed discussion of audit scope and methodology). 

VA Office of Inspector General 3 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Results and Conclusions 

Strengthening Open Market Procurement Controls Will 

Reduce Medical Equipment and Supply Costs 

VHA medical facilities are purchasing medical equipment and supplies on the open 

market when comparable items are available for less on the FSS. VA policies and 

Federal regulations pertaining to the procurement of health care items and the FSS 

require the use of the FSS to procure medical equipment and supplies unless an 

exemption applies, such as in the case of a compelling clinical need. Despite these 

requirements, VISN and medical facility purchasing staff procured items on the open 

market, which were available for less on the FSS, because they lacked the knowledge, 

information, and proper tools to use the FSS effectively, or they accommodated end 

users’ item preferences. 

National and local management controls established to monitor open market purchases 

and ensure compliance with VA’s three-tier purchasing hierarchy were not effective. 

Local VISN and medical facility staff did not require staff to follow the open market 

justification, review, and approval process outlined in VA policy and Federal regulations. 

In addition, P&LO and OAL&C did not effectively oversee the FSS waiver process and 

open market procurements to ensure items were only purchased on the open market when 

absolutely necessary. Based on our review results and statistical projections, VHA could 

reduce its medical supply costs by an estimated $8.2 million annually or $41 million over 

5 years if it strengthened its open market procurement management controls. 

Federal Supply Schedules Were Not Effectively Used To Purchase Medical 

Equipment and Supplies. VISN and medical facility managers and staff needed to use 

FSS 65 IIA more effectively to purchase medical equipment and supplies. Our review of 

948 health care items representing 7,098 open market purchases totaling about 

$7.89 million identified 185 items or 1,667 purchases where use of the FSS instead of the 

open market would have reduced costs by $433,000. Consequently, we project that VHA 

could reduce its medical equipment and supply costs by an estimated $8.2 million 

annually or $41 million over 5 years if it increased its use of the FSS and minimized 

unnecessary open market purchases. Table 1, on the next page, shows our review results 

by VISN (see Appendix B, for a detailed discussion of audit scope and methodology). 

We found that medical facilities were routinely purchasing common equipment and 

medical supply items such as surgical drapes, scrubs, compression stockings, and hip 

protectors on the open market from the FSS 65 IIA vendors, even when items were 

available for less on the FSS. Of the 1,667 items that could have been purchased for less 

through the FSS, medical facilities purchased 293 (18 percent) items on the open market 

from an FSS vendor even when the same vendor listed the same item or a comparable 

item on the FSS for less. 

VA Office of Inspector General 4 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Table 1. Estimated Cost Savings From Using FSS 65 IIA Instead of the 

Open Market 

VISN 

Medical 

Equipment 

& Supply 

Item Codes 

Number of 

Purchases 

Related to 

Item Code 

Open Market 

Cost 

FSS 

Purchase 

Cost Cost Savings 

1 18 46 $26,940.06 $19,631.63 $7,308.43 

2 19 66 11,457.64 8,595.60 2,862.04 

3 17 109 37,049.85 27,967.11 9,082.74 

4 19 159 55,368.01 40,316.14 15,051.87 

5 21 48 153,578.77 51,652.26 101,926.51 

6 26 145 142,288.66 98,765.66 43,523.00 

7 34 125 36,212.94 24,885.57 11,327.37 

8 30 144 184,652.41 150,268.80 34,383.61 

9 26 122 152,496.66 52,362.12 100,134.54 

10 10 45 24,738.39 18,963.74 5,774.65 

11 17 46 5,979.44 4,482.18 1,497.26 

12 9 15 23,499.96 10,615.32 12,884.64 

15 23 69 22,003.81 14,969.96 7,033.85 

16 24 135 68,302.02 47,303.78 20,998.24 

17 7 22 155,248.46 135,590.21 19,658.25 

18 13 67 15,197.72 11,983.44 3,214.28 

19 25 97 33,397.35 20,902.96 12,494.39 

20 18 35 18,069.56 13,401.35 4,668.21 

21 19 28 6,838.42 4,693.93 2,144.49 

22 14 62 37,024.80 27,462.50 9,562.30 

23 32 82 22,151.27 14,944.52 7,206.75 

Totals: 1,667 $1,232,496.19 $799,758.77 $432,737.42 

For example, two medical facilities procured 5,172 patient gowns on the open market at a 

