As the Department of Veterans Affairs (VA) nears a contract award for its Supply Chain Modernization (SCM) program, lawmakers are calling on the VA to provide more information on the coming contract to avoid another “failed” IT modernization project.
During a House Committee on Veterans’ Affairs Subcommittee on Technology Modernization hearing late Tuesday afternoon, lawmakers explained that they don’t want the SCM program to face the same challenges as the VA’s previous supply chain management system – the Defense Medical Logistics Standard Support (DMLSS).
The VA announced in December 2022 that it was transitioning away from DMLSS after it failed to meet agency expectations. The agency issued a solicitation for a new supply chain management system in late June 2023, and it is now nearing a contract award.
Likewise, the House lawmakers expressed concern that the SCM program will face similar setbacks as the VA’s Electronic Health Records Modernization (EHRM) program – which is currently in a reset period as the VA and contractor Oracle Cerner make improvements.
“The Supply Chain Modernization project is a gigantic effort the likes of which we have only seen with the EHR, and we know how that has turned out,” said Chairman Matt Rosendale, R-Mont. “Now, we are hearing that a contract award is imminent, but we still have only a rough idea of what the project may entail.”
“We have had expert testimony time and time again come before this committee and say these large software programs don’t work,” he continued. “We need to break it down into smaller bites and allow competition to bring the prices down and the strongest vendors to come forward instead of relying upon two or three of the largest vendors that continue to show up before us that are not delivering on what they’re supposed to.”
Both Chairman Rosendale and Ranking Member Sheila Cherfilus-McCormick, D-Fla., expressed frustration that the VA has yet to provide the committee with an official briefing or budget for the SCM project.
Additionally, they explained that the VA provided the committee with over 200 pages of documents related to the SCM project and forthcoming contract award just 24 hours before the hearing.
“This is unacceptable,” Rep. Cherfilus-McCormick said. “Large modernization efforts, specifically those that are highly integrated across the VA enterprise such as electronic healthcare records and supply chain modernization, require the full breadth of VA support. VA must maintain a leadership role in the modernization and not allow its vendors to dictate product requirements, success matrix, and implementation plans.”
Chairman Rosendale’s VA IT Reform Act requires the VA to submit information to Congress regarding contracts for major IT modernization projects prior to the award of these contracts.
However, the VA has not labeled the SCM effort as such, “leaving the committee largely in the dark regarding this contract,” said Ranking Member Cherfilus-McCormick.
The VA has claimed that it does not need to report this project to Congress because it does not meet the law’s major IT project threshold of $1 billion in lifecycle cost. However, according to the new documents sent to the committee this week, Chairman Rosendale said that “the lifecycle cost is somewhere between $9 and $15 billion.”
When asked about the discrepancy, VA Chief Acquisition Officer Michael Parrish said, “the key reason it’s not considered a major IT program is because we’ve not established a firm budget or a firm schedule.”
Parrish explained the $9 to $15 billion is “an initial cost estimate” and “not a valid budget to be able to commit to yet.” He said the VA anticipates meeting the reporting requirements after the SCM’s pilot phase.
“We’re not obligating taxpayer dollars without fully understanding what our veterans are going to get and our workforce are going to get for a solution,” Parrish emphasized.
“Right now, in our budget, we don’t have any budget beyond ‘23 and ‘24 dollars to put towards it, and we don’t yet know what we could put in that budget,” added Dewaine Beard, the VA’s principal deputy assistant secretary (PDAS) and deputy CIO for OIT. “So, right now, it’s under $50 million that we’re looking at. We don’t really feel that it’s risky enough, and we don’t feel like we have enough information to give you to have a useful conversation yet about the project.”
The VA confirmed that it is meeting the reporting requirements for its other two major IT modernization projects: the EHRM program and the Financial Management Business Transformation (FMBT) program.
Beard pledged the VA’s commitment to provide regular reports to the committee on the SCM program going forward.
“Congressman Rosendale, our goal is not to game the system and attempt to get below the reporting threshold that’s in law,” Beard concluded. “We are trying to understand what is possible for us to afford and then roll forward.”
