GAO-13-714R Veterans Affairs Consulting

441 G St. N.W.

Washington, DC 20548

July 30, 2013

The Honorable Mike Coffman

Chairman

Subcommittee on Oversight and Investigations

Committee on Veterans’ Affairs

House of Representatives

The Honorable Bill Johnson

House of Representatives

Department of Veterans Affairs: Available Data Not Sufficiently Reliable to Describe Use 

of Consulting Services

You requested that GAO review the Department of Veterans Affairs’ (VA) use of consultants. 

This review focuses on how VA has used consulting services and what is known about the costs

of these services. However, available data were not sufficiently reliable to identify the costs of 

consulting services used by VA. Therefore, this report outlines the data limitations related to 

consulting services for VA as well as some of the uses of consulting contracts.

To identify how VA has used consulting services and their costs, we identified contracts in the 

federal government’s procurement information system—referred to as the Federal Procurement 

Data System-Next Generation (FPDS-NG)—that VA awarded in fiscal years 2011 and 2012 and 

had been assigned North American Industry Classification System (NAICS) codes that 

contained the word consulting. According to the United States Census Bureau, NAICS is the 

standard used by federal statistical agencies in classifying business establishments for the 

purpose of collecting, analyzing, and publishing statistical data related to the U.S. business 

economy. From these contracts, we identified seven contracting offices within VA that were 

among the largest users of consulting services as measured by the dollar value of contracts 

awarded. These seven contracting offices included three within VA’s Office of Acquisition, 

Logistics, and Construction: (1) the Acquisition Business Service, Washington, D.C.; (2) the 

Strategic Acquisition Service, Frederick, Maryland; and (3) the Technology Acquisition Center, 

Eatontown, New Jersey. The remaining four contracting offices were within the Veterans Health 

Administration (VHA)—two within the Program Contracting Activity Central and two Veteran 

Integrated Service Network contracting offices.1

 

1

For the purpose of selecting contracting offices to include in our review, we counted VHA’s Program Contracting 

Activity Central as two contracting offices because in the FPDS-NG separate office contracting codes were assigned 

to offices responsible for energy and health technology contracting. The network contracting offices included in our 

review performed contracting for Veteran Integrated Service Network 5 (VA Capitol Health Care Network) and 

Veteran Integrated Service Network 22 (Desert Pacific Healthcare Network). 

 We interviewed contracting officials at each of 

the seven offices to obtain an overview of how the offices contracted for consulting services and 

for what purposes. We also discussed the officials’ perspectives on what they considered to be 

a consulting service.
Page 2 GAO-13-714R Veterans Affairs Consulting

We also selected 24 contracts—4 contracts each for six of the seven contracting offices—to 

obtain a better understanding of how VA uses consulting services and to determine if officials 

considered these contracts to be for consulting. We selected the contracts from fiscal year 2011 

and 2012 data using criteria that allowed us to select contracts with a variety of characteristics.2

 

First, we chose the contract with the highest value, as measured by the dollar value of the 

contracts, and then we randomly selected three other contracts with the following 

characteristics: (1) competitively awarded, (2) awarded noncompetitively, and (3) coded as 

being closely associated with an inherently governmental function.3

We conducted this performance audit from November 2012 through July 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.

 We later excluded 2 of the 

24 contracts in our sample because no work was performed, leaving us with 22 contracts in our 

sample. For the seventh office, the Strategic Acquisition Service, we used different selection 

criteria for a pretest and so we excluded those 4 contracts from our contract analyses. To 

determine if our use of NAICS codes would enable us to identify a group of consulting contracts 

that was reliable for our intended purposes, we asked agency officials to identify if the NAICS 

code associated with each of our 22 sample contracts correctly classified the service provided

and if the officials considered the contract to be for consulting services. 

Results in Brief

Two primary factors limited our ability to identify a list of consulting contracts that was 

sufficiently accurate and complete for identifying the types and costs of consulting services used 

by VA. First, there is no consistently used definition for consultant or consulting services across 

VA that we could apply for our intended purposes.4

Background 

 Second, there are data limitations 

associated with identifying consulting services at VA. NAICS codes can be used to classify both 

consulting and nonconsulting services and according to VA officials, in some cases, contracting 

officers had applied the incorrect NAICS code to contracts. Nevertheless, VA offices were able 

to provide information on how they used consulting services and identified contracts among 

those in our sample that they considered to be consulting services.