total cost of $16,224 from a FSS vendor, even though the same FSS vendor offered the 

identical gowns in a different pattern on the FSS. If the patient gowns had been 

purchased through the FSS, the facilities would have paid a total of only $12,206, a cost 

savings of $4,018 ($16,224 - $12,206). Table 2 provides examples of some of the price 

differences identified by our review. 

VA Office of Inspector General 5 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Table 2. Examples of Open Market and FSS/BPA Price 

Differences 

Unit Price Example Item 

Open Market FSS/BPA 

Price Difference 

1 Vital Sign Monitor $5,623 $5,019 $604 

2 Overbed Table 583 119 464 

3 Surgical Stapler 675 304 371 

4 Knee Brace 400 320 80 

5 Roticulator 187 107 80 

Total: $7,469 $5,869 $1,600 

Reasons for Open Market Purchases. Several factors affected medical facilities’ open 

market procurement decisions, such as the purchasing staff’s lack of knowledge of FSS 

requirements and their inability to use VA automated databases and search tools 

effectively to identify items on contract. In many cases, purchasing staff incorrectly 

assumed that use of the FSS was not required if the purchase met the $3,000 micropurchase threshold. In addition, purchasing staff sometimes mistakenly believed they 

had purchased items from the FSS, when they really had not, because they relied on 

inaccurate FSS product information obtained from either the FSS vendors or the 

facilities’ Veterans Health Information Systems and Technology Architecture master data 

files. Inaccuracies in the master data occurred because local staff responsible for 

inputting the FSS item information erroneously assumed that all of the items sold by the 

FSS vendors were included on the FSS. 

The following discussion of Example 1 from Table 2 illustrates how some purchasing 

staff bought items on the open market even though they thought they had used the FSS. 

The VA South Texas Healthcare System (HCS) purchasing staff asked an 

FSS vendor’s customer representative to check whether or not the vendor’s 

vital sign monitor was on the FSS. After a customer representative 

incorrectly indicated that the vendor’s vital sign monitor was on the FSS, 

the purchasing staff procured 24 vital sign monitors at the FSS vendor’s 

open market price of $5,623. If the purchasing staff had conducted 

independent research using the NAC Contract Catalog Search Tool (CCST) 

and not relied on the vendor’s information, they would have identified a 

comparable monitor available on the FSS from another vendor for $5,019: 

$604 less than vendor’s open market price. As a result, the medical facility 

paid $134,952 ($5,623 x 24) for the monitors when comparable monitors 

were available for $120,456 ($5,019 x 24), or a total of $14,496 less, on the 

FSS. 

In some instances, purchasing staff said they tried to research items available on the FSS. 

However, they had limited success because they used the GSA Advantage website, which 

VA Office of Inspector General 6 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

does not contain all of the FSS items available for purchase. In July 2007, GSA required 

FSS vendors to list all of their available FSS items on the GSA Advantage website by 

December 31, 2008, but GSA does not monitor the information on the website to ensure 

that the vendors update their FSS item and price lists on a regular basis. Our comparative 

analysis of the NAC CCST FSS item catalogues and GSA Advantage information for the 

20 vendors in our sample determined that, on average, GSA Advantage only listed about 

48 percent of the items shown in the vendors’ NAC CCST FSS items catalogues. In 

addition, 8 of the 20 (40 percent) vendors did not list any of their FSS items on the GSA 

Advantage website as of late December 2008. 

