VETERANS HEALTH 

CARE

VHA Has Taken Steps 

to Address 

Deficiencies in Its 

Logistics Program, but 

Significant Concerns 

Remain

Report to the Chairman, Committee on 

Veterans’ Affairs, House of 

Representatives

April 2013

GAO-13-336

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-336, a report to the 

Chairman, Committee on Veterans’ Affairs, 

House of Representatives

April 2013

VETERANS HEALTH CARE

VHA Has Taken Steps to Address Deficiencies in Its 

Logistics Program, but Significant Concerns Remain

Why GAO Did This Study

VHA’s logistics program is responsible 

for the management of medical 

supplies and equipment in VAMCs’ 

inventories and the standardization of 

such items throughout VHA. Previous 

reports have pointed to deficiencies in 

VHA’s logistics program.

GAO assessed (1) the extent to which 

VAMCs and networks have complied 

with new VHA requirements to remedy 

known deficiencies in its logistics 

program and (2) VHA’s progress in 

enhancing its logistics program. GAO 

reviewed documents and interviewed 

officials to identify new requirements 

affecting VHA’s logistics program. 

GAO then visited a nongeneralizable 

sample of five VAMCs and verified the 

extent to which the VAMCs and 

corresponding networks, which 

oversee VAMCs, were complying with 

VHA’s new requirements. GAO also 

reviewed documentation of VHA’s 

plans for funding, implementing, and 

evaluating efforts it is undertaking to 

enhance its logistics program, 

examined the extent to which VHA was 

on track to execute those plans, and 

assessed VHA’s efforts against criteria 

in GAO’s standards for internal control 

in the federal government.

What GAO Recommends

GAO recommends that VHA take steps 

to assist VAMCs and networks in 

complying with VHA’s new logistics 

requirements and develop plans for 

implementing and evaluating the 

performance of its efforts to improve its 

logistics program, which address the 

concerns—such as system 

interoperability issues—GAO identified.

VA concurred with GAO’s 

recommendations and provided an 

action plan to address them.

What GAO Found

To address deficiencies in its logistics program, the Veterans Health 

Administration (VHA) issued new requirements in 2011 regarding the 

management of medical supplies and equipment in Veterans Affairs medical 

centers’ (VAMC) inventories, the standardization of these items, and the 

monitoring of VAMCs’ logistics programs. These requirements, some of which 

apply to VAMCs and some of which apply to networks, are designed to improve 

veterans’ safety and the cost-effective use of resources. GAO found that the five 

VAMCs GAO visited and their corresponding networks have partially complied 

with VHA’s new requirements. Specifically, as of December 2012,

• none of the VAMCs GAO visited fully complied with all of VHA’s new 

requirements for managing inventories;

• one VAMC GAO visited and two networks fully complied with VHA’s new 

standardization requirements, and the remaining four VAMCs and three 

networks partially complied; and

• four of the five VAMCs GAO visited and three of the five corresponding 

networks fully complied with the new monitoring requirements.

Because VAMCs GAO visited and the associated networks have only partially 

complied with these requirements, potential risks to patient safety and the 

inefficient use of resources remain.

In addition to the new VAMC and network requirements, VHA has other efforts 

underway that—according to officials—will further improve the management and 

tracking of medical supplies and equipment in VAMC inventories and the 

standardization of such items across VHA. However, there are substantive 

uncertainties relating to implementation, funding, and operational issues that may 

impede their success, if not appropriately addressed. Specifically:

• VHA is piloting a new inventory management system that is intended to 

replace VHA’s existing systems for managing medical supply and equipment 

inventories. However, VHA has not fully funded the pilot, staffing resources

to implement it at VAMCs are limited, and VHA has yet to resolve technical 

issues to ensure that this new system can interface with legacy systems. 

Furthermore, VHA has yet to develop criteria and collect corresponding data 

to evaluate the performance of the pilot.

• VHA is also implementing a system for electronically tracking the location of 

certain medical supplies and equipment in VAMCs. However, there are 

uncertainties with respect to interoperability issues with other inventory 

management systems and resources to implement the system.

• Lastly, VHA is establishing a program executive office that will provide 

logistics support and manage the standardization of medical supplies and 

equipment VHA-wide. However, the office has not been fully staffed and 

uncertainty exists about its continued implementation, because VHA's efforts 

to hire additional staff are on hold pending its evaluation of the effectiveness 

of this office.

View GAO-13-336. For more information, 

contact Randall B. Williamson at 

(202) 512-7114 or williamsonr@gao.gov.
Page i GAO-13-336 Veterans Health Administration Logistics Program

Letter 1 

Background 3

VAMCs and Networks We Visited Have Partially Complied with 

New VHA Requirements to Address Deficiencies in Its Logistics 

Program 6

VHA Has Additional Efforts Underway to Further Improve Its 

Logistics Program, but They Face Uncertainty about 

Implementation 16

Conclusions 24

Recommendations for Executive Action 25

Agency Comments and Our Evaluation 26

Appendix I Comments from the Department of Veterans Affairs 28

Appendix II GAO Contact and Staff Acknowledgments 34

Tables

Table 1: Selected Veterans Affairs Medical Centers’ (VAMC) 

Compliance with New Veterans Health Administration 

(VHA) Requirements for Managing Inventories 7

Table 2: Selected Veterans Affairs Medical Centers’ (VAMC) 

Compliance with New Veterans Health Administration 

(VHA) Standardization Requirements 11

Table 3: Selected Veterans Integrated Service Networks’ (Network) 

Compliance with New Veterans Health Administration 

(VHA) Standardization Requirements 13

Contents 
Page ii GAO-13-336 Veterans Health Administration Logistics Program

Abbreviations

AEMS/MERS Automated Engineering Management System/ 

 Medical Equipment Reporting System

GIP Generic Inventory Package

network Veterans Integrated Service Network

RME Reusable medical equipment

RTLS Real Time Location System

SOARD Service Oriented Architecture Research and 

 Development

VA Department of Veterans Affairs

VAMC Veterans Affairs medical center

VHA Veterans Health Administration

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-13-336 Veterans Health Administration Logistics Program

United States Government Accountability Office

Washington, DC 20548

April 17, 2013

The Honorable Jeff Miller

Chairman

Committee on Veterans’ Affairs

House of Representatives

Dear Mr. Chairman:

The Department of Veterans Affairs (VA) provides health care services to 

approximately 6 million eligible veterans, making it one of the largest 

health care delivery systems in the nation. To ensure that veterans 

receive safe and appropriate care and that financial resources are used 

effectively, the Veterans Health Administration’s (VHA) logistics program 

is responsible for coordinating the management of medical supplies and 

equipment at VA medical centers (VAMC) and the standardization of such 

items.1

Recently, both GAO

Effective management of medical supplies and equipment 

enables VAMCs to purchase and track such items so clinicians at VAMCs 

have access to the items when needed and can identify medical supplies 

and equipment if an item is recalled. Likewise, the standardization of 

medical supplies and equipment helps VHA deliver a consistent standard 

of care across its system and leverage its purchasing power through bulk 

purchasing.

2

 

1

VHA attempts to standardize items by analyzing their purchase history and identifying 

similar items, such as endoscopes, that could be standardized by model type. After these 

items are identified, a team of clinicians determines whether the items are acceptable for 

use by all VAMCs. Once the items are determined to be acceptable, they can be 

standardized if VAMCs have the ability to service the items and have the capability to train 

staff, if needed, on how to use the items. VHA then negotiates national or regional 

contracts or blanket purchase agreements with vendors to obtain discounts for purchasing 

these items in volume and to provide more timely procurement of items needed on a 

recurring basis. 

and VHA internal reports have identified 

deficiencies with VHA’s logistics program related to the management of 

medical supplies and equipment and the standardization of these items. 

