[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
VA LOGISTICS MODERNIZATION: EXAMINING THE RTLS AND CATAMARAN PROJECTS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
of the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
TUESDAY, MAY 8, 2018
__________
Serial No. 115-58
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
35-486 WASHINGTON : 2019
COMMITTEE ON VETERANS' AFFAIRS
DAVID P. ROE, Tennessee, Chairman
GUS M. BILIRAKIS, Florida, Vice- TIM WALZ, Minnesota, Ranking
Chairman Member
MIKE COFFMAN, Colorado MARK TAKANO, California
BRAD R. WENSTRUP, Ohio JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American ANN M. KUSTER, New Hampshire
Samoa BETO O'ROURKE, Texas
MIKE BOST, Illinois KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine J. LUIS CORREA, California
NEAL DUNN, Florida KILILI SABLAN, Northern Mariana
JODEY ARRINGTON, Texas Islands
JOHN RUTHERFORD, Florida CONOR LAMB, Pennsylvania
CLAY HIGGINS, Louisiana ELIZABETH ESTY, Connecticut
JACK BERGMAN, Michigan SCOTT PETERS, California
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto
Rico
Jon Towers, Staff Director
Ray Kelley, Democratic Staff Director
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
JACK BERGMAN, Michigan, Chairman
MIKE BOST, Illinois ANN MCLANE KUSTER, New Hampshire,
BRUCE POLIQUIN, Maine Ranking Member
NEAL DUNN, Florida KATHLEEN RICE, New York
JODEY ARRINGTON, Texas SCOTT PETERS, California
JENNIFER GONZALEZ-COLON, Puerto CONOR LAMB, Pennsylvania
Rico
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
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C O N T E N T S
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Tuesday, May 8, 2018
Page
VA Logistics Modernization: Examining The RTLS and Catamaran
Projects....................................................... 1
OPENING STATEMENTS
Honorable Jack Bergman, Chairman................................. 1
Honorable Kathleen Rice, Acting Ranking Member, U.S. House of
Representatives................................................ 3
WITNESSES
Ms. Tammy Czarnecki, Assistant Deputy Under Secretary for Health
for Administrative Operations, Veterans Health Administration,
U.S. Department of Veterans Affairs............................ 4
Prepared Statement........................................... 23
Accompanied by:
Mr. Alan Constantian, Deputy Chief Information Officer and
Account Manager for Health, Office of Information and
Technology, U.S. Department of Veterans Affairs
Mr. Nicholas Dahl, Deputy Assistant Inspector, General for Audits
and Evaluations, Office of Inspector General, U.S. Department
of Veterans Affairs............................................ 6
Prepared Statement........................................... 26
Accompanied by:
Mr. Michael Bowman, Director for Information Technology and
Security Audits Division, Office of Inspector General,
U.S. Department of Veterans Affairs
VA LOGISTICS MODERNIZATION: EXAMINING THE RTLS AND CATAMARAN PROJECTS
----------
Tuesday, May 8, 2018
U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Disability Assistance
and Memorial Affairs,
Washington, D.C.
The Subcommittee met, pursuant to notice, at 2:08 p.m., in
Room 334, Cannon House Office Building, Hon. Jack Bergman
[Chairman of the Subcommittee] presiding.
Present: Representatives Bergman, Poliquin, Dunn,
Arrington, Rice, Peters, and Lamb.
OPENING STATEMENT OF JACK BERGMAN, CHAIRMAN
Mr. Bergman. Good afternoon. This hearing will come to
order. Please have a seat.
I want to welcome everyone to today's hearing on VA's
efforts to modernize its medical supply chain.
Ordering, stocking, and locating medical equipment and
supplies are fundamental to VA's mission of providing medical
care to our veterans. Unfortunately, these logistics functions
seem to have degenerated in recent years. We read about them in
the press on a regular basis.
The Real-Time Location System, or RTLS, and Catamaran
point-of-use projects were conceived as technological leaps
forward, enabling VA medical centers to manage logistics more
efficiently. Catamaran was intended to replace the 25-year-old
Generic Inventory Package, or GIP, VA's primary inventory
system. Catamaran included modern point-of-use capabilities and
analytics tools. And a $55 million contract was awarded in
September 2013, with a potential value of $275 million.
Expectations were high, and VA began pilot implementations
in 22 facilities, including Pittsburgh and Washington, D.C.
Unfortunately, early results were overwhelmingly negative. In
Pittsburgh, users reported the software was plagued by login
failures, slow loading times, malfunctions, and problems
integrating with VistA. Catamaran was generally cumbersome and
inefficient, not any better than the existing inventory system.
In 2015, the Pittsburgh medical center decided to revert to
GIP. That eventually happened, after the VA central office
originally ordered Catamaran to remain in place but eventually
relented.