In our opinion, use of available VA automated databases and search tools, such as VHA’s 

Product Databank and the NAC CCST, would provide more complete and accurate FSS 

item information than GSA Advantage because the tools are updated and monitored on a 

regular basis for completeness and accuracy. These VA resources helped us identify 

comparable, lower-priced FSS items when we conducted our item and price comparisons, 

but staff that used GSA Advantage either were not aware of them or had chosen not to 

use them. 

Although most of the open market purchases we reviewed occurred due to the purchasing 

staff’s lack of knowledge and experience in using the FSS, some occurred as the result of 

the staff’s willingness to accommodate end users’ item preferences. In some instances, 

contracting and purchasing staff did not feel they could question or even suggest a 

comparable item on the FSS to end users even when the end users lacked justifications 

for the open market purchase of the preferred items. Consequently, purchasing staff 

tended to satisfy the end users requests and to purchase the requested items on the open 

market without checking if identical or comparable items were on the FSS. 

At one medical facility, a purchasing agent stated that she purchased laparoscopic items 

on the open market from a specific vendor due to a physician’s stated preference. 

However, the physician stated that he could use comparable laparoscopic items listed on 

another FSS vendor’s BPA and that he was unaware that the items had been procured on 

the open market while the BPA was in place. Finally, some purchasing staff simply 

stated that they did not have time to perform an independent check of the FSS for 

comparable items. Open market purchasing management control deficiencies identified 

at each site we visited are presented in Appendix A. 

Management Controls Over Open Market Purchases Need To Be Strengthened. 

OAL&C, P&LO, and VISN and medical facility managers did not effectively monitor 

open market procurements and ensure optimal use of the FSS. VA’s policy on requesting 

waivers from using the FSS specifically prohibited the procurement of health care items 

under local contracts and the open market. The policy prescribes an extensive review and 

approval process before an FSS waiver could be granted. It requires the medical facility 

chief of staff to review and approve FSS waiver requests, forward the request through the 

VHA Clinical Logistics Office within P&LO to the NAC’s Executive Director to review 

and approve the waivers and to send copies of the approved or disapproved waivers 

VA Office of Inspector General 7 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

requests to the OAL&C and P&LO on a quarterly basis. Nevertheless, OAL&C and 

P&LO officials did not effectively monitor the implementation and operation of the 

waiver process, and thus, were not aware that the VISNs and medical facilities were not 

following FSS waiver processes when they purchased items on the open market instead 

of the FSS. Similarly, they were unaware that VA’s national FSS waiver approval 

process had completely lapsed when NAC’s Executive Director’s delegation of authority 

to approve the FSS waivers expired without renewal in June 2007. 

FSS Waiver Requirements. Under VA Handbook and Directive 7408.1, “Requesting 

Waivers from the Requirement to Use VA Federal Supply Schedules”, the OAL&C 

Executive Director delegated responsibility to the NAC Executive Director for the 

authorization and approval of medical facility FSS waiver requests. The Handbook and 

Directive required each medical facility (or VISN on behalf of all medical facilities in 

their network) to establish local procedures for the processing of FSS waiver requests if 

they wished to purchase goods and services available on the FSS on the open market or 

through local contracts. Before the waiver requests could be forwarded to the NAC’s 

Executive Director, they had to be reviewed and approved at a level no lower than the 

medical facility’s chief of staff. 

The Directive also stated that the decision to deviate from the FSS should be “evidencebased and timely” and that neither “single facility staff preference nor the appearance of 

lower cost to a specific medical facility is sufficient justification” for deviating from the 

use of the FSS. Finally, the Handbook also required the NAC Executive Director to 

submit copies of approved or disapproved requests for waivers to OAL&C and P&LO on 

a quarterly basis. Neither the Handbook nor Directive explicitly assigned either office 

responsibility for monitoring the effectiveness of the FSS waiver process. 