2

GAO, VA Health Care: Weaknesses in Policies and Oversight Governing Medical 

Supplies and Equipment Pose Risks to Veterans' Safety, GAO-11-391 (Washington, D.C.: 

May 3, 2011); VA Health Care: Preliminary Observations on the Purchasing and Tracking 

of Supplies and Medical Equipment and the Potential Impact on Veterans’ Safety, 

GAO-10-1038T (Washington, D.C.: Sept. 23, 2010).

 
 

Page 2 GAO-13-336 Veterans Health Administration Logistics Program

These deficiencies may pose risks to veterans’ safety and limit the costeffective use of resources. Furthermore, by VA’s own account, VHA has 

failed in recent attempts to update its inventory management systems 

because of a lack of VA leadership and other factors. In response, VHA 

began making changes in 2011 to address inventory management and 

standardization deficiencies. These changes include new logistics 

program requirements that VAMCs and veterans integrated service 

networks (network)3

To describe the extent to which VAMCs and networks have complied with 

new VHA requirements to remedy known deficiencies in its logistics 

program, we reviewed relevant VA and VHA handbooks, directives, and 

policy memorandums and interviewed VA and VHA officials to identify 

new requirements affecting VHA’s logistics program. We then visited a 

nongeneralizable sample of 5 of the 152 VAMCs (Sacramento, California; 

Bronx, New York; Cincinnati, Ohio; Portland, Oregon; and Madison, 

Wisconsin). These VAMCs are classified by VHA as surgically complex 

facilities

must implement and other efforts aimed at 

enhancing VHA’s logistics program. Members of Congress have raised 

questions about both the extent to which VAMCs and networks are 

complying with these requirements and VHA’s progress in enhancing its 

logistics program. This report addresses (1) the extent to which VAMCs 

and networks have complied with new VHA requirements to remedy 

known deficiencies in its logistics program and (2) VHA’s progress in 

enhancing its logistics program.

4

 

3

The management of VAMCs is primarily the responsibility of 21 geographically based 

networks.

and are located in different networks. In addition, two of these 

VAMCs are serving as pilot or demonstration sites for VHA efforts to 

enhance its logistics program. At these five VAMCs and the 

corresponding networks, we verified, through document reviews and 

interviews with VAMC and network officials, the extent to which the 

4

VA assigns each VAMC a complexity level—complex, intermediate, or standard—that 

determines what level of inpatient surgeries may be performed in each of its surgery 

programs. That model uses multiple variables to measure facility complexity arrayed along 

four categories: facilities, equipment, workload, and staffing load. VAMCs assigned a 

complex rating require special facilities, equipment, and staff for difficult operations, such 

as cardiac surgery, whereas VAMCs assigned an intermediate or standard rating may 

perform less-complex surgeries. VAMCs that are classified as surgically complex 

generally have larger inventories of medical supplies and equipment than less-surgically 

complex facilities and may therefore encounter greater challenges with managing and 

standardizing these inventories.
 

Page 3 GAO-13-336 Veterans Health Administration Logistics Program

VAMCs and networks were complying with VHA’s new requirements. 

Given the small number of VAMCs that we visited and our process for 

selecting them, the results of our review are not generalizable to all 

VAMCs.

To assess VHA’s progress in enhancing its logistics program, we 

reviewed documents describing efforts VHA is undertaking or plans to 

undertake to enhance its logistics program and interviewed officials from 

VA’s Office of Acquisition and Logistics; VHA’s Procurement and 

Logistics Office; and five VAMCs we visited and their corresponding 

networks. We reviewed documentation of VHA’s plans for funding, 

implementing, and evaluating these efforts, and examined the extent to 

which VHA was on track to execute those plans. We also assessed 

progress against criteria in GAO’s standards for internal control in the 

federal government.5

We conducted this performance audit from May 2012 to April 2013 in 

accordance with generally accepted government auditing standards. 

Those 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 

conclusions based on our audit objectives.

VHA provides health care services to various veteran populations—

including an aging veteran population and a growing number of younger 

veterans returning from military operations in Afghanistan and Iraq. VHA’s 

152 VAMCs offer outpatient, residential, and inpatient services, ranging 

from primary care to complex specialty care, such as cardiac surgery and 

spinal cord injury care. In providing these health care services to 

veterans, clinicians at VAMCs use a variety of medical supplies and 

equipment, which must be appropriately managed and standardized in 

order to help ensure safe and cost-effective care.

 

5

See GAO, Internal Control: Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).

Background 
 

Page 4 GAO-13-336 Veterans Health Administration Logistics Program

The functions carried out by VHA’s logistics program include the 

management of medical supplies and equipment in VAMCs’ inventories 

and the standardization of these items.

At the VA headquarters level, several offices are involved in the logistics 

program. VA’s Office of Acquisition, Logistics, and Construction develops 

policies related to department-wide inventory management and 

standardization of medical supplies and equipment. VHA’s Procurement 

and Logistics Office develops requirements, based on VA’s policies, 

some of which are applicable to networks and some of which are 

applicable to VAMCs. VA’s Management Quality Assurance Service6

Each of the 21 networks is responsible for complying with applicable VHA 

requirements and ensuring compliance with VHA’s requirements by the 

VAMCs within its network. In turn, the logistics department at each of the 

152 VAMCs is responsible for inventory management and 

standardization, and must comply with applicable VHA requirements.

assesses each VAMC for compliance with logistics requirements every 7 

to 8 years using a standardized check list, which is updated annually.

In past reports, GAO and VHA identified major deficiencies related to 

VHA’s management of medical supply and equipment inventories and the 

standardization of such items. These deficiencies included the following:

Limitations with inventory management systems. A 2011 GAO report and 

VHA internal reports from 2008 and 2011 identified that the two inventory 

management systems that VHA currently requires VAMCs to use to track 

the type and quantity of medical supplies and equipment at their facilities 

rely on antiquated technology and therefore have limited functionality.7

 

6

VA’s Management Quality Assurance Service is under VA’s Office of Business Oversight 

and is responsible for overseeing compliance with logistics policies and procedures 

throughout VA.

Specifically, the Generic Inventory Package (GIP)—used to track medical 

supplies, such as needles and scalpel blades—and the Automated 

Engineering Management System/Medical Equipment Reporting System 

(AEMS/MERS)—used to track medical equipment, such as 

endoscopes—cannot provide VHA or VAMCs with system-wide data on 

7

GAO-11-391. 

Logistics Program 

Organizational Structure

Logistics Program 

Deficiencies in Previous 

Reports 
 

Page 5 GAO-13-336 Veterans Health Administration Logistics Program

the types and quantities of medical supplies and equipment in use at 

VAMCs. This occurs because each VAMC maintains its own inventory 

management systems, and data have not been entered consistently 

across VAMCs. Without system-wide information, VHA’s ability to identify 

VAMCs’ noncompliance with certain inventory management requirements 

is limited, which in turn may pose risks to veterans’ safety and limit VHA’s 

cost effectiveness. In addition, because of the antiquated technology on 

which GIP and AEMS/MERS are based, these systems can only be 

updated to a limited extent, meaning that VHA is largely unable to expand 

the capabilities of these systems.

Gaps in requirements for managing inventories. In 2011, we reported that 

VHA’s requirements for managing medical supply and equipment 

inventories had gaps concerning the types of medical supplies and 

equipment VAMCs must track in their inventories, and that, as a result, 

VAMCs did not track all the items being used in their facilities. In that 

report, we also found that items clinical department staff had purchased 

were sometimes not captured in the medical supply and equipment 

inventories. Because VAMCs did not track all the items being used in 

their facilities, they had difficulty ensuring that they maintained 

appropriate quantities of items to stock, resulting in unavailable or expired 

medical supplies. VAMCs with incomplete inventories may also have 

been unable to quickly identify and remove medical supplies and 

equipment that are the subject of a manufacturer or U.S. Food and Drug 

Administration recall or patient safety alert so that they would not be used 

when providing care to veterans.8

Lack of standardization of medical supplies and equipment. While VHA 

has had efforts in place to standardize medical supplies and equipment, a 

2011 VHA internal report found that VHA did not have a systematic 

process for identifying the medical supplies and equipment that could be 

standardized. In addition, VHA did not have a systematic process to 

determine the potential financial and clinical effects of standardizing a 

particular item throughout VAMCs, and VHA lacked appropriate 

involvement of clinical staff in the standardization process. Clinical staff 

must be involved in this process, because—as the users of medical 

supplies and equipment—they have a unique understanding of the 

 

8

A patient safety alert is a notification sent to VAMCs from VA’s National Center for 

Patient Safety regarding veterans’ safety.
 