VA is one of the U.S. government’s largest agencies, and administers directly, or with the 

assistance of other agencies, programs that provide health care, benefits, and other services to 

 

2

In the case of two offices, where we confirmed that the contracts were not for consulting prior to the interview, we 

selected other contracts relevant to our purposes as substitutes. 

3

For new civilian service contracts awarded on or after March 1, 2012, the Office of Federal Policy (OFPP) instructed 

agencies to indicate in FPDS-NG “if the services provided under the contract are predominantly for functions closely 

associated to inherently governmental ones.” OFPP Memorandum, “Service Contract Inventories,” (Dec. 19, 2011). 

Also, see GAO, Managing Service Contracts: Recent Efforts to Address Associated Risks Can Be Further Enhanced, 

GAO-12-87 (Washington, D.C.: Dec. 7, 2011) for additional information on the risks of using such contracts.

4

Federal Acquisition Regulation (FAR) § 31.205-33 defines “professional and consultant services” but for the purpose 

of identifying the allowability of certain contractor costs. We did not find this definition useful for the purpose of 

identifying consulting contracts at VA because of its narrow focus.
Page 3 GAO-13-714R Veterans Affairs Consulting

service members, veterans, their dependents, and survivors. VA consists of three primary 

organizations: the Veterans Benefits Administration, VHA, and the National Cemetery 

Administration. In fiscal year 2012, VA contracted for about $8.95 billion in services. VA’s Office 

of Acquisition, Logistics, and Construction provides acquisition, logistics, construction, and 

leasing support to VA administrations and VA staff offices, and awards about 80 percent of all

contracts assigned a NAICS code that includes the word consulting. 

Key Factors Limit the Ability to Identify Consulting Services and Costs 

Officials across major VA offices did not use a consistent definition of consulting services and 

had different perspectives on what types of services they considered consulting. For example, 

officials from one office included in our study said they considered all advisory and assistance 

service contracts—contracts used by federal agencies to acquire three broad areas of services: 

management and professional support; studies, analyses, and evaluations; and engineering and 

technical services—to be consulting contracts, but did not believe that all consulting contracts 

could be classified as advisory and assistance service contracts.

5

Based on our interviews and analyses, we determined that using NAICS code descriptors would 

not produce a set of contracts that we could reliably use to describe or analyze the costs of VA 

consulting services. Further, there is no means for contracting officers to track obligations for 

such contracts in FPDS-NG, as there is no specific definition or field for coding consulting 

contracts in FPDS-NG. Of the 22 contracts we selected based on our criteria—including NAICS 

code descriptors containing the word “consulting”—agency officials considered 14 contracts not 

to be for consulting services. We asked agency officials responsible for each contract to identify 

if the NAICS code was assigned correctly and if they considered the contract to be for 

consulting. We asked both of these questions because of the possibility that a contract’s 

services could be correctly classified with a NAICS code for consulting but the agency officials 

might not consider the contract to be for consulting. See table 1 for a summary of their

responses. 

In contrast, officials from 

several other contracting offices indicated that while consulting services could be classified as 

advisory and assistance service contracts, not all advisory and assistance service contracts 

were for consulting services. In addition, a few contracting officials noted that they considered 

“advice” to be consulting, but not the work conducted to inform the advice or any resulting

written product.

 

5

FAR Subpart 37.2—Advisory and Assistance Services. The FAR definition of “advisory and assistance services” 

states that all advisory and assistance services are classified in one of the three defined subdivisions, which are the 

three areas of services listed above. Also, see GAO, Federal Contracting: Congressional Action Needed to Address 

Long-standing Problems with Reporting of Advisory and Assistance Services, GAO-08-319 (Washington, D.C.: Mar. 

31, 2008) where we reported that agencies reporting of advisory and assistance service contract obligations were 

inaccurate to the point of being meaningless and are not used for management purposes.
Page 4 GAO-13-714R Veterans Affairs Consulting

Table 1: Number of Contracts VA Officials Considered to be for Consulting 

Considered to be for 

consulting 

Not considered to be 

for consulting 

NAICS code assigned 

correctly 

6 10

NAICS code assigned 

incorrectly 

2 4

Total 8 14

Source: GAO summary of VA officials’ responses.