National Oversight for FSS Purchases and Waivers. VA lacks an effective open 

market procurement monitoring system to limit unnecessary open market purchases and 

to ensure VISNs and medical facilities use the FSS as required. Our review disclosed 

that the 21 VISNs and 199 medical facilities included in our sample had not obtained any 

FSS waivers. The NAC confirmed that it received only one FSS waiver request from a 

medical facility during the period May 1, 2007 to April 30, 2008, for an equipment item 

that was not part of our statistical sample. However, neither OAL&C nor P&LO officials 

noticed that the VISNs and medical facilities were routinely bypassing the FSS waiver 

request process or that the national FSS waiver approval process had lapsed. 

In June 2007, the NAC Executive Director’s authority to approve FSS waiver requests 

expired, thus making the OAL&C Executive Director technically responsible for the 

approval of all FSS waivers. However, the OAL&C Executive Director did not become 

aware of the expired delegation and take action to restore the NAC Executive Director’s 

FSS waiver approval authority until the OIG contacted him during the audit. 

Local FSS Procurement Oversight Processes and Waivers. At the local level, the VISNs 

and medical facilities generally lacked local policies implementing a review, approval, 

and justification process for the open market purchase of items available on the FSS. 

VA Office of Inspector General 8 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

None of the VISNs and medical facilities we contacted or visited had implemented a 

local FSS waiver process as required by VA policy. In addition, they had inaccurate 

information about the volume and value of their FSS and open market purchases and 

lacked documentation showing that their open market purchases had been made to meet 

compelling clinical needs. The following example demonstrates some of the deficiencies 

found in the VISNs’ and medical facilities’ monitoring of open market purchases and use 

of the FSS. 

VA Tennessee Valley HCS had no local policies in place for the requirement to 

use the FSS or review open market procurements, as required by VA policy. The 

HCS purchased a total of 123 items valued at $624,139 without obtaining FSS 

waivers because the logistics manager did not believe the waivers were required 

for any medical supply purchases made after December 2007. In addition, the 

facility’s purchasing officials were unaware until our visit that their master data 

files contained erroneous FSS product information and that they had made 

30 purchases totaling $51,291 (46 percent of the items we reviewed at the 

facility) on the open market instead of through the FSS. The HCS purchased at 

least 28 items on the open market at a cost of $247,974 when comparable or 

identical items could have been purchased on the FSS for $195,332 or 

$52,642 less. 

When these issues were discussed with OAL&C and P&LO officials, they stated that 

VISN and medical facility purchasing staff had received basic training on FAR and 

simplified acquisitions procedures, but that they lacked specialized training on the proper 

use of the FSS and open market procurements. OAL&C and P&LO officials also 

acknowledged that they had not performed analyses to evaluate the effectiveness of VA’s 

FSS waiver process in decreasing VA’s open market procurements. 

While they acknowledged the weaknesses in the FSS waiver process, NAC FSS officials 

felt they had effectively disseminated information about how to use the FSS and the 

available FSS research tools through the NAC FSS website and through meetings with 

P&LO managers. Similarly, P&LO management officials felt local contract and 

purchasing staff should have been aware of the need to adhere to VA’s purchasing 

hierarchy and to properly use the FSS because of guidance provided during P&LO 

conference calls and the course of daily operations. 

Conclusion 

VA’s current FSS waiver process and decentralized open market procurement monitoring 

processes have not ensured the effective use of the FSS to procure medical equipment 

and supplies and a reduction in unnecessary open market purchases. VISN and medical 

facility purchasing staff need to be trained on how to identify medical equipment and 

supplies items on the FSS effectively and properly request waivers when purchases 

cannot be reasonably made through the FSS. Moreover, national and local controls over 

open market procurement and the FSS waiver process need to be strengthened to ensure 

VA Office of Inspector General 9 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

that VISNs and medical facilities purchase medical equipment and supplies in accordance 

with Federal regulations and VA policy. Improved oversight and use of the FSS would 

reduce unnecessary open market medical supply and equipment purchases and VA’s 

health care item costs by about $8.2 million annually or $41 million over 5 years. 

