The Department of Veterans Affairs (VA) said today that it is transitioning away from its supply chain management system – the Defense Medical Logistics Standard Support (DMLSS) – and is in the market for a new solution contract.

The VA adopted the $2.6 billion DMLSS system from the Defense Health Agency (DHA) in 2019, but the agency is now reducing the scope and funding of its interagency agreement with DHA.

“VA’s supply chain efforts are built around one goal: providing a cost-effective supply chain that ensures the delivery of world-class healthcare and benefits to veterans and their families,” said Michael D. Parrish, VA’s chief acquisition officer.

“As the largest integrated healthcare system in the country, our supply chain logistics solution must meet the needs of the 1,298 medical facilities in our network and the millions of veterans that we serve – and this transition will help us do exactly that,” he added.

In February, the VA said it was taking a deeper look at DMLSS to determine if it was the best fit for the agency, and was exploring other options. This came after the VA’s Office of Inspector General (OIG) released a report in November 2021 that found failures in VA’s pilot project to deploy the DMLSS system at the Captain James A. Lovell Federal Health Care Center (Lovell) in North Chicago, Ill.

Specifically, the OIG found the DMLSS system did not meet 44 percent of the high-priority business requirements identified by Lovell staff as essential to successful operations.

To ensure it creates a supply chain solution that improves the veteran experience, VA told reporters today that it will cancel future DMLSS deployments. The agency said it will work with DHA to modify the agreement and allow VA to continue to fund joint operations at Lovell.

The VA said it expects a new supply chain logistics solution contract by 2023. In the coming months, VA will also establish the new Office of Enterprise Supply Chain Modernization to oversee the transformation effort.

“In addition to implementing lessons learned from VA’s collaboration with DHA, VA will be partnering closely with government and industry to ensure the department is using best practices in addressing its largest and most complex supply chain challenges,” the VA said.

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Grace Dille
Grace Dille
Grace Dille is MeriTalk's Assistant Managing Editor covering the intersection of government and technology.