As indicated in table 1 above, in 10 cases, we found that although contracting officers reported 

that they had assigned a correct NAICS code to a contract, one that could be used to classify 

consulting services, they did not necessarily consider the contract to be for consulting. For 

several of these contracts, we found that a single NAICS code was used to classify both 

consulting and nonconsulting services. For example, one computer-related NAICS code can be 

used to classify both consulting and nonconsulting services for computer system planning and 

design and was applied to a contract to acquire computer help desk support staffed by technical 

professionals. Contracting officials explained that they did not consider such support as a 

consulting service but that this NAICS code best described the service acquired. 

Further, contracting officers reported that office staff had assigned an incorrect NAICS code to

six other contracts we selected, and of these, four were considered not to be for consulting 

services. In two of these cases, the contracting officers reported that the NAICS codes were 

incorrect because their task order contracts were issued under a governmentwide contract

awarded by the General Services Administration. For example, one task order was for the 

installation of solar panels at a VA facility and the officials did not consider the work performed 

to be a consulting service. They explained that NAICS codes assigned by the General Services 

Administration to its contracts are pre-populated to the task orders subsequently issued by 

individual government agencies, and when not suitable, can be difficult to change. 

VA Uses Consulting Services Contracts for a Variety of Purposes

For those contracts that VA officials considered to be for consulting, VA procured a variety of 

services, including program evaluations, engineering support services, and gathering data to 

support decision making. For example, an Office of Acquisition, Logistics, and Construction 

official identified a contract used to acquire expertise to facilitate a major human resource 

initiative as a consulting service. The contracting officer considered this to be consulting 

because the contractor produced recommendations. In another example of a consulting 

service, a VHA office arranged for a contractor to test the operational readiness of an 

emergency department information system and provide training to VA staff. In this instance, the 

contractor was responsible for developing instructional guides for staff and conducting follow-up 

training sessions. 
Page 5 GAO-13-714R Veterans Affairs Consulting

Agency Comments and Our Evaluation

In written comments to a draft of this product (reproduced in the enclosure), the Department of 

Veterans Affairs generally concurred with our finding that the data reviewed could not be used 

to describe the use of consulting services—the desired outcome of the analysis. The agency 

also noted that it disagreed with our characterization that the data are unreliable. However, 

based on generally accepted government auditing standards, data that would not achieve the 

desired outcome of the analysis are unreliable. VA officials reported that they searched the 

FPDS-NG for contracts with NAICS codes that refer to consulting and that such a search does 

identify applicable contracts and obligations. As we reported, using essentially this 

methodology, VA contracting officials considered 14 of the 22 contracts we selected with NAICS 

codes that contained the word “consulting” not to be for consulting even though they were 

coded as such. This data limitation coupled with the fact that there was no consistently used 

definition for consultant or consulting services across VA limited our ability to identify a set of 

consulting contracts that was sufficiently accurate and complete to describe the types and costs 

of consulting services used by VA. Therefore, we maintain that the available data were not 

sufficiently reliable for our purposes of identifying consulting contracts for VA. VA also provided 

technical comments, which we have incorporated as appropriate.

----------- 

We are sending copies of this report to interested congressional committees and the Secretary 

of Veterans Affairs. In addition, the report will be available at no charge on the GAO website at 

http://www.gao.gov. 

If you or your staff have questions about this report, please contact me at (202) 512-4841 or 

mackinm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs 

may be found on the last page of this report. Key contributors to this report were LaTonya Miller 

(Assistant Director), Marie P. Ahearn, Sonja Bensen, Andrea Bivens, Virginia A. Chanley, 

Danielle Greene, and Julia M. Kennon.

Sincerely yours,

Michele Mackin

Director, Acquisition and Sourcing Management

Enclosure 
Page 6 GAO-13-714R Veterans Affairs Consulting

Enclosure I: Comments from the Department of Veterans Affairs
Page 7 GAO-13-714R Veterans Affairs Consulting

(121090)
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