Recommendations 

1. We recommended that the Under Secretary for Health establish specific procedures 

and monitoring mechanisms to ensure medical equipment and supply item open 

market purchases are procured in accordance with VA policy. 

2. We recommended that the Under Secretary for Health, in consultation with the 

OAL&C Executive Director, develop and provide contracting and purchasing staff 

training on available methodologies and research tools that can be used to identify 

FSS medical equipment and supply items. 

3. We recommended that the Under Secretary for Health, in consultation with the 

OAL&C Executive Director, provide appropriate contracting and purchasing staff 

refresher training on the mandated use of FSS Group 65 for medical equipment and 

supplies and on FSS waiver requirements when purchasing medical equipment and 

supply items on the open market. 

4. We recommended that the OAL&C Executive Director, in consultation with the 

P&LO, review and modify VA’s current FSS waiver process to ensure that open 

market purchases are effectively monitored and controlled in accordance with VA 

policy and Federal regulations. 

Management Comments and OIG Response 

The Acting Under Secretary for Health and the OAL&C Executive Director concurred with 

our findings and recommendations. VHA P&LO agreed to enforce Quality Assurance 

Reviews on a semi-annual basis and target and review open market medical equipment 

and supply purchases on a representative sample basis to ensure that open market 

purchases are procured according to VA policy. Additionally, VHA P&LO, with the 

assistance of OAL&C and NAC, agreed to develop a training guide to assist the field 

with identifying FSS medical equipment and supply items. VHA P&LO, with the 

assistance of OAL&C, will also identify regulatory contracting FSS 65 and FSS waiver 

requirements and provide them to field level contract entities to incorporate into training 

programs. 

Further, OAL&C met with VHA to review the FSS waiver process and concluded that 

there are sufficient controls and an appropriate level of approvals in place to ensure that 

open market purchase are effectively monitored and controlled. Thus, there was no 

modification to VA Handbook 7408.1. 

The Acting Under Secretary for Health and the OAL&C Executive Director concurred with 

our findings and recommendations. The planned corrective actions for the 

VA Office of Inspector General 10 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

VA Office of Inspector General 11 

recommendations are responsive to our concerns. We will close the recommendations 

when all proposed actions have been completed by VHA P&LO and OAL&C. Appendix 

D contains the full text of the Acting Under Secretary’s comments. Appendix E contains 

the full text of the OAL&C Executive Director’s comments. 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix A 

Summary of Open Market Purchase Management 

Control Deficiencies at Medical Facilities Visited 

Although most of the open market purchases we reviewed occurred due to the purchasing 

staff’s lack of knowledge and experience in using the FSS, some occurred as the result of 

the staff’s willingness to accommodate end users’ item preferences. In some instances, 

contracting and purchasing staff did not feel they could question or even suggest a 

comparable item on the FSS to end users even when the end users lacked justifications 

for the open market purchase of the preferred items. Consequently, purchasing staff 

tended to satisfy the end users requests and to purchase the requested items on the open 

market without checking if identical or comparable items were on the FSS. 

Table 3. Summary of Management Control Deficiencies 

VISN Medical Facility 

VISN 

Internal 

Controls 

Medical 

Facility 

Internal 

Controls 

FSS 

Waivers

Awareness 

and Use of 

FSS Item 

Research 

Tools 

Knowledge & 

Awareness of 

FSS 

Procurement 

Requirements

Purchased 

Items on 

Open 

Market 

Instead of 

FSS 

7 

Omaha Division - 

Nebraska Western 

Iowa 

9 9 9 9 9 9

8 Miami 9 9 9 9 9 9

9 Tennessee ValleyNashville Campus 9 9 9 9 9 9

17 South Texas 9 9 9 9 9 9

21 San Francisco 9 9 9 9 9 9

22 Southern Nevada 9 9 9 See Note See Note 9

Note: VISN 22 Head Contracting Activity purchasing staff were aware of FSS 

procurement requirements and P&LO and NAC FSS item research tools, but medical 

facility procurement staff at VISN 22 medical facilities lacked the same awareness.