Page 6 GAO-13-336 Veterans Health Administration Logistics Program

features offered by each item. Greater standardization could allow VHA to 

better leverage its purchasing power by establishing national contracts 

and blanket purchase agreements and to increase veterans’ safety.9 For 

example, if a VAMC standardized certain types of reusable medical 

equipment (RME), it could reduce the number of different types of RME 

available for use in the facility.10 This, in turn, would cut down on the 

different reprocessing methods that VAMC staff would need to be familiar 

with in order to clean, disinfect, and sterilize each piece of RME properly, 

which might reduce instances of inadequate or improper reprocessing of 

these items.

To address deficiencies in its logistics program, VHA issued new 

requirements in 2011 mainly in three areas—management of medical 

supplies and equipment in VAMCs’ inventories, the standardization of 

these items, and the monitoring of VAMCs’ logistics programs.11 These 

requirements, some of which apply to VAMCs and some of which apply to 

networks, are designed to improve veterans’ safety and the cost-effective 

use of resources. We found that the five VAMCs we visited and their 

corresponding networks have partially complied with VHA’s new 

requirements, as of December 2012.

 

9

National contracts and blanket purchase agreements are methods VAMCs’ use to 

acquire supplies that are reordered on a regular basis. These methods allow VHA the 

opportunity to negotiate better pricing based on anticipated sales volume and to provide 

more timely procurement of products needed on a recurring basis.

10RME is designed to be reused for multiple patients and includes such equipment as 

endoscopes and surgical and dental instruments. Reusable medical equipment must be 

reprocessed—that is, cleaned and disinfected or sterilized—between uses.

11These requirements were mandated by the Deputy Under Secretary for Health for 

Operations and Management on January 11, 2011, February 11, 2011, and October 12, 

2011, respectively.

VAMCs and Networks 

We Visited Have 

Partially Complied 

with New VHA 

Requirements to 

Address Deficiencies 

in Its Logistics 

Program 
 

Page 7 GAO-13-336 Veterans Health Administration Logistics Program

None of the VAMCs we visited fully complied with all of VHA’s new 

requirements for managing inventories.12 These new requirements 

include three components: (1) having logistics staff manage all medical 

supplies,13 (2) establishing and maintaining a list of all medical supplies 

and RME approved for use at the facility,14 and (3) entering all stock 

surgical and dental instruments—a type of RME—into GIP.15

Table 1: Selected Veterans Affairs Medical Centers’ (VAMC) Compliance with New Veterans Health Administration (VHA) 

Requirements for Managing Inventories

(Table 1 

lists each of the new requirements for managing inventories and each 

VAMC’s compliance with these requirements.)

Compliance by VAMC

Requirement VAMC A VAMC B VAMC C VAMC D VAMC E

VAMC logistics staff manage all medical supplies ◓ a ● ◓ ● ●

VAMC logistics staff establish and maintain a list of all medical supplies 

and reusable medical equipment (RME) approved for use at the facility

◓ b ◓ ◓ ◓ ◓

VAMC staff enter all stock surgical and dental instruments into the 

Generic Inventory Package (GIP)

● c ◓ ◓ ◓ ◓

Key: ● = full compliance; ◓ =partial compliance

Source: GAO analysis of information from the five selected VAMCs.

a

 

12These new requirements for managing inventories apply only to VAMCs and not to 

networks, as networks are not responsible for managing inventories of medical supplies 

and equipment.

The management of medical supplies includes the following three responsibilities: (1) the 

management of medical supply inventories, (2) the purchase of medical supplies, and (3) the 

management of funds allocated to medical supply purchasing. Collectively, these responsibilities are 

referred to as total supply support. This requirement also prohibits clinical department staff from using 

purchase cards to purchase medical supplies.

13The management of medical supplies includes the following three responsibilities: 

(1) the management of medical supply inventories, (2) the purchase of medical supplies, 

and (3) the management of funds allocated to medical supply purchasing. Collectively, 

these responsibilities are referred to as total supply support. This requirement also 

prohibits clinical department staff from using purchase cards to purchase medical 

supplies.

14Medical supplies and RME approved for use at the VAMC are required to be recorded in 

the facility’s item master file, an electronic database that contains certain information on 

each item, such as the manufacturer and cost.

15Stock surgical and dental instruments include those instruments that are not currently in 

use, such as spare instruments.

None of the VAMCs We 

Visited Fully Complied 

with Requirements for 

Managing Inventories
 

Page 8 GAO-13-336 Veterans Health Administration Logistics Program

b

Medical supplies and RME approved for use at the VAMC are required to be recorded in the facility’s 

item master file, an electronic database that contains certain information on each item, such as the 

manufacturer and cost.

c

Specifically, compliance with these requirements was as follows:

Stock surgical and dental instruments include those instruments that are not currently in use, such as 

spare instruments.

• At two of the five VAMCs, some medical supplies were still being 

managed by staff from clinical departments instead of logistics staff as 

required.16 Staff at these two facilities cited a lack of staffing 

resources in light of the additional responsibilities that logistics 

department staff had to take on as the reason for not fully meeting the 

VHA requirement. One of these VAMCs only allows staff from two 

clinical departments to manage medical supplies and requires these 

staff to comply with VHA’s review, approval, and tracking processes. 

Since our visit, the other VAMC with partial compliance was able to 

secure additional staffing resources and expects to achieve 

compliance with this requirement in the near future. The purchase of 

medical supplies by clinical department staff may circumvent the 

required review, approval, and tracking processes and thereby poses 

risks to veterans’ safety and limits the cost-effective use of resources.

• Although all five VAMCs had established a list of medical supplies and 

RME approved for use at the facility, these lists were incomplete at 

each of the five VAMCs. Specifically, at the five VAMCs, based on 

VHA data, between 1 percent and 14 percent of medical supplies and 

RME that had been purchased in October 2012 were not captured on 

the list, although the percentage of items not captured has decreased 

at three of these VAMCs since September 2012.17

 

16At two of the VAMCs we visited that complied with the requirement that logistics staff 

manage all medical supplies, such supplies had already been managed by logistics staff 

prior to the issuance of this requirement.

VAMC and 

network officials mainly attributed the incomplete lists of approved 

medical supplies and RME to two factors. First, a lack of training for 

logistics program staff has led to inaccuracies in entering medical 

supplies and RME on this list. Second, such items may not be 

consistently entered on the list when they are managed by clinical 

17In September 2012, at the five VAMCs, between 7 percent and 19 percent of medical 

supplies and RME that had been purchased were not captured on the list. VHA began 

collecting these data in fiscal year 2012 and is using them, along with other data, to 

assess VAMCs’ logistics programs.
 

Page 9 GAO-13-336 Veterans Health Administration Logistics Program

department staff rather than logistics staff. VAMCs with an incomplete 

record of medical supplies and RME in use at the facility may have 

difficulty determining whether they possess an item targeted by a 

manufacturer or Food and Drug Administration recall, or patient safety 

alert. Moreover, VHA’s Procurement and Logistics Office is in the 

process of establishing an electronic database that will contain all 

medical supplies and RME approved for use across VHA, which will 

eventually allow VHA to determine which items each VAMC has 

approved for use.18 Because data are extracted from each VAMC’s 

list of approved medical supplies and RME to populate VHA’s 

database, each VAMC needs to achieve full compliance with this 

requirement in order for the database to be complete.

