VA blasted for problems plaguing $543M technology contract

3:01 p.m Friday, Dec. 29, 2017 Local
Marty Martinez, facilities engineering operations manager for St. David’s Medical Center, shows various electronic tracking devices used to monitor mobile medical equipment throughout the hospital. It serves as a security and preventive maintenance measure when dealing with valuable assets. It’s the type of equipment that the VA has been hoping to use after signing a $543 million contract with Hewlett Packard in 2012. RALPH BARRERA / AMERICAN-STATESMAN

Investigators with the Department of Veterans Affairs have concluded that a half-billion-dollar contract to bring cutting-edge tracking technology to VA hospitals has been plagued by poor oversight and security lapses and has an uncertain future even after VA officials dramatically pared down its scope.

The findings from the VA’s Office of Inspector General, released this month, confirm the conclusions of a June American-Statesman investigation, which revealed that, behind closed doors, VA’s Austin-based contracting officer worried that the equipment-tracking contract was headed for “catastrophic failure.”

In 2012, the VA awarded a $543 million contract to Hewlett-Packard Enterprise Services to implement a real-time locating system, or RTLS, at its facilities and pharmacies to track equipment. The system, to wirelessly track everything from catheters to hospital beds, was supposed make hospitals and clinics more efficient, save millions in lost or misplaced equipment and prevent death and disease from unsterilized equipment.

The contract originally called for the tracking system to be functional at VA facilities by June 2017. But the project’s implementation was dogged by technical problems, including a 2015 operational test in which VA officials said the system was only able to track equipment accurately in 40 percent of cases, according to information in thousands of pages of emails and reports obtained by the Statesman through a Freedom of Information Act request.

READ: VA’s foray into Internet of Things faced ‘catastrophic failure’

Meanwhile, Hewlett-Packard Enterprise, which has since become DXC Technology, blamed the problems on the VA’s inadequate wireless internet service.

The inspector general concluded the VA’s planning and policy management office “provided minimal oversight” and determined that an advisory council was “never successfully established to provide overall governance of the project.”

But perhaps most damning, investigators concluded that project officials failed to learn lessons from other large-scale technology contract efforts, even in the wake of high-profile technology fumbles. Around the time the contract was awarded, the VA was reeling from the failure of its nine-year, $127 million effort to modernize its outpatient scheduling software. In 2013, the VA and Defense Department abandoned their $564 million effort to merge medical records.

The VA is currently undertaking its most ambitious information technology project to date: replacing its decades-old VistA medical record system at an estimated cost of up to $16 billion.

Tracking system’s future unclear

Due to what investigators said was Hewlett-Packard’s “inability to implement a functional RTLS solution,” the VA and the company renegotiated the contract in September 2016, reducing the number of facilities that would receive the tracking technology.

According to the inspector general’s report, the number of facilities was cut almost in half, from 283 facilities before the renegotiation to 148. It’s unclear when or how other facilities would receive the tracking technology. VA officials said Friday that more than 60 RTLS applications have been implemented.

“VA will be completing RTLS deployments that are currently under contract, but will not expand RTLS until its benefits are fully demonstrated,” VA spokesman Terrence Hayes said.

According to VA records obtained by the Statesman, the Austin Outpatient Clinic is using an RTLS system to track sterilization of equipment.

VA investigators did not appear overly confident about the contract’s future, writing that “Given the uncertainty of the project, future RTLS cost estimates are unknown … (the VA) must also demonstrate that RTLS is a worthwhile investment, providing taxpayers with a good return on investment.”

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Should the contract fail, veterans and taxpayers would pay a heavy price in terms of money and, potentially, in lives. At a single VA medical center in Washington, D.C, investigators have found $154 million in supplies that weren’t being inventoried and shortages of basics such as alcohol pads and clip appliers to close blood vessels during surgeries.

And unsterilized colonoscopy equipment has led to a rash of hepatitis and HIV infections at veterans hospitals in Florida and Georgia.

The inspector general’s office recommended greater oversight and project management controls. While the Veterans Health Administration accepted the recommendations, it pushed back against findings that it had not provided proper oversight, insisting that it followed VA protocols.

The VA also told the Statesman it is assembling a council to help manage the project’s cost, scope and schedule.

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