VA Office of Inspector General 12 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix B 

VA Office of Inspector General 13 

Scope and Methodology 

To address the audit objectives, we identified and reviewed applicable Federal 

procurement regulations and VA and VHA policies and procedures related to FSS and 

open market medical equipment and supply purchases. We interviewed VA, VHA, and 

P&LO program officials and local VISN and medical facility purchasing staff about 

medical equipment and supply procurement practices and national and local management 

controls over FSS usage and open market procurements. We conducted our audit work 

from July 2008–January 2009. 

We developed a two-stage statistical sampling methodology to collect open market 

purchase data from selected FSS 65IIA vendors because VA lacks a national database 

that can be readily used to identify open market medical and equipment supply purchases. 

We selected FSS medical equipment and supply vendors who reported at least $500,000 

in annual FSS sales to the NAC during CY 2007 and who included a maximum of 

95 percent of their product lines on the FSS. This provided a population of 73 medical 

supply vendors with $411 million in reported VHA FSS sales. We then randomly 

selected 948 medical equipment and supply items representing 7,098 purchases from 

20 of the 73 vendors for review. 

For each item purchased on the open market from our 20 selected FSS vendors, we 

reviewed product specifications and interviewed medical supply and equipment 

manufacturers and end users at the medical facilities we visited. We did this to identify 

identical or comparable (functionally equivalent) items available on the FSS or BPA at 

the time of the purchase. If a comparable, but lower priced item, was identified on an 

FSS or BPA, we compared the prices of the sample item and the lowest priced 

comparable item in order to calculate the cost benefits of using the FSS instead of the 

open market. 

We used multiple sources such as a NAC FSS item web-based search tool, product 

specifications, contract information, and interviews with medical facility staff to analyze 

each of the 948 items represented in our sample and to determine whether less costly 

identical or comparable items were available on the FSS at the time each open market 

purchase was made. We also conducted six site visits at VHA medical facilities to 

facilitate the completion of the item analyses and assess local controls and procurement 

practices for FSS and open market purchases. Table 4, on the next page, shows the total 

number and value of the open market purchases reviewed at each of the sites we visited. 

We relied on vendor provided automated data instead of VA data to conduct this audit 

because VA does not have an automated data system that can identify open market 

medical equipment and supply purchases. This methodology meant that we could not 

assess the internal controls of the individual data systems vendors used to generate the 

open market data and the completeness of all of the reported data. However, we assessed 

the accuracy and reliability of the vendors’ open market purchase data by comparing the 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix B 

VA Office of Inspector General 14 

data with information available in the FSS contract listings, medical facility purchase 

orders and invoices, and VA’s Financial Management System. Based on these reviews 

and assessments, we concluded that the automated vendor-provided open market 

purchase data were sufficiently reliable to meet the objectives of this audit. 

Table 4. Open Market Medical Equipment and Supply Purchases 

Reviewed During OIG Site Visits 

Reviewed 

VISN Medical Facility Item 

Codes 

Line 

Items 

Open Market 

Sales 

Total 

Reported 

Open Market 

Sales 

7 

Omaha DivisionNebraska Western 

Iowa 

19 66 $200,501 $522,568 

8 Miami 33 117 139,239 387,079 

9 Tennessee Valley –

Nashville Campus 28 65 247,974 624,139 

17 South Texas 24 43 241,863 898,691 

21 San Francisco 29 74 154,752 415,382 

22 Southern Nevada 11 44 2,352 15,998 

Totals: 144 409 $986,681 $2,863,857 

Sampling Methodology 

To determine whether medical facilities are purchasing medical equipment and supplies 

from the open market when identical or comparable items are available for less on an 

existing FSS, we developed a database of purchases from medical equipment and supply 

vendors to identify the population and sample. 

