SDV Contracting Draws Scrutiny in Congress Revelations of fraud in the service-disabled veterans contracting program sparked calls in Congress for tighter controls. As reported earlier. the Government Accountability Office found that a sample of 10 companies had received $100 million in SDV contracts, although some were ineligible for the program and several were passing through most or all of their work to large companies. GAO’s chief investigator, Gregory Kutz, said, “Some people refer to it as ‘rent-a-vet.’” After Kutz presented the findings to a subcommittee of the House Veterans Affairs Committee, Rep. Phil Roe, R-TN, declared himself “speechless.” Rep. Steve Buyer, R-IN, said he was “stunned.” Most companies receiving SDV set-aside contracts self-certify their eligibility. The Veterans Affairs Department began a verification program last year, but the department will not require its contractors to be verified until Jan. 1, 2012. Even after that, other federal agencies can still award SDV contracts to companies that self-certify. “Obviously, self-certification is not working,” Rep. Buyer said at the Dec. 16 hearing. He called for immediate action to require verification of all companies: “People are gaming the system out there and we ought to change it as quickly as possible.” VA officials said immediate change is impossible. The verification process includes a site visit as well as reviews of companies’ documentation. However, GAO’s Kutz said VA has verified the eligibility of two of the companies that were found to be fronts, including one whose address was a mail drop. Kutz also said none of the companies cited by GAO has been suspended or debarred from federal contracting. Maureen Regan, chief counsel to VA’s inspector general, said she knows of no SDV company that has been debarred. “If you don’t make a poster child out of some of these people, no one will take you seriously,” Kutz warned. An SDV business owner, Tony Jimenez of Microtech, added, “Nobody is saying, ‘Shame on you, don’t do that, go to jail.’” The hearing also explored department-wide problems in VA contracting. GAO auditor Kay Daly said the department’s lax oversight of contracts means it may be overpaying for goods and services. Daly blamed much of the oversight problem on the decentralized nature of VA procurement. Most contracts are awarded by VA medical centers around the country. She said headquarters has no system for tracking details of spending; when auditors wanted such data, they had to ask vendors to provide it. “VA cannot identify what it bought, who it bought it from, whether the products or services were received or whether the prices paid were fair and reasonable,” she testified. VA officials said they have taken a number of steps to remedy the problems. An Acquisition Academy has been established to improve workforce training and the department is setting up a Technology Acquisition Center to centralize IT procurement. Daly acknowledged that VA has issued new policies, but said it remains to be seen whether they will produce results. Rep. Buyer has introduced legislation, H.R. 4221, to tighten controls over VA contracting. He said he is seeking bipartisan support.