VA and DOD Have Not Awarded Joint National Contracts; Potential Savings Exist

VA and DOD have not awarded national joint procurement contracts for  medical and surgical supplies, and none appear likely in the near future. While a few VA and DOD facilities have obtained modest savings through  local joint contracting agreements, we identified some additional joint  procurement opportunities that have the potential to increase VA’s and  DOD’s savings. Since their 1999 memorandum of agreement, VA’s and  DOD’s procurement efforts have focused on separately contracting for  standardized medical and surgical supplies. Impediments to Joint Procurement

The lack of progress VA and DOD have made in jointly contracting for  medical and surgical supplies has, in part, been the result of their different  standardization approaches—national versus regional. Other impediments  to joint purchasing have been incomplete procurement data and the lack  of a means for each department to identify similar high-volume, high-dollar  purchases. The manufacturing and distribution industry has been reluctant to adopt  more UPNs for medical and surgical supplies. If  implemented, the improvements will place the department in a better  position to jointly purchase with DOD.
What GAO Found

The Department of Veterans Affairs (VA) spent $500 million and the Department of Defense (DOD) spent $240 million for medical and surgical supplies in fiscal year 2001. Since the 1980s, To achieve greater efficiencies through improved acquisition processes and increased sharing of medical resources, VA and DOD signed a memorandum of agreement in 1999 to combine their buying power. VA and DOD saved $170 in 2001 by jointly procuring pharmaceuticals, by agreeing on particular drugs to be purchased, and contracting with the manufacturers for discounts based on their combined larger volume. VA and DOD have not awarded joint national contracts for medical and surgical supplies as envisioned by their memorandum of agreement, and it is unlikely that the two departments will have joint national contracts for supplies anytime soon. However, a few VA and DOD facilities have yielded modest savings through local joint contracting agreements. The lack of progress have made in jointly contracting for medical and surgical supplies has, in part, been the result of their different approaches to standardizing medical and surgical supplies. Other impediments to joint purchasing have been incomplete procurement data and the inability to identify similar high-volume, high-dollar purchases.