Population 

The population consisted of 73 FSS 65 IIA vendors with annual FSS sales over $500,000 

as of December 31, 2007, with less than 95 percent of their items on the FSS. The 

73 vendors reported $411,296,765 in annual FSS sales for medical equipment and 

supplies to the VA. The 20 vendors we randomly selected for review had 34,122 open 

market purchases totaling $30,840,080 for the 12-month period May 1, 2007-

April 30, 2008. 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix B 

VA Office of Inspector General 15 

Sampling Design 

We used a two-stage variable random sample that took into consideration the number of 

FSS vendors and their open market transactions. In the first stage, we selected a simple 

random sample from the list of 73 vendors to select 30 vendors (20 vendors for review 

with 10 spares). For the second stage, we selected a simple random sample from a list of 

unique items codes for each of the 20 randomly selected vendors. We selected 50 items 

per vendor to review. Three of the 20 selected vendors who met the initial selection 

criteria did not have 50 unique item codes for review. For these three vendors, we 

reviewed all of the unique item codes associated with the open market purchases (22, 30, 

and 46 item codes representing 38, 50, and 292 purchases respectively). 

In all, we reviewed 948 item codes representing 7,098 open market purchase transactions 

valued at $7,893,858. We considered the cost of an item for a reviewed purchase to be in 

error if the medical facility procured the item on the open market when an identical or 

comparable item was available for less on a VA national contract, FSS, or BPA. The 

following table summarizes the sample selected for this audit. 

Table 5. Open Market Medical Equipment and Supply Sample Selection 

Vendor Open Market 

Sales 

All 

Transactions 

Item 

Codes 

Sample 

Size 

Sample 

Transactions 

Sample Open 

Market Sales 

1 $1,347,312 184 69 50 131 $976,954 

2 2,414,166 656 180 50 167 402,403 

3 186,416 50 30 30 50 186,416 

4 152,435 591 245 50 69 17,505 

5 320,704 1304 127 50 334 89,874 

6 1,162,099 2472 200 50 723 264,396 

7 245,182 423 81 50 233 107,912 

8 904,080 378 60 50 339 752,483 

9 725,213 1032 565 50 104 56,674 

10 842,769 6085 369 50 1195 160,360 

11 191,779 652 91 50 263 51,451 

12 10,565,737 8872 835 50 532 656,912 

13 268,332 2349 269 50 377 30,574 

14 519,501 1720 244 50 430 131,770 

15 7,324,312 2104 339 50 646 2,251,840 

16 657,969 1247 89 50 773 444,544 

17 1,769,232 3516 524 50 300 148,362 

18 245,367 157 72 50 102 165,955 

19 234,029 38 22 22 38 234,029 

20 763,445 292 46 46 292 763,445 

Total $30,840,080 34,122 4457 948 7098 $7,893,858 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix B 

VA Office of Inspector General 16 

Estimation Methodology 

The total value of the 948 sampled unique items was $7,893,858. Of the 948 sampled 

items, we found 185 (19.5 percent) representing 1,667 open market purchases totaling 

$432,737 that VHA could have made on the FSS. 

Weights 

We projected the sample results to represent population projections by calculating 

sampling weights and summing the weights for each projection. Since the sample was a 

two-stage sample, weights were computed as the product of the inverse of the probability 

of selection for each stage of sampling. The first-stage weighting factor was the inverse 

of the probability of selection of 20 out of 73 vendors (73 ÷ 20 = 3.65). The second-stage 

weights were different for each vendor since the total item codes were different. The 

second-stage weights were computed the same way as the first-stage weights and ranged 

from 3.65 (for the three vendors where all item codes were sampled) to 61 for the vendor 

with the most item codes. 

Projections and Margins of Error 

The following table (Table 6) shows population projections and their associated margins 

of error. Margins of error were computed based on a 90 percent confidence interval. The 

population projection plus or minus its associated margin of error gives the lower and 

upper boundaries of the 90 percent confidence interval. Note that we computed the 

variance for each population projection using a jackknife replication variance calculation 

technique to account for the multi-stage sample design and unequal sampling weights. 

