Flawed computer contract costs VA millions

WASHINGTON – The Department of Veterans Affairs backdated a key document and violated other rules as it pushed through a $100 million computer security contract that resulted in inflated prices and duplicate payments, according to a previously undisclosed report.

In the end, the contract turned into “an open checkbook” for various VA expenses, and the agency today can’t detail the whereabouts of some $35 million in equipment purchased under the contract, the report by the VA’s inspector general said.

Indeed, the agency blew through the contract’s funds so quickly that the VA was temporarily left without proper defenses against computer hackers.

As it responds to concerns about the treatment of veterans served by its health care and disability programs, the VA’s internal auditor has said in recent months that the agency has another significant problem: the way it contracts for millions of dollars in supplies and personnel.

With a budget of more than $70 billion and more than 235,000 employees, the VA is one of the largest departments in the federal government. But the VA inspector general has repeatedly found that the agency doesn’t follow proper contracting procedures, resulting in “significant dollar losses and failed projects,” in the words of the most recent report.

Although it disputed some of the inspector general’s legal interpretations, for the most part the VA accepted the investigator’s findings and promised to make fixes. In response to questions about this report and others, a VA spokesman said that the agency was having trouble keeping good workers and that annual turnover in its central acquisition office has been more than 60 percent.

“VA is committed to being a good fiscal steward of taxpayer dollars,” said spokesman Matt Burns. The agency has taken several steps to help prevent future problems, he said.

An official for SecureInfo Corp., the company that received the contract, disagreed with the inspector general’s conclusions. Stewart Curley, the chief financial officer, said the VA “at no time during the review raised any concerns to us regarding” his company’s activities.

The Feb. 26 inspector general’s report detailed a series of decisions between 2002 and 2005 to purchase computer services.

In 2002 testimony before a congressional subcommittee, a top VA official said the agency had conducted a rigorous effort to award the contract to a collective bid from several companies joined together under the Veterans Affairs Security Team.

The contract was valued at $103 million. But the inspector general found several problems in the VA’s decisions, resulting in “uncontrolled spending, overpayments and illegal contracting actions.”