VA OIG rips FedBid

Two recent reports from the Veterans Affairs Department’s Office of Inspector General have delivered a one-two punch of negative publicity that has hit the FedBid reverse auction provider.

In the first report, the VA accused Susan Taylor, deputy chief procurement officer at the Veterans Health Administration, of numerous serious ethics violations involving improperly steering contracts to FedBid. Taylor allegedly supplied inside information to FedBid and tried to discredit a VA official who called a moratorium on reverse auctions. The OIG also outlined Taylor’s illicit romantic relationship that may have played a role in her motivations.

VA officials have removed Taylor from her position and have initiated steps to quickly terminate her employment with the VA under a new law.

The second report found several problems with documentation and compliance with regulations for Veterans Health Administration purchases through FedBid, and also questioned the validity of reverse auction savings. The OIG warned that claimed savings through reverse auctions were “not reliable.”

“We found that the reported claimed savings, computed by subtracting the final award price from the target price, was not reliable in determining the success of using reverse auctions for several reasons,” the OIG stated. The auditors judged that the basis for the target price was not always reliably determined, and the target price could be changed during an auction.

The inspector general also said the government runs the risk of acquiring “gray market” items through reverse auctions. “We found VHA was procuring items from unauthorized distributors through the use of reverse auctions,” the report stated.

FedBid was not immediately available for comment, but FedBid officials told FCW on Oct. 6 that “we continue to believe that FedBid has acted appropriately” and that they are evaluating all concerns.

More Information: VA OIG reports: http://www.va.gov/oig/pubs/VAOIG-13-03065-304.pdf and http://www.va.gov/oig/pubs/VAOIG-13-01408-294.pdf .

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