Table 6. Population Projections and Margins of Error 

Projection Margin of 

Error Lower 90% CI Upper 90% CI Sample Size 

No Error 9,198 600 8,599 9,798 668 

Error 7,070 839 6,231 7,908 280 

Total Item Codes 16,268 848 15,420 17,116 948 

No Error 57% 4% 53% 60% 668 

Error 43% 4% 40% 47% 280 

Total Item Codes 100% 948 

Open Market Sales: 

No Error $71,376,406 $34,202,538 $37,173,867 $105,578,944 668 

Error 67,244,056 61,147,698 6,096,358 128,391,754 280 

Total Sales $138,620,462 $69,015,340 $69,605,122 $207,635,802 948 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix B 

VA Office of Inspector General 17 

Table 7. Item Codes with Errors 

Almost 70 percent of the transactions with errors had an identified cost savings.

Projection Margin of 

Error Lower 90% CI Upper 90% CI Sample Size 

Item Codes with Errors 

No Savings 31% 6% 25% 36% 95 

Savings 69% 6% 64% 75% 185 

Total Item Codes 100% 280 

Cost Savings $8,234,406 $7,945,798 $432,737* $16,180,204 948 

*Lower confidence limit equals sample findings. 

Based on our review results, we project that use of the FSS instead of the open market to 

make 44,479 purchases of 7,070 medical equipment and supply items would have 

reduced VHA’s medical equipment and supply costs by about $8.2 million during our 

12-month review period. Projected over 5 years, strengthened open market procurement 

controls could reduce VHA medical equipment and supply costs by as much as 

$41 million ($8.2 million x 5 years). 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix C 

Monetary Benefits in Accordance with 

IG Act Amendments 

Recommendation Explanation of Benefit

Annual Better

Use of Funds

5-Year

Projection

1 Reduction of supply 

costs for medical 

equipment and supply 

items purchased on the 

open market when an 

identical or comparable 

item was found on the 

FSS. 

$8,234,406 $41,172,031

 Total $8,234,406 $41,172,031

VA Office of Inspector General 18 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix D 

s 

VA Office of Inspector General 19 

Acting Under Secretary for Health Comment
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix D 

VA Office of Inspector General 20 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix D 

VA Office of Inspector General 21 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix D 

VA Office of Inspector General 22 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix E 

Executive Director, Office of Acquisition, Logistics, 

and Construction Comments 

VA Office of Inspector General 23 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix F 

OIG Contact and Staff Acknowledgments 

OIG Contact Janet Mah (310) 268-4335 

Acknowledgments Gregory Gladhill 

Lee Giesbrecht 

Corina Riba 

John Carnahan 

Timothy Parker 

Andrea Lui 

Kelly To 

VA Office of Inspector General 24 
Audit of VHA Open Market Medical Equipment and Supply Purchases 

Appendix G 

Report Distribution 

VA Distribution

Office of the Secretary 

Veterans Health Administration 

Acting Assistant Secretary for Congressional and Legislative Affairs 

Acting Assistant Secretary for Management 

Acting Assistant Secretary for Policy and Planning 

Office of General Counsel 

Procurement and Logistics Office 

Office of Acquisition, Logistics, and Construction 

Non-VA Distribution

House Committee on Veterans’ Affairs 

House Appropriations Subcommittee on Military Construction, Veterans Affairs, and 

Related Agencies 

House Committee on Oversight and Government Reform 

Senate Committee on Veterans’ Affairs 

Senate Appropriations Subcommittee on Military Construction, Veterans Affairs, and 

Related Agencies 

Senate Committee on Homeland Security and Governmental Affairs 

National Veterans Service Organizations 

Government Accountability Office 

Office of Management and Budget 

This report will be on the VA OIG web site and remain on the OIG web site for at least 

two fiscal years after it is issued: http://www.va.gov/oig/publications/reports-list.asp. 

VA Office of Inspector General 25