The Coalition for Common Sense in Government Procurement (the Coalition) continues to collect recommendations for the Government Procurement Efficiency List (GPEL). Thank you to all those who have submitted recommendations. We are organizing and fleshing out the submitted recommendations.
In looking at the incoming recommendations, there continues to be a focus on adopting commercial best practices to improve the efficiency and effectiveness of government operations for the American people. For example, the Department of Veterans Affairs (the VA) has an opportunity to leverage commercial best practices to enhance the efficiency and effectiveness of medical supply logistics in delivering best value healthcare to veterans. Specifically, the Veterans Health Administration (VHA) can and should adopt a commercially available, best-in-class, automated ordering platform for medical supplies and devices.
The VA has made steady and significant progress in the management and operation of its prime vendor distribution contract and Supply Blanket Purchase Agreements (BPA) for the Medical/Surgical Prime Vendor (MSPV) program. Currently, there over 38,000 approved products available via the Supply BPAs. These products represent higher volume items that are purchased by medical treatment facilities across the VA. The MSPV program accounts for approximately $700 to $800 million in purchases in support of veteran’s healthcare. This represents about 15 percent of the VHA’s $5 billion annual spend on medical supplies and equipment.
Significant challenges across the medical supply chain remain. As a threshold matter, it is important to note that the remaining 85 percent of supplies and products are ordered manually across the VA. Manual orders increase overall costs, undermine compliance, and limit transparency. For example, open market, government credit card orders typically include increased fees for products that are offered at higher prices than available through the MSPV program and create compliance or gray market risks.
An automated ordering platform would provide VHA with the opportunity to leverage the pricing and value associated with the suite of products offered via the MSPV program and other VA contracts. Moreover, the MSPV program also delivers the benefit of Trade Agreements Act (TAA) compliant products. Open market purchases via government credit card increase costs and supply chain risks. An automated ordering platform tied to existing contracts and sources through Electronic Data Interchange (EDI), will reduce or eliminate credit fees while leveraging existing contract vehicles for price, quality, and compliance. A commercial, best-in-class automated ordering platform will provide transparency on the purchasing patterns and demand profile across the VA. In turn, this transparency would empower the VA to make sound, data driven decisions regarding contract structure to enhance greater value for veterans and the American people.
Attached is the Coalition’s White Paper “Medical Supply Chain Commercial Best Practices Compared to the VA” along with our summary document, “Recommendation: VHA to adopt a best-in-class automated ordering platform for Medical Supplies and Devices.” These documents outline numerous benefits to the VA and VHA in adopting a commercial, best-in-class ordering platforms.
In sum, the VA and VHA have a timely and significant efficiency opportunity for the VA Medical Supply Chain. Adopting a commercial, best-in-class ordering platform will enhance the delivery of more efficient, cost effective, best value healthcare for veterans. The Coalition looks forward to discussing with the VA the supply chain benefits associated with adopting a commercial, best-in-class ordering platform.