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VA Shuffles Money from Canceled Contracts While Keeping Congress Mostly in the Dark

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The Department of Veterans Affairs is starting to move money from canceled contracts to other accounts even as it has yet to fully disclose what contracts it has ended.

Late last month, the department sent Congress a notice informing lawmakers it would transfer more than $300 million from canceled contracts to accounts for the program that allows veterans to see non-VA doctors using VA funding, lawmakers and VA Secretary Doug Collins said at a hearing last week.

Separately, this past Friday, the department sent Congress a list of 447 contracts it says it has canceled, according to a copy of the list obtained by Military.com. But that list falls short of the 585 contracts that the department said it canceled in March, appears to vastly inflate the value of some of the contracts, and includes dozens of contracts canceled long before the Trump administration took office.

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The list sparked a fresh round of criticism from Democratic lawmakers accusing the VA of obfuscation and demanding that Collins provide a full, accurate accounting of cuts he’s made.

“More than two months later, Congress is still waiting for accurate and complete information on the contracts you have canceled, the contracts you have restored after being canceled, the process the department is using, and documentation for the savings generated and reinvested,” Sen. Richard Blumenthal, D-Conn., the ranking member of the Senate Veterans Affairs Committee; Rep. Mark Takano, D-Calif., the ranking member of the House Veterans Affairs Committee; and 12 other Democrats from both chambers wrote in a letter to Collins released Tuesday.

In February, the VA said it was cutting about $2 billion in contracts that weren’t needed and could be redirected to veterans’ health care and benefits.

But after news reports uncovered that many of the 875 contracts the VA planned to trim provided critical services, the department pulled back on some of those cuts.

Ultimately, in March, the VA announced it was ending 585 “non-mission-critical or duplicative contracts” worth about $1.8 billion. The announcement provided no details on what specific contracts were being canceled but vowed that the “termination of these contracts will not negatively affect veteran care, benefits or services.”

But a review of the list sent to Congress last week shows several contracts were related to efforts to improve veterans’ care.

For example, one canceled contract was for “Nursing Workforce Services and Project Management Support,” according to the list. A 2024 news release from the company that won the contract said it was for developing strategies to recruit and retain nurses, a job in which the VA faces a severe shortage.

The document sent by the VA to Congress also claims the contract was worth $661 million, despite a federal contracts database listing its value at up to $6.5 million.

Also cut was a contract titled “Women’s Health Program Management Services,” according to the list. That contract was meant to analyze how women use the VA in order to comply with a legal requirement to improve care for female veterans, according to a news release from the company that won the contract.

The VA document also inflates the value of that contract, listing it as worth about $4 billion compared to the $3 million the federal contracts database says it is worth.

Also on the chopping block were several contracts for patient satisfaction surveys at different VA facilities; a contract to test for legionella at a VA hospital; two contracts for neuroimaging for research on brain injuries; and a contract for a tumor registry service, according to the list.

Despite that, the VA continued to insist that services for veterans won’t suffer.

“VA does not cancel contracts unless they are no longer needed or the department has contingency plans in place to ensure continuity of services and no negative impacts to veterans or VA beneficiaries,” VA spokesperson Peter Kasperowicz said in an emailed statement to Military.com on Wednesday.

The list also includes four contracts that it says ended in 2021, four in 2022, 11 in 2023 and 61 in 2024 — years that the Biden administration was in office.

The total costs listed in the document add up to $120.8 billion, which would be more than one-quarter of the VA’s annual budget.

In one of the most stark examples of the list overvaluing contracts, one contract for “VA Program Management Support Services Contract” is listed as being worth $44.8 billion. In reality, according to the federal contracts database, it was worth about $85 million — a $44 billion mistake.

Asked about the inconsistencies in the list, the VA defended its contract cancellation process.

“VA’s decisions on whether to keep, cut or descope contracts are based on a deliberative, multi-level review that involves the career subject-matter expert employees responsible for the contracts as well as VA senior leaders and contracting officials,” Kasperowicz said in his statement. “As part of the process, VA career employees evaluate the contracts based on how closely they support veterans and VA beneficiaries. Contracts that directly support veterans and beneficiaries or provide services VA cannot do itself will not be canceled. Contracts that are wasteful, duplicative or involve services VA can perform itself will typically be canceled.”

He also said the list did not contain all 585 contracts announced in March because winding down contracts can sometimes take months and so “the number of fully terminated contracts lags behind termination decisions.”

Even as the scope of the contracts the VA is scuttling remains unclear, the department is already making plans to spend some of the money elsewhere.

On April 24, the department notified Congress it would transfer $343 million from canceled contracts to efforts to “support VA community care and to ensure veterans have health care choices promised under the bipartisan Mission Act,” Collins said at a hearing before the House Appropriations Committee’s VA subcommittee last week.

Community care is the program that allows veterans to see non-VA doctors using VA funding, and the Mission Act is a 2018 law that expanded community care.

The funding transfer will happen 30 days after the notification — or this coming Saturday — Collins added.

It’s unclear exactly which canceled contracts the $343 million comes from or which specific accounts the money is being transferred to. At the hearing, lawmakers suggested that information was not included in the notification.

Lawmakers in both parties also criticized Collins for failing to fulfill the VA’s legal obligations to request Congress approve a funding transfer.

“You are required to seek our approval,” Rep. Debbie Wasserman Schultz, D-Fla., the ranking member of the VA appropriations subcommittee, told Collins. “You were a member of Congress. You’re aware of that, and you have not done that. You still owe us answers on why you sent a notification instead of a reprogramming [request]. You didn’t send us a plan. We’re asking you for a plan. A two-page notification with one briefing does not give us any real information on what exactly you’ll be doing with these funds.”

Subcommittee Chairman John Carter, R-Texas, also chimed in that he agreed with Wasserman Schultz.

“We want it done the way she has just said,” Carter said. “I’ve been on this committee 20 years. It’s been done that way 20 years, and we’re not going to change it now.”

While less sharp in tone, House Appropriations Committee Chairman Tom Cole, R-Okla., similarly told Collins at the hearing that the notification “should have come in the form of a reprogramming request.”

Collins insisted to Wasserman Schultz that the notification fulfilled the VA’s legal obligations but promised Cole that the VA would work closely with the committee going forward.

Still, Collins did not directly answer Cole’s question asking for details on the canceled contracts.

“As I promised earlier,” Collins said, “we’ll continue, Mr. Chairman, to work with you on this request to make sure that you get the information you need.”

Related: VA Secretary Defends Staffing Cuts, Contract Cancellations in Heated Senate Hearing

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