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NSIAD-83-33 1 (1983-09-20)

handle is hein.gao/gaobabncw0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE ... WASHINGTON, D.C. Z0548 mUMAN OU- cu 0VISION B-21 1827 SEPTEMBER 20,1983 The Honorable Harry N. Walters 1 N 1 I Administrator of Veterans Affairs 122377 Dear Mr. Walters: Subject: Better Management and Price Negotiation Will Improve the Veterans Administration's Multiple Award Schedule Program (GAO/NSIAD-83-33) We reviewed the Veterans Administration's (VA's) procurement of drugs and pharmaceuticals, medical equipment, and subsistence products through the multiple award schedule (MAS) program. Under the MAS program, commercial vendors negotiate with VA for the opportunity to sell medical and related supplies to VA and other agencies at discounted prices that are equal to or less than those offered their most favored customers. After agreements are reach- ed on the supplies and discounted prices, medical units in VA and other agencies select required supplies from approved schedules and order directly from vendors. Over $497 million was expended under the MAS program during fiscal year 1982 and over 800 vendors had MAS contracts as of January 1983. The results of our review are summarized below and are discussed in detail in the enclosure. SUMMARY OF FINDINGS Our review disclosed that VA may not be obtaining the lowest prices possible under the MAS program because (1) prices offered by vendors are not fully analyzed, (2) inadequate and unreliable vendor-submitted data are used for negotiations, and (3) offers are frequently accepted without counteroffers or negotiations. Management of the MAS program is also hampered by the large volume of products and contracts. We believe program management can be improved by eliminating contracts with inadequate savings poten- tial and products with limited sales. In addition, identifying products which could be procured competitively will result in more favorable contract terms. We also found that the format of the drug and pharmaceutical schedules does not provide customers with enough information to make buying decisions. (942064) 0 , .) t,(ok I

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