Summary: The Department of Veterans Affairs' (VA) Vocational Rehabilitation and Employment (VR&E) program provides services such as vocational counseling and job training to assist veterans with service-connected disabilities obtain and maintain suitable employment and achieve maximum independence in daily living. In fiscal year 2006, the VR&E program obligated about $702 million and served about 89,000 veterans. The Veterans Benefits Administration (VBA), which administers the VR&E program, provides some services to veterans through two types of contracts--national contracts and local contracts. In fiscal year 2003, VA adopted the National Acquisition Strategy (NAS) to award contracts at the national level to ensure that veterans have access to the same quality and types of VR&E services across regional offices. These national contracts, once awarded, are implemented by VA's regional offices. Services available under these national contracts include initial evaluations, case management, and employment placement assistance. In fiscal year 2006, VR&E spent about $15 million through national contracts. There are 165 national contracts currently active in fiscal year 2007. Regional offices also can negotiate and implement local contracts for services that are not provided through national contracts such as tutoring and computer skills evaluations. In fiscal year 2006, VR&E spent about $12 million through local contracts. VR&E contracting officers are responsible for negotiating the terms of local contracts. Contracting officer's technical representatives, often VR&E counselors themselves, assist in managing both national and local contracts. Recent studies of the VR&E program have raised concerns about its contracting practices. In March 2004, the VR&E Task Force recommended that VA enhance VR&E contracting practices by taking several actions, including revising the scope of national contracts and developing contracting training and hiring contracting specialists to improve the contracting expertise of VR&E staff. According to the VR&E Task Force, VR&E's capacity to manage its contracts could be further improved by enhancing the usefulness of its case management data system. For example, the VR&E Task Force recommended that VA improve its case management data system so that purchased contract services could be tracked by the counselor who orders the services or by the veteran that receives the services. In February 2005, the VA Inspector General recommended that existing national contracts be renegotiated to better reflect market rates for services because VA was at risk of paying excessive prices for VR&E services purchased through its current national contracts. The report also noted that VA should strengthen regional office oversight and management of contracts. To address Congressional interest in VR&E contract management, we conducted a study to determine how VA has improved VR&E contract management practices and identify challenges VA continues to face. Specifically, Congress asked us to answer the following questions: (1) What progress has VA made in implementing selected recommendations on contracting for VR&E services made by the VR&E Task Force and the VA Inspector General? (2) What are VA's key challenges in improving its management of VR&E service contracting?
VA reports progress in implementing contracting-related recommendations made by the VR&E Task Force and VA Inspector General. However, some key recommendations have not yet been implemented. Specifically, VA regional offices requested and obtained lower prices under existing national contracts. VA has taken steps to increase regional office VR&E staff contracting expertise. VA has taken steps to develop additional regional office internal control policies and procedures for contracting activities. VA's efforts to address issues with contracting data are on hold. VA has not yet awarded new national contracts. Key challenges remain to improving VA's management of VR&E service contracting. Specifically, we found that (1) regional offices are not fully applying VA's contracting guidance; (2) current training does not adequately prepare contracting officers to manage contracts; (3) regional offices report delays in communication with VA headquarters on contracting questions, but VA is taking actions to address these concerns; (4) VA's management of VR&E contracting is limited by inadequate reporting capabilities; and (5) inadequate internal controls over contracting data raise reliability concerns.
