VA’s loy­alty to re­verse auc­tion firm raises red flags

The Washington Times Weekly - - National -

col­leagues, re­fer­ring to the VA pro­cure­ment of­fi­cial, Jan Frye.

Mr. Frye an­gered FedBid by en­act­ing a mora­to­rium in 2012 on the use of re­verse auc­tions amid com­plaints from sup­pli­ers about costs.

In the wake of the re­port, Rep. Mike Coff­man, Colorado Repub­li­can and chair­man of the House Vet­er­ans’ Af­fairs in­ves­tiga­tive sub­com­mit­tee, ques­tioned whether FedBid should be al­lowed to con­tinue do­ing business with the VA.

FedBid “was ac­tively con­spir­ing to de­fame an hon­or­able pub­lic ser­vant in an at­tempt to pro­tect a friendly, cor­rupt bu­reau­crat and con­tinue push­ing a sys­tem of con­tracts that un­der­cut fair com­pe­ti­tion,” the con­gress­man said in a let­ter last week to new VA Sec­re­tary Robert McDon­ald.

In 2012, VA sup­pli­ers were grow­ing in­creas­ingly con­cerned about FedBid, which han­dled VHA’s re­verse auc­tions — a form of con­tract­ing in which sell­ers, not buy­ers, bid against one another. FedBid han­dles most of the gov­ern­ment’s re­verse auc­tions.

For­mer VA Chief of Staff Harold Gracey, a re­tired ca­reer fed­eral ex­ec­u­tive, worked with a con­trac­tor who put to­gether a group of VA con­trac­tors and sup­pli­ers to ad­vise the agency on how to im­prove its pro­cure­ment process.

In an in­ter­view, Mr. Gracey said the in­dus­try ad­vi­sory group was con­cerned about FedBid and how VA was ac­quir­ing some med­i­cal sup­plies through re­verse auc­tions.

“There were con­cerns they were pay­ing more than they would have had to pay if they’d gone through the fed­eral sup­ply sched­ule,” Mr. Gracey said.

Mr. Gracey helped the ad­vi­sory group put its con­cerns in writ­ing. In an email to Mr. Frye in 2012, Mr. Gracey told the se­nior pro­cure­ment of­fi­cial of con­cerns among VHA con­tract of­fi­cers who were told they had to use FedBid for re­verse auc­tions.

He also passed along a spread­sheet with a list of seem­ingly “in­ap­pro­pri­ate” re­verse auc­tion pro­cure­ments, ac­cord­ing to the email.

Mr. Gracey said the in­dus­try ad­vi­sory group also gave a for­mal pre­sen­ta­tion to top VA ac­qui­si­tion of­fi­cials, in­clud­ing Ms. Tay­lor.

“Susan was ve­he­ment in say­ing they were wrong on almost ev­ery point, that spec­i­fi­ca­tions were ter­rific, con­tract­ing of­fi­cers were do­ing their jobs and VA was in fact not pay­ing any fee to FedBid,” Mr. Gracey told The Times.

He said she be­came so adamant that the meet­ing took a nasty turn.

“I kind of in­ter­rupted and said, ‘Let’s all agree that it works for some things and not for oth­ers and not just ar­gue,” Mr. Gracey said.

In re­sponse to ques­tions Wed­nes­day, a FedBid spokesman pro­vided a state­ment by email say­ing the company co­op­er­ated with the in­spec­tor gen­eral’s in­ves­ti­ga­tion and be­lieves it took “ap­pro­pri­ate ac­tions” to pro­tect its business.

“Our company has al­ways been trans­par­ent about its fee struc­ture and the sav­ings the FedBid mar­ket­place can fa­cil­i­tate when buy­ing com­mod­ity goods and sim­ple ser­vices. It is im­por­tant to point out, as our data demon­strates, that this re­port does not dis­pute that the FedBid mar­ket­place stim­u­lated com­pe­ti­tion that re­sulted in lower prices for VHA.”

The VA in­spec­tor gen­eral’s re­port also re­vealed un­due pres­sure on con­tract­ing de­ci­sions. A sim­i­lar case sur­faced last year when the Gen­eral Ser­vices Ad­min­is­tra­tion in­spec­tor gen­eral re­leased an au­dit de­tail­ing how top man­agers were over­rul­ing con­tract­ing of­fi­cers on be­half of in­flu­en­tial con­trac­tors.

Brian Miller, a for­mer GSA in­spec­tor gen­eral, said Wed­nes­day that although the VA re­port raised trou­bling and se­ri­ous ques­tions, the news wasn’t all bad.

“The good news com­ing out of the IG re­port is that at least one per­son stood up and did the right thing. A coura­geous se­nior pro­cure­ment ex­ec­u­tive did the right thing and suf­fered for it,” Mr. Miller said.

“Con­tract­ing of­fi­cers at times need su­per­vi­sion, but when a su­per­vi­sor is shilling for a par­tic­u­lar con­trac­tor, it un­der­mines the in­tegrity of the whole process and sends the mes­sage to the pub­lic and the en­tire con­tract­ing com­mu­nity that in­flu­ence can buy gov­ern­ment con­tracts,” Mr. Miller said.

FedBid’s ad­vis­ers, em­ploy­ees and direc­tors in­clude Joe Jor­dan and Steve Kel­man, both for­merly in charge of the White House’s of­fice of fed­eral pro­cure­ment pol­icy.

The company also re­lied on for­mer Rep. Chet Ed­wards and re­tired Gen. George W. Casey Jr. to help lobby VA of­fi­cials to over­turn Mr. Frye’s re­verse auc­tion mora­to­rium.

Mr. Jor­dan was not named in the in­spec­tor gen­eral’s re­port. He left the White House in De­cem­ber while Congress and the Gov­ern­ment Ac­count­abil­ity Of­fice were scru­ti­niz­ing re­verse auc­tions.

Mr. Jor­dan over­saw fed­eral pro­cure­ment pol­icy across the fed­eral gov­ern­ment. The Wash­ing­ton Times filed a Free­dom of In­for­ma­tion Act re­quest with the Of­fice of Man­age­ment and Bud­get seek­ing in­for­ma­tion on post-em­ploy­ment ethics rul­ings re­lated to Mr. Jor­dan’s move, but the White House has yet to re­spond.

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