Meanwhile, in Washington, D.C., Catamaran was similarly
unsuccessful. The Office of Inspector General has demonstrated
that, unlike in Pittsburgh, the D.C. medical center's logistics
operation was already in disarray before Catamaran came along.
The staff had largely abandoned GIP and fallen into a pattern
of tracking inventory manually, in a disconnected fashion, in
various areas of the hospital.
It remains a matter of debate to what extent Catamaran was
ever used in D.C. up until VA halted the project and terminated
the contract in August of 2016. What is clear is Catamaran was
a harmful distraction. OIG has reported that logistics at the
D.C. medical center got worse due to a variety of factors in
2015 and 2016 during the Catamaran implementation that
occurred.
The Subcommittee has determined that logistics operations
are actually in worse shape today than they were before
Catamaran began. I hope to determine the reasons for this
today.
I will now turn to the Real-Time Location System, which is
still ongoing.
The RTLS project entails attaching radiofrequency
identification tags to a range of medical equipment, some
supplies, and surgical instruments in the catheterization lab
and the sterile processing department. With RTLS, VA aims to
count and track the physical locations of these assets in real-
time on one computer screen.
VA awarded the RTLS contract, which originally had a
potential value of $543 million, in June of 2012. After a
series of modifications, the contract is scheduled to end next
month.
An initial pilot in VISN 23, in the Northern Great Plains,
very quickly became an implementation throughout nearly the
whole country, before test results had ever come back from VISN
23. The test results in March 2015 were troubling. There were
over 200 defects, and the RTLS could only track equipment
accurately 40 percent of the time.
This led to conflict between VA and the contractor.
Specifically, VA threatened to terminate the contract if a
satisfactory corrective action plan was not produced. Over a
year later, in June 2016, there were still almost 50 defects.
The contractor blamed VA's inadequate WiFi, and VISN 23
withdrew from the project.
According to the OIG, there were also cybersecurity
deficiencies. The contractor connected RTLS to VA's network
before receiving authority to operate.
In September 2016, VA and the contractor signed a global
settlement agreement that remains sealed. I requested a copy on
April 12, and VA has so far declined to provide it. But what we
do know is that the contract was extended through June 2018,
its requirements were significantly reduced, and the contractor
was released from any liability for its performance up to that
point.
The facilities slated to receive the RTLS asset tracking
capability, its main component, were cut from 92 to 47. The
facilities scheduled to receive RTLS in the catheterization
labs and sterile processing departments were also pared down.
The temperature monitoring component of RTLS was almost
completely eliminated. Today, VA still has a significant amount
of work to do to meet even these reduced goals.
The question before us today is: What should be done with
the RTLS program, how much has been spent, and what has the VA
gotten for the money? The goalposts have been lowered, but can
they be met? And how much additional investment will that
require? The contract's expiration is only weeks away.
I now yield to Miss Rice, who has graciously agreed to fill
in for Ranking Member Kuster, for any opening statement or
remarks she may have.
OPENING STATEMENT OF KATHLEEN RICE, ACTING RANKING MEMBER
Miss Rice. Thank you, Mr. Chairman.
Good afternoon. And I want to thank the Chairman for
holding this important hearing. I also want to thank all of our
witnesses for coming here today.
I continue to be alarmed at the number of mismanaged and
failed information technology programs at VA. Attempts to
modernize VA's IT infrastructure always seem to hit
implementation roadblocks, cost overruns, and result in
products that are unusable for the frontline employees
entrusted with delivering health care and benefits to our
veterans. It is not surprising that IT is one of the five areas
of concern GAO identified when it decided to place the Veterans
Health Administration on its high-risk list.
In its testimony today, the Office of Inspector General yet
again finds that VA faces significant challenges in managing
its IT development projects. Whether it is VA's inability to
manage its medical supply inventory at the Washington, D.C., VA
Medical Center, too many false starts on an interoperable
electronic health record with DoD and now the delayed signing
of the contract with Cerner, or even delayed deployment of the
caregiver IT system, it seems VA witnesses frequently shift the
blame on the Office of Information and Technology during
oversight hearings when things go wrong.
As late as March of this year, the D.C. VAMC was still
delaying treatment for veterans due to medical supply
shortages. It has been over a year since Congresswoman Kuster
led Committee Members on an oversight visit to the D.C. VAMC
after the OIG reported that patients were being put at risk due
to care delays. This site visit revealed that supplies were not
being tracked by any inventory management system or any
automated system to process sterile supplies, not the GIP
system, nor the RTLS, the Real-Time Location Service, nor
Catamaran system. Due to failed management of RTLS and
Catamaran, the medical center did not know when it was running
low on some supplies and, in other cases, was ordering too many
supplies that remained unused.