• Officials from four of the five VAMCs said that they had not entered all 

stock surgical and dental instruments into GIP because they lack the

staffing resources necessary to do this. A VAMC official said given the 

high volume of existing surgical and dental instruments that have not 

been entered into GIP at each VAMC, this requirement would likely 

take months to complete. VAMC officials stated that in light of limited 

resources available to comply with this requirement, they would 

benefit from guidance from VHA such as how to prioritize the entry of 

instruments into GIP. At the one VAMC that reported achieving full 

compliance with this requirement, an official told us that the process of 

entering these instruments into GIP was cumbersome and resourceintensive and that achieving compliance required extensive 

collaboration between logistics staff and sterile processing staff within 

the VAMC.19

 

18As part of this process, VHA is standardizing the naming conventions for all medical 

supplies and RME in the database, so that each VAMC’s data can be aggregated 

nationally.

19Sterile processing staff are responsible for reprocessing RME.
 

Page 10 GAO-13-336 Veterans Health Administration Logistics Program

One VAMC we visited and two networks fully complied with VHA’s new 

standardization requirements, and the remaining four VAMCs and three 

networks have partially complied. For VAMCs, these new requirements 

include: (1) establishing and maintaining a clinical product review 

committee;20 (2) reviewing and approving medical supplies and RME that 

have not previously been used at the VAMC, including emergency 

purchases of these items;21 and (3) performing standardization 

activities—including identifying opportunities for standardizing medical 

supplies and RME within the facility and ensuring facility compliance with 

national contracts and blanket purchase agreements for medical supplies 

and RME. For networks, these new requirements include: (1) establishing 

and maintaining a network commodity standardization committee and four 

subcommittees;22

Extent of VAMCs’ compliance. Four of the five VAMCs we visited had 

not fully complied with all of VHA’s new standardization requirements. 

(Table 2 lists each of the new standardization requirements and each 

VAMC’s compliance with these requirements.)

(2) reviewing the activities of the VAMC clinical product 

review committees; and (3) performing standardization activities—

including identifying opportunities for standardization, facilitating the 

standardization of medical supplies and RME, and tracking and reporting 

the benefits resulting from the implementation of standardization 

initiatives.

 

20The clinical product review committee is responsible for reviewing and approving all 

medical supplies and RME prior to use at each VAMC, maintaining the list of approved 

medical supplies and RME, and performing standardization activities. The committee is to 

comprise both clinical and nonclinical staff.

21Medical supplies and RME that have not previously been used at the VAMC also include 

items on national contracts or blanket purchase agreements and evaluations, trials, or 

loans of these items.

22The network commodity standardization committee is responsible for identifying 

standardization opportunities and facilitating the standardization process, which includes 

determining potential benefits of standardization, working with contracting staff to establish 

network-wide contracts for standardized items, tracking the benefits realized through 

standardization, and reporting those benefits. In addition, VHA requires the establishment 

of four subcommittees (at a minimum)—medical/surgical, laboratory, radiology, and sterile 

processing department/RME—which focus on standardizing items used within those 

communities. Other subcommittees may be established at the discretion of each network. 

Subcommittees are to comprise both clinical and nonclinical staff.

One VAMC We Visited and 

Two Networks Have Fully 

Complied with VHA’s 

Standardization 

Requirements
 

Page 11 GAO-13-336 Veterans Health Administration Logistics Program

Table 2: Selected Veterans Affairs Medical Centers’ (VAMC) Compliance with New Veterans Health Administration (VHA) 

Standardization Requirements

Compliance by VAMC

Requirements VAMC A VAMC B VAMC C VAMC D VAMC E

VAMC established and maintains a clinical product review committee ● ● ● ◓ ◓

Committee has a process for reviewing and approving medical 

supplies and reusable medical equipment (RME) that have not 

previously been used at the VAMC, including emergency purchases

●

a

◓ ◓ ● ◓

Committee performs standardization activities, including identifying 

opportunities for standardization and ensuring compliance with 

nationally standardized contracts and blanket purchasing agreements

● ◓ ◓ ◓ ●

Key: ●= full compliance; ◓=partial compliance

Source: GAO analysis of information from the five selected VAMCs.

a

Medical supplies and RME that have not previously been used at the VAMC also include items on 

national contracts or blanket purchase agreements and evaluations, trials, or loans of these items.

Specifically, compliance with these requirements among the five VAMCs 

we visited was as follows:

• Each of the five VAMCs had established a clinical product review 

committee; however, at one of these VAMCs, the committee was not 

meeting on a regular basis. An official at this VAMC stated that the 

committee had only been meeting sporadically because clinical staff—

who are required to be represented on the committee—were not 

available to attend the meetings. In addition, at another VAMC, the 

committee was not established until recently—9 months after the 

deadline for establishing it. However, prior to the establishment of the 

clinical product review committee, some of its required functions, such 

as the review and approval of items that had not previously been 

purchased, were being performed by another VAMC committee. 

Regular clinical product review committee meetings, which include 

appropriate representation of clinical and nonclinical staff, are key to 

ensuring that new medical supplies and RME are reviewed and 

approved prior to their use and to identify opportunities for 

standardization.

• Three of the five VAMCs lacked a documented process for reviewing 

emergency purchases. Specifically, at one VAMC, emergency 

purchases were made without any approval, while at the other two 

VAMCs, the process for reviewing and approving these purchases 

was not documented; however, officials told us that an informal review 

is conducted. Without a documented process for review and approval 

of emergency purchases, the VAMCs may purchase these items 
 

Page 12 GAO-13-336 Veterans Health Administration Logistics Program

without evaluating their cost effectiveness or likely effect on veterans’ 

care.

• Three VAMCs did not perform all of the required standardization 

activities. Specifically, one VAMC did not identify opportunities for 

standardization within its clinical product review committee. Officials at 

this VAMC told us that this was because the committee had not been 

meeting regularly because of a lack of clinical department staff 

availability. Identifying opportunities for standardization is an important 

first step to standardizing medical supplies and RME, which may 

ultimately result in cost savings and greater continuity of care. 

Furthermore, officials at this VAMC and two others did not have 

measures in place to fully ensure compliance with national contracts 

and blanket purchase agreements for medical supplies and RME. 

Officials at one of these VAMCs were only assessing compliance with 

newly issued national contracts and blanket purchasing agreements. 

Officials at the other two VAMCs used an electronic tool—made 

available by VHA—to ascertain whether items they were purchasing 

were available at lower prices through a national contract or blanket 

purchasing agreement. However, VHA officials told us that this tool 

was insufficient to assess compliance because it does not provide 

enough information to determine whether VAMCs are purchasing all 

of the standardized medical supplies and RME available on these 

contracts and blanket purchasing agreements.23 At the two VAMCs 

that were in full compliance with this requirement, the corresponding 

networks had developed a spreadsheet that enabled the VAMCs to 

assess whether they were purchasing standardized items on national 

contracts and blanket purchasing agreements by manually reviewing 

their purchase histories. Both of these networks required the VAMCs 

to assess their compliance with a certain number of national contracts 

and blanket purchasing agreements each month and report their 

findings to the network. Assessing compliance with national contracts 

and blanket purchasing agreements is important because VAMCs that 

are not in compliance may not be taking advantage of cost-effective 

options for purchasing medical supplies and RME that have been 

standardized.

 

23Procurement and Logistics Office officials told us that VHA is in the process of 

developing an electronic tool that will allow VAMCs to more easily assess their compliance 

with national contracts and blanket purchasing agreements.
 

Page 13 GAO-13-336 Veterans Health Administration Logistics Program

Extent of network compliance. Two of the five networks we visited fully 

complied with all of VHA’s new standardization requirements, and the 

remaining three only partially complied. (Table 3 lists the requirements for 

standardization and each network’s compliance with the requirements.)

