Watchdog says VA violated Federal Acquisition Regulation with electronic health records contract payments

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The Department of Veterans Affairs did not comply with the Federal Acquisition Regulation in at least one instance when it paid Cerner for work carried out as part of its electronic health records modernization program, according to the agency’s inspector general.

In a report published Monday, the agency’s IG identified a task order for scheduling work undertaken that was paid without any verification of contract deliverables. Cerner and Booz Allen Hamilton are two of the key federal contractors carrying out work as part of the modernization program.

“The OIG reviewed all IMS-related invoices paid through August 30, 2021 and found that for one of the two task orders, OEHRM [Office of Electronic Health Record Modernization] did not take the necessary steps to allow ‘acceptance’ of multiple IMS deliverables (that is, review their compliance with contract requirements) until after the related invoices were paid – even though these deliverables were critical to monitoring program progress,” the watchdog said.

In one case the department paid an invoice 10 months before accepting the relevant deliverable, according to VA’s IG. In its report, the watchdog said the error occurred in part because the integrated master schedule deliverables were not separately priced, and VA did not provide staff with training on how to review and accept such deliverables.

Under the Federal Acquisition Regulation, agencies must accept the delivery of services or goods before making payments to contractors.

The findings are part of a wide-ranging investigation into the electronic health record’s integrated master schedule, which is used to set out the order of connected and detailed tasks and is especially crucial for the delivery of large, multi-billion dollar federal government contracts.

Among the watchdog’s conclusions are that VA did not have a high-quality, reliable master schedule and that it lacked clearly defined contract requirements. It said also that VA should improve stakeholder communication, ensure consistency between contract language and office plans and ensure that it complies with each aspect of the Federal Acquisition Regulation.

The investigation is one of a slew of recent reports looking at failures within the modernization project. Last month the VA’s Office of Inspector General last week published a trio of reports that identified major concerns about care coordinationticketing and medication management associated with the EHR program launch.

These came after it in February detailed the Department of Veterans Affairs‘ failure to ensure that data transferred during the rollout of its new electronic health record (EHR) modernization platform met clinicians’ needs.

The executive director of the EHRM Integration Office at the VA concurred with the watchdog’s six latest recommendations and provided responsive action plans. VA has target completion dates to implement recommendations from May through December.

At a subcommittee hearing later today, leaders of the VA and Cerner will answer questions from members of the House Committee on Veterans Affairs about the future of the IT modernization program.

Cerner declined to comment.

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Booz Allen Hamilton, Cerner, Department of Veterans Affairs (VA), EHRM, FAR, OIG
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