Table 3: Selected Veterans Integrated Service Networks’ (Network) Compliance with New Veterans Health Administration 

(VHA) Standardization Requirements

Compliance by network

Requirements Network A Network B Network C Network D Network E

Network established and maintains a commodity standardization 

committee and four subcommittees—(1) medical/surgical, 

(2) laboratory, (3) radiology, and (4) sterile processing 

department/reusable medical equipment (RME)

● ◓ ◓ ● ◓

Network reviews the activities of the Veterans Affairs medical 

centers’ (VAMC) clinical product review committees

● ◓ ◓ ● ◯

Network commodity standardization committee, including the four 

subcommittees, performs standardization activities, including 

identifying opportunities for standardization, facilitating the 

standardization of medical supplies and RME, and tracking and 

reporting the benefits resulting from the implementation of 

standardization initiatives

● ◓ ◓ ● ◯

Key: ●= full compliance; ◓=partial compliance; ○= noncompliance

Source: GAO analysis of information from the five selected networks. 

Specifically, compliance with these requirements was as follows:

• While each of the five networks had established a commodity 

standardization committee and the four required subcommittees, at 

three of the networks the committee and its subcommittees were not 

meeting on a regular basis, as required. Officials at these networks 

stated that the committee had only been meeting sporadically 

because clinical or logistics program staff from the VAMCs within the 

networks—who are required to be represented on the committee and 

its subcommittees—were not available to attend the meetings. 

Officials at two networks told us that clinical staff serve on this 

committee as a collateral duty and often lack the time to participate in 

committee meetings. Similarly, officials at another network told us that 

VAMC logistics staff were not always available to participate in 

committee meetings in light of additional responsibilities they had to 

take on. Regular network commodity standardization committee 

meetings, which include appropriate representation of clinical and 

nonclinical staff, are key to identifying and pursuing opportunities for 

standardization.
 

Page 14 GAO-13-336 Veterans Health Administration Logistics Program

• One of the five networks did not review the activities of the VAMC 

clinical product review committee. Network officials told us that they 

were not receiving committee minutes from the VAMCs but that they 

would begin requesting these minutes in the future, which would allow 

the network to review the committees’ activities. Review of the 

VAMCs’ clinical product review committees’ activities is important to 

ensure that the committees are functioning effectively and to help 

identify standardization opportunities, which can lead to financial 

savings. Officials at one of the two networks that was partially 

complying with this requirement told us that instead of reviewing the 

activities of the VAMCs’ clinical product review committee, network 

officials extract data on the VAMCs’ purchases to identify items that 

are frequently used or costly—in an effort to standardize them across 

the network. Officials at the other network that was partially complying 

told us that they review the activities of the VAMCs’ clinical product 

review committee only once annually, as part of a network external 

review of VAMCs’ logistics programs. Because these networks did not 

regularly review the activities of the VAMC committees, they may not 

have been aware of new supply and RME purchases the VAMCs are 

considering. If other VAMCs within the networks are considering 

similar purchases, the networks may be able to consolidate these 

purchases across multiple VAMCs and thereby achieve financial 

savings.

• At one network, the commodity standardization committee had not 

performed any standardization activities because clinical staff from the 

VAMCs within the network were not available to attend the committee 

meetings and identify medical supplies and RME for standardization. 

At another network that achieved partial compliance, the commodity 

standardization committee and its subcommittees had not met 

regularly because VAMC logistics staff were not available to attend 

committee meetings. Instead, network officials performed some 

standardization activities outside of the committee. At another 

network, the committee had just begun the process of reviewing 

VAMCs’ purchase histories to identify opportunities for standardization 

but had not developed specific plans to standardize medical supplies 

or RME because of a lack of clinical staff involvement. In contrast, the 

two networks that fully complied with this requirement were able to 

identify items for standardization, facilitate the standardization 

process, and implement the standardized items at the VAMCs within 

the network. For example, at one of these networks, a medical supply 

used in certain imaging procedures was standardized across the 

network, resulting in an estimated cost savings of $1.7 million over 

5 years, according to network officials.
 

Page 15 GAO-13-336 Veterans Health Administration Logistics Program

Four of the five VAMCs we visited and three of the five corresponding 

networks had fully complied with the new monitoring requirements at the 

time of our visit. One VAMC and two networks partially complied. For 

VAMCs, these requirements include conducting an annual facility internal 

review using VA’s Management Quality Assurance Service checklist, 

developing an action plan for correcting deficiencies identified during the 

review to submit to the network, and ensuring that all identified 

deficiencies from the internal review are corrected within 90 days after 

they were identified.24

For networks, these requirements include conducting a network external 

review at least 90 days and no more than 9 months after the VAMC’s 

internal review to validate the VAMCs’ internal findings. Also, networks 

must ensure that all identified deficiencies from the external review are 

corrected by the VAMCs within 90 days after they were identified.

The VAMC that only partially complied with these 

new monitoring requirements failed to correct identified deficiencies within 

90 days after they were identified or request an extension. While each of 

the VAMCs either fully or partially complied, VAMC officials stated that 

they were unclear about some of the items on the checklist. For example, 

these officials pointed out that several of the checklist items referred to 

VHA requirements that appeared to be conflicting, and thus they were 

unsure how to interpret those items. Officials from VHA’s Procurement 

and Logistics office told us that they were in the process of issuing 

guidance to VAMCs and networks on how to interpret each checklist item; 

however, at the time of our report, this guidance had not yet been issued.

25

 

24VHA requires that an extension be requested for deficiencies that cannot be addressed 

within 90 days of the date of the facility internal review.

At 

one network that did not fully comply, we found that the network did not 

use the entire checklist, as required by VHA, when conducting this 

review. Rather than completing the entire checklist, this network only 

assessed those items on the checklist for which the VAMCs noted 

deficiencies during their facility internal reviews. Officials at this network 

were not aware that they had to complete the entire checklist. Because 

this network did not complete the entire checklist, it may have failed to 

identify deficiencies that the VAMCs did not identify during their internal 

reviews. The other network that did not fully comply completed the review 

outside of the required time frame. Full compliance with monitoring 

25VHA requires that an extension be requested for deficiencies that cannot be addressed 

within 90 days of the date of the network external review.

Four VAMCs We Visited 

and Three Networks Have 

Fully Complied with VHA’s 

Monitoring Requirements
 

Page 16 GAO-13-336 Veterans Health Administration Logistics Program

requirements helps ensure the cost-effective use of resources and patient 

safety by enabling VAMCs and networks to identify and correct 

deficiencies in the management of medical supplies and equipment.

In addition to the new VAMC and network requirements, VHA has other 

efforts underway that—according to officials—will further improve the 

management and tracking of medical supplies and equipment in VAMC 

inventories and the standardization of such items across VHA. 

Specifically, VHA is (1) developing a new inventory management system 

that will replace VHA’s existing systems for managing medical supply and 

equipment inventories, (2) developing a system for electronically tracking 

the location of certain medical supplies and equipment in VAMCs, and 

(3) establishing a program executive office that will provide logistics 

support and manage the standardization of medical supplies and 

equipment VHA-wide. However, there are uncertainties related to 

implementation, funding, and operational issues that may impede their 

success, if not appropriately addressed.

In early 2012, VHA began to pilot a new inventory management system, 

called Service Oriented Architecture Research and Development 

(SOARD) that relies on commercially available asset management 

software.26 VHA is developing SOARD to eventually replace VHA’s 

antiquated inventory management systems—GIP and AEMS/MERS.27

VHA established a project team that is responsible for planning and 

implementing the SOARD pilot at selected VAMCs.28

 

26SOARD relies on a Web-based asset management software used by some hospitals in 

the private sector to manage medical supplies and equipment inventories. This software

provides additional capabilities beyond inventory management, such as the management 

of equipment maintenance requests and maintenance records.

SOARD project 

team officials told us that SOARD will provide VHA with enhanced 

inventory management capabilities that are not available through GIP and 

AEMS/MERS. For example, these planned capabilities include a link to 

an electronic database of recall information for medical supplies and 

equipment and a single Web-based system that contains systemwide 

27SOARD is also intended to replace other systems outside the realm of logistics.

28The SOARD project team selected pilot sites using the following criteria: strong 

biomedical engineering managers and staff at the VAMCs with enthusiasm for the project.

VHA Has Additional 

Efforts Underway to 

Further Improve Its 

Logistics Program, 

but They Face 

Uncertainty about 

Implementation 

VHA Is Piloting a New 

Inventory Management 

System, but Must 

Overcome Major Hurdles 

before It Can Be Fully 

Implemented VHA-Wide
 

Page 17 GAO-13-336 Veterans Health Administration Logistics Program

data on the types and quantities of medical supplies and equipment in 

use at VAMCs that SOARD project team officials told us will enable VHA 

to search, view, and report aggregate data from each VAMC.

VA has made two previous unsuccessful attempts to update the inventory 

management systems in use at VAMCs.29 In a previous report, GAO 

attributed these failures to the lack of a reliable program schedule and 

cost estimate, as well as concerns about the capabilities of the new 

inventory management systems, among other factors.30

The SOARD project team is rolling out SOARD through a multiple-stage 

pilot and, at the time of our report, it had implemented a limited number of 

SOARD’s capabilities at three VAMCs. Throughout fiscal year 2013, the 

SOARD project team plans to pilot SOARD at an additional seven 

VAMCs. VHA plans to roll out SOARD’s equipment management 

capabilities nationwide over the next 3 years (by the end of fiscal year 

2015), thereby allowing AEMS/MERS to be replaced early in fiscal year 

2016. Three factors could potentially interrupt or derail these plans: 

(1) VHA has not committed to fully funding SOARD, (2) staffing resources 

to implement it at VAMCs are limited, and (3) the project team has yet to 

resolve technical issues such that it can interface with legacy systems.31

• Funding needed to complete project. Because of previous failures to 

replace VHA’s inventory management systems, VA’s Office of 

Information Technology is not funding SOARD, which is currently 

projected to cost about $38 million through fiscal year 2015; therefore, 

These uncertainties, along with VHA’s somewhat aggressive timeline to 

develop and implement SOARD at VAMCs, raise questions about the 

project team’s ability to effectively implement SOARD.

 

29Previous unsuccessful attempts to update the inventory management systems include 

the Core Financial and Logistics System in 2004 and the Strategic Asset Management 

system in 2011.

30GAO, Information Technology: Actions Needed to Fully Establish Program Management 

Capability for VA’s Financial and Logistics Initiative, GAO-10-40 (Washington, D.C.: 

Oct. 26, 2009).

31VHA is concurrently developing a new system—called Real Time Location System 

(RTLS)—for electronically tracking certain medical supplies and equipment.
 

Page 18 GAO-13-336 Veterans Health Administration Logistics Program

the SOARD project team had to identify alternative funding sources.32

VHA’s Office of Emergency Management and Procurement and 

Logistics Office provided some funding for SOARD for fiscal year 

2012. However, according to officials, of the $16.4 million that the 

SOARD project team requested for fiscal year 2013, it only received 

$3.4 million, which has required the team to scale back its efforts and 

may not allow it to remain on target with its implementation plan. 

SOARD project team officials told us that it is unlikely that VHA will 

allocate additional funding for SOARD in fiscal year 2013. Given the 

budgetary uncertainties facing the federal government, as well the fact 

that VA has not committed to funding SOARD, the extent to which 

funding will be available for SOARD in future years is unclear.

• Resources needed for implementation. A VAMC official at the initial

SOARD pilot site told us that the preparations for the implementation 

of SOARD, which consist of updating existing inventory databases 

and training staff to use SOARD, are highly resource and labor 

intensive, often requiring highly trained and experienced staff to 

complete. For example, at this VAMC, two engineering staff members 

spent 3 months updating the inventory databases. The official stated 

that other facilities with relatively fewer resources and less experience 

would likely face major challenges completing the necessary steps to 

implement SOARD. On the basis of feedback from this pilot site, 

SOARD project team officials have decided to provide additional 

training as well as greater on-site assistance with preparations for the 

implementation of SOARD at future pilot sites. However, SOARD 

project team officials acknowledged that it is a challenge to support 

several pilot sites with their current resources and nearly impossible to 

support simultaneous deployment at additional sites.33 As a result, 

officials told us that the expansion of SOARD to additional pilot sites is 

dependent on the SOARD project team being able to hire additional 

staff members, who will provide support to pilot sites.

 

32While VA’s Office of Information Technology will not be providing funding directly for 

SOARD, in January 2013, it agreed to provide support services, including a project 

manager, to the SOARD project team. Furthermore, this office is paying for the license for 

the software on which SOARD relies. 

33At the time of our report, SOARD project team officials were developing a methodology 

to determine the level of resources required to assist the pilot sites with preparation 

activities and deliver long-term support. 
 

Page 19 GAO-13-336 Veterans Health Administration Logistics Program

• System interoperability issues. It is currently unclear whether SOARD 

will be able to provide certain capabilities that are supported by the 

existing inventory management systems. For example, SOARD 

currently does not have the capability to interface with VHA’s financial 

management system. If this capability is not established, VAMC staff 

would have to manually enter information on medical supply and 

equipment purchases in two separate systems, which would increase 

their workload. SOARD project team officials told us that they are 

working on solving this interoperability issue but have not estimated a 

time frame for doing so.

Furthermore, SOARD project team officials told us that the Webbased product on which SOARD relies was designed to be used for 

equipment management and that—to their knowledge—only a small 

number of health care entities use this product to manage medical 

supply inventories. SOARD project team officials told us that they are 

working with officials at several entities that use the product for this 

purpose in order to develop this capability for VHA; however, they 

have no timeline for when they expect to achieve this capability.

SOARD project team officials told us that—over the course of the pilot—

officials are monitoring the development and implementation of SOARD, 

including whether each phase of the pilot remains on-time and within its 

budget, and making changes to the system based on feedback that they 

receive from users at the pilot sites and other stakeholders. However, we 

found that they had not yet developed formal criteria that rely on data 

collected from the pilot sites for measuring the overall performance of the 

pilot, including whether anticipated benefits are being achieved. 

According to GAO internal control standards, performance measures 

need to be established and monitored, so that analyses can be made and 

appropriate actions can be taken. Measuring performance would allow 

VHA to track the progress it is making towards achieving its anticipated 

benefits from SOARD implementation and would give officials crucial 

information on which to base their decisions regarding the necessary 

modifications and successful implementation of SOARD. Furthermore, 

VHA’s implementation plan for SOARD is ambitious—with nationwide 

implementation of SOARD’s equipment management capabilities 

expected by September 2015—which may not allow adequate time to 

address the uncertainties associated with the program, evaluate the 

performance of the pilot, and address identified concerns. Given the 

uncertainties that surround the SOARD pilot and the fact that VA has 

made two previous unsuccessful attempts at updating the inventory 

management systems in use at VAMCs, it is important that VHA have a 
 

Page 20 GAO-13-336 Veterans Health Administration Logistics Program

realistic implementation plan—vetted thoroughly in VHA—and assess the 

SOARD pilot using formal evaluation criteria to increase the probability of 

success. 

At the same time SOARD is being piloted at several VAMCs, VHA is 

preparing to roll out a system for physically tracking certain medical 

supplies and equipment, using radio frequency identification and other 

technologies, called Real Time Location System (RTLS).34

According to RTLS program officials, VHA has budgeted up to 

$550 million through fiscal year 2014 to implement RTLS nationwide 

through a contractor. However, VHA’s nationwide RTLS contract was 

subjected to a bid protest in 2012, which was upheld and resulted in VHA 

having to reopen the acquisition. In January 2013, VHA selected a new 

RTLS contractor which, according to RTLS program officials, will allow for 

the implementation of RTLS VHA-wide to begin in March 2013—6 months 

later than anticipated. Because RTLS program officials expect VHA to 

make funding for RTLS implementation available only through fiscal year 

2014, VHA is attempting to implement RTLS VHA-wide by that time.

Officials 

expect that physical tracking of medical supplies and equipment will 

enable VAMCs to reduce expenses associated with lost or stolen supplies 

and equipment and help improve patient safety by—for example—being 

able to systematically track RME through reprocessing.

According to a VHA official, separately from VHA-wide RTLS 

implementation, RTLS is currently being rolled out at all of the VAMCs in 

two networks as demonstration sites.35

 

34RTLS uses radio frequency identification and other technologies to provide wireless 

tracking and identification capabilities for certain medical equipment and supplies outfitted 

with an identification tag. At most VAMCs, wireless signals will be used to track both the 

identification and location of the tags. VHA estimates that each VAMC will have 

approximately 80,000 identification tags and that additional tags will be added over time. 

In addition, RTLS allows VAMCs to centrally monitor temperature and humidity levels 

throughout the facility and to track staff and patients at VAMCs. Lastly, all VAMC-level 

RTLS data will be consolidated into one national database from which information about 

any RTLS-equipped item at the VAMC may be obtained or aggregated from any 

combination of VAMCs, in order to get a network-level or national view of the data.

These networks began rolling out 

35According to VHA officials, the VAMCs where RTLS is being implemented are 

considered demonstration sites and not pilot sites because they are using a different 

vendor than the one that will eventually provide RTLS nationwide to all VAMCs.

VHA Is Implementing a 

New System for 

Electronically Tracking 

Medical Supplies and 

Equipment, but Concerns 

Exist about System 

Interoperability and 

Resources
 

Page 21 GAO-13-336 Veterans Health Administration Logistics Program

RTLS before VHA decided to establish a contract for nationwide RTLS 

implementation and are using a different vendor than the one that will 

eventually provide RTLS nationwide to all VAMCs. The demonstration 

sites are providing VHA with lessons learned for future implementation of 

RTLS at all VAMCs.

To prepare for VHA-wide RTLS implementation, VHA has begun to equip 

VAMCs with wireless capabilities and, according to VHA officials, is 

requiring VAMCs to update existing inventory databases to help ensure 

that RTLS is populated with accurate data on medical supplies and 

equipment. In addition, 6 months prior to RTLS implementation, each 

network will dedicate one staff member to RTLS implementation activities. 

However, like SOARD, there are uncertainties with respect to 

interoperability issues and resources that may prevent RTLS from being 

fully implemented by the end of fiscal year 2014:

System interoperability issues. Once it is operational, RTLS is meant to 

interface with VHA’s current GIP and AEMS/MERS systems as well as 

with SOARD.36 RTLS program officials told us that they believe it would 

likely take 6 to 12 months for VHA’s contractor to develop separate 

interfaces between RTLS and these various systems once the RTLS 

contract has been finalized.37

Furthermore, some VAMCs are in the process of rolling out separate 

systems for tracking the location of surgical and dental instruments, which 

is a function that RTLS will provide. According to RTLS program officials, 

once RTLS is implemented at the 44 VAMCs that already have a system 

for instrument tracking, 14 VAMCs will have to replace these systems 

because they are not compatible with the instrument tracking capability 

provided by RTLS. In fiscal year 2012, after RTLS program officials 

discovered that 24 additional VAMCs were planning to purchase their 

own instrument tracking systems, these officials placed a moratorium on 

However, a more precise timeline will not 

be known until VHA’s contractor begins to develop these interfaces.

 

36In addition, RTLS is meant to interface with other systems outside the realm of logistics.

37According to RTLS program officials, the contract for nationwide RTLS implementation 

includes the requirement that RTLS interface with existing VA information systems, 

including VHA’s two inventory management systems—GIP and AEMS/MERS—but does 

not specify the mechanism or timetable for achieving this. Similarly, the contract specifies 

that interfacing with other systems, such as SOARD, shall be completed by the contractor.
 

Page 22 GAO-13-336 Veterans Health Administration Logistics Program

VAMCs acquiring their own instrument tracking systems in order to 

prevent this incompatibility issue from arising at additional VAMCs.

Resources needed for implementation. Currently, not all VAMCs have 

wireless capabilities—which are necessary before RTLS can be 

implemented—and at some facilities that have these capabilities, the 

wireless signals do not cover the entire facility. RTLS program officials 

told us that some VAMCs are difficult to equip with wireless capabilities 

because of the age or configuration of the buildings, or both, and that this, 

among other issues, has resulted in the installation of wireless capabilities 

taking longer than initially anticipated.38

Furthermore, as with SOARD preparation activities for updating existing 

inventory management systems, data in AEMS/MERS must be updated 

in preparation for RTLS implementation, so that the data used to populate 

RTLS is accurate. According to RTLS program officials, these activities 

are resource intensive and have resulted in some VAMCs requesting that 

RTLS be installed at their facilities during the later stages of RTLS 

implementation. RTLS program officials told us that they have made 

training available to VAMCs to help them conduct the necessary 

preparations for RTLS. However, officials told us that ultimately these 

preparation activities need to be completed by each VAMC prior to RTLS 

installation.

Furthermore, funding has not 

been identified for the installation of wireless capabilities at the VAMCs in 

several networks; however, RTLS program officials told us that they are 

working with VA’s Office of Information Technology to secure funding for 

this purpose. RTLS program officials plan to implement RTLS first at 

VAMCs that have full wireless capabilities, but nationwide RTLS 

deployment hinges on wireless capabilities being in place at each VAMC.

 

38Officials originally estimated that the installation of wireless capabilities would take 

6 months to complete at each VAMC; however, they have found that this process takes 

9 months to complete.
 

Page 23 GAO-13-336 Veterans Health Administration Logistics Program

In August 2011, VHA established a program executive office, within its 

Procurement and Logistics Office, for providing logistics support and 

managing standardization. This office consists of a logistics operations 

office and six program-management offices—aligned along functional 

areas—that are tasked with identifying medical supplies and equipment 

for standardization and facilitating the process of standardizing them.39

VHA had originally planned to allocate about 140 staff members to the 

entire program executive office; however, as of February 2013, according 

to Procurement and Logistics Office officials, only 43 positions had been 

filled. Officials told us that efforts to hire additional staff are currently on 

hold because VHA intends to evaluate the effectiveness of the new 

program executive office before committing additional resources to it. At 

The logistics operations office is responsible for providing overall logistics 

program support across VHA, which includes monitoring VAMCs’ 

compliance with national contracts and blanket purchase agreements and 

other logistics metrics. According to VHA officials, each of the six program 

management offices are expected to collaborate with teams of clinicians 

and other stakeholders, who can provide insight on identifying certain 

medical supplies and equipment for standardization and assessing the 

feasibility of standardizing these items; coordinate with VA’s Office of 

Acquisition and Logistics to develop business cases for standardizing 

these items; and coordinate with VA’s contracting offices, which are 

responsible for establishing nationwide contracts for standardized items. 

After contracts have been established, the program-management offices 

are responsible for helping VAMCs implement standardized items. 

According to VHA officials, the program-management offices will also 

collaborate with the network commodity standardization committees to 

avoid duplication of efforts. At the time of our report, the programmanagement offices had identified 179 items as potential standardization 

opportunities. VA’s contracting offices had awarded national contracts for 

six of these items and a regional blanket purchasing agreement for one 

item. However, VHA did not provide documentation for some of these 

items to support that VAMCs have been instructed to implement them at 

their facilities. We were unable to verify whether VAMCs were using the 

standardized items, and Procurement and Logistics Office officials told us 

that they were not systematically assessing VAMCs’ compliance.

 

39The six program management offices are titled Surgery, Medical, Clinical Support, 

Ancillary, Advanced Systems, and Prosthetics.

VHA’s New Program 

Executive Office for 

Providing Logistics 

Support and Managing 

Standardization 

Nationwide Faces 

Uncertainty about Its 

Continued Implementation
 

Page 24 GAO-13-336 Veterans Health Administration Logistics Program

the time of our report, officials had not yet developed a plan for 

conducting this evaluation.

To its credit, VHA has developed new requirements to address 

deficiencies in its logistics program that it expects will help improve 

patient safety and the cost-effective use of resources. However, because 

VAMCs we visited and the associated networks have only partially 

complied with these requirements, the potential risks to patient safety and 

the inefficient use of resources remain.

VHA’s efforts to enhance its logistics program—developing a new 

inventory management system, known as SOARD, rolling out a new 

system for electronically tracking certain medical supplies and equipment 

at VAMCs, known as RTLS, and establishing a program executive office 

that provides logistics support and manages standardization of medical 

supplies and equipment VHA-wide—offer VHA potential benefits in terms 

of patient safety and the cost-effective use of resources. However, these 

efforts face major concerns and uncertainties regarding their 

implementation. Unless appropriately addressed, VHA may not 

successfully implement these efforts and could face unnecessary cost 

increases and wasted resources. Specifically, without an evaluation plan 

that includes specific criteria and appropriate solutions to address the 

concerns and uncertainties we identified, VHA’s SOARD pilot runs the 

risk of not meeting its objectives and—in the worst case—meeting a 

similar fate as previous unsuccessful attempts to update VHA’s inventory 

management systems. Furthermore, the implementation plan for RTLS 

lacks updated timelines to take into account (1) establishing 

interoperability between RTLS and VHA’s inventory management 

systems and SOARD, (2) installing wireless capabilities at VAMCs, and 

(3) data cleansing activities. An implementation plan with updated 

timelines would help ensure that VHA remains on track for implementing 

RTLS. Lastly, VHA does not currently have a plan for evaluating the 

success of its new program executive office for providing logistics support 

and managing standardization, which would help it determine whether 

this office is meeting its intended goals of improving VHA’s logistics 

program and increasing cost effectiveness.

Conclusions 
 

Page 25 GAO-13-336 Veterans Health Administration Logistics Program

We recommend that the Secretary of Veterans Affairs direct the Under 

Secretary for Health to take the following actions:

To assist VAMCs and networks in complying with VHA’s new logistics 

requirements, and thereby help ensure patient safety and the costeffective use of resources,

• determine appropriate resource levels for VAMC logistics programs 

and provide training and best practices to VAMCs to help them

• ensure that logistics staff, rather than clinical department staff, 

manage all medical supplies;

• ensure that all items that VAMCs purchase are captured on their 

lists of approved medical supplies and RME; and

• enter all stock surgical and dental instruments into the appropriate 

inventory management system, 

• reinforce through communication the requirement that VAMCs 

develop a formal process for reviewing and approving emergency 

purchases of medical supplies and RME,

• develop a systematic method using available VHA data to assist 

VAMCs in tracking compliance with national contracts and blanket 

purchase agreements, and

• issue guidance to VAMCs and networks regarding interpretation of the 

Management Quality Assurance Service checklist and reinforce 

through communication the requirement that VAMCs correct 

deficiencies within 90 days after they were identified or request an 

extension and that networks use the entire checklist when conducting 

their reviews of VAMC logistics programs and complete their review 

within the required time frame.

To address concerns about VHA’s pilot of a new inventory management 

system, known as SOARD, develop a written plan that outlines how the 

SOARD pilot will be evaluated before the pilot is expanded to additional 

VAMCs or preparations are made to implement SOARD nationally. This 

plan should include formal criteria for evaluating the overall performance 

of the pilot, which are based on consistent data collected from each pilot 

site, as well as a strategy for addressing concerns about

Recommendations for 

Executive Action
 

Page 26 GAO-13-336 Veterans Health Administration Logistics Program

• funding needed for SOARD,

• staffing resources needed for SOARD implementation at VAMCs, and

• establishing interoperability between SOARD and legacy systems.

To address concerns about VHA’s implementation of a system for 

electronically tracking medical supplies and equipment, known as RTLS, 

develop an updated implementation plan that reflects timelines for

• establishing interoperability between RTLS and VHA’s inventory 

management systems and SOARD,

• installing wireless capabilities at VAMCs once funding is available for 

this effort, and

• completing data cleansing activities at VAMCs in preparation for 

RTLS implementation.

To address concerns about VHA’s program executive office for providing 

logistics support and managing the standardization of medical supplies 

and equipment, develop a plan for measuring the success of the program 

executive office.

VA provided written comments on a draft of this report, which we have 

reprinted in appendix I. In its comments, VA generally agreed with our 

conclusions, concurred with our recommendations, and described the 

department’s plans and time frames to implement each of our seven 

recommendations. VA did not provide any technical comments.

With respect to its plans for addressing our recommendations, VA 

described specific actions that VHA, networks, and VAMCs plan to take to 

improve VAMCs’ and networks’ compliance with VHA’s logistics 

requirements. VA also stated that it is developing a written plan that 

outlines how the SOARD pilot will be evaluated before the pilot is 

expanded and includes a strategy for addressing concerns we identified 

about the pilot. Moreover, VA stated that it is updating its existing 

implementation plan for RTLS and developing a plan for measuring the 

success of its program executive office for providing logistics support and 

managing standardization of medical supplies and equipment. 

Agency Comments 

and Our Evaluation
 

Page 27 GAO-13-336 Veterans Health Administration Logistics Program

In its general comments, VA disagreed with our assessment that 

uncertainty exists about the continued implementation of VHA’s program 

executive office for providing logistics support and managing 

standardization of medical supplies and equipment. Specifically, VA 

stated that there is no uncertainty about the continued implementation of 

this office. VA stated that this office is being stood up in three hiring 

phases, the first of which is 86 percent complete, with a planned 

completion date still months away. However, at the time of our audit work, 

the implementation plan we received from VHA officials stated that the 

first hiring phase was scheduled to be completed by September 2012, a 

milestone target that VHA has exceeded by more than 6 months. 

Moreover, VHA officials told us that VHA intended to evaluate the 

effectiveness of the program executive office before deciding whether to 

proceed to the second and third hiring phases, which further indicates 

uncertainty as to whether or how VA will proceed with phases 2 and 3, 

pending the outcome of its evaluation. Therefore, we concluded that 

uncertainty existed with regard to the continued implementation of this 

office. VA also stated that VHA currently has a “plan in development” to 

evaluate the success of its program executive office; however, VA has 

provided us with neither a copy of this plan for review nor specifics on the 

nature of the plan it is developing.

We are sending copies of this report to appropriate congressional 

committees and the Secretary of Veterans Affairs. The report is also 

available at no charge on the GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-7114 or williamsonr@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs are on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix II. 

Sincerely yours,

Randall B. Williamson

Director, Health Care
Appendix I: Comments from the Department of 

Veterans Affairs

Page 28 GAO-13-336 Veterans Health Administration Logistics Program

Appendix I: Comments from the Department 

of Veterans Affairs
Appendix I: Comments from the Department of 

Veterans Affairs

Page 29 GAO-13-336 Veterans Health Administration Logistics Program
Appendix I: Comments from the Department of 

Veterans Affairs

Page 30 GAO-13-336 Veterans Health Administration Logistics Program
Appendix I: Comments from the Department of 

Veterans Affairs

Page 31 GAO-13-336 Veterans Health Administration Logistics Program
Appendix I: Comments from the Department of 

Veterans Affairs

Page 32 GAO-13-336 Veterans Health Administration Logistics Program
Appendix I: Comments from the Department of 

Veterans Affairs

Page 33 GAO-13-336 Veterans Health Administration Logistics Program
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 34 GAO-13-336 Veterans Health Administration Logistics Program

Randall B. Williamson, (202) 512-7114 or williamsonr@gao.gov

In addition to the contact named above, Mary Ann Curran, Assistant 

Director; Kathryn Black; Elizabeth Conklin; and Michael Zose made key 

contributions to this report. Elizabeth Morrison assisted in the message 

and report development; and Sandra George provided legal support.

Appendix II: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(291034)
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