It took extra dedication and commitment from clinical staff
to ensure no patients were harmed. However, veterans sometimes
had procedures delayed or canceled. This significantly
increased patients' risk of harm, in part due to a failed IT
project that made it difficult for the medical center to manage
its medical supply chain and ensure sterile equipment was
processed and available to providers when they needed it to
treat patients.
OIG found in its review of the RTLS project that, due to
inadequate project management, VA did not have assurance that
it received an effective return on the $451 million it invested
in RTLS or that Hewlett-Packard met the contract requirements
because the contract was mismanaged. This mismanagement caused
delays in veterans' care and wasted taxpayer dollars. It is
beyond unacceptable.
We are holding the hearing today to get the necessary facts
so we can be sure that VA is properly managing its medical
supply chain. We cannot have what happened at the D.C. VAMC
take place in other VA hospitals and clinics around the
country.
According to the OIG, VA needs enhanced discipline,
oversight, and resource management to support successful IT
development. I look forward to hearing from VA about how the
agency plans to enforce discipline, resource management, and
ensure proper oversight so we can get this project back on
track and prevent any future risk of harm for our veterans.
Thank you, Mr. Chairman. I yield back.
Mr. Bergman. Thank you, Miss Rice.
I now welcome the members of our first and only panel, who
are seated at the witness table.
With us today from VA, we have Ms. Tammy Czarnecki, the
Assistant Deputy Under Secretary for Health for Administrative
Operations in the Veterans Health Administration. She is
accompanied by Mr. Alan Constantian, the Deputy Chief
Information Officer and the Account Manager for Health in the
Office of Information and Technology.
Also on the panel we have Mr. Nicholas Dahl, Deputy
Assistant Inspector General for Audits and Evaluations,
representing the VA Office of Inspector General. He is
accompanied by Mr. Michael Bowman, the Director for the
Information Technology and Security Audits Division in the
Office of Inspector General.
I ask that the witnesses please stand and raise your right
hand.
Mr. Bergman. Let the record reflect that all witnesses have
answered in the affirmative.
Ms. Czarnecki, you are now recognized for 5 minutes.
STATEMENT OF TAMMY CZARNECKI
Ms. Czarnecki. Good afternoon, Chairman Bergman, Acting
Ranking Member Rice, and Members of the Subcommittee. I
appreciate the opportunity to discuss the Department of
Veterans Affairs' Real-Time Location System project and the
point-of-use program.
I am accompanied today by Dr. Alan Constantian, Deputy
Chief Information Officer, Office of Information and
Technology.
In 2011, VA chartered several major transformation
initiatives. Two of these initiatives included the RTLS project
and the point-of-use program.
The RTLS project was chartered to automate processes and
improve health care services that VA provides to veterans. In
June of 2012, VA awarded a contract to Hewlett-Packard
Enterprise Systems. The contract's scope encompassed design,
installation, testing, and maintenance of RTLS. Task orders
were to be issued against the contract, which had a ceiling of
$543 million.
The RTLS project is jointly managed by OI&T and VHA per a
memorandum of understanding signed in 2011 by the Under
Secretary for Health and the Chief Information Officer. The
RTLS solution utilizes COTS technology and software to directly
support patient care delivery and outcomes.
RTLS requires extensive infrastructure to be installed
throughout the hospital, with design and installation generally
taking 1 to 2 years. Fargo VAMC was the first site to complete
installation and test the system in March of 2015. VA
identified several issues, and the contractor was charged to
correct them.
In September of 2016, VA made a program decision to realign
the RTLS program and entered into negotiations, with the shared
goal to expedite the implementation of RTLS. To capture the
agreements made during these negotiations, VA modified the
existing RTLS contract and executed a global settlement
agreement, resulting in an implementation strategy to decouple
the applications, allowing each application to be tested and
deployed on their own schedule. Additionally, it was agreed
that the vendor would install additional technology to improve
the accuracy, and a new deployment schedule was issued through
2018.
The deployment of RTLS was accelerated, with many positive
outcomes, continuing through present. The sterile processing
solution has been successfully implemented at 60 facilities.
With over 1.4 million surgical and dental instruments being
tracked, VA can be assured instruments have been through the
required steps of the sterilization process and the right
instruments are being delivered to the right operating room for
the right procedure. Also, the cath lab solution has been
deployed at 28 facilities and is generating notable supply
savings.
VHA and OI&T have continued to align and improve project
management processes following the conclusion and the
publication of the OIG report. The RTLS deployment efforts have
been managed utilizing sound project management principles. VA
will perform continual risk assessments to assure that risks
associated with deploying RTLS on the VA network are minimized.
Moving to the point-of-use program, a point-of-use system
provides asset visibility down to the point at which the asset
is used. VA defines our point of use as our medical supply
rooms located throughout the medical center.
The point-of-use program was envisioned and intended to
provide an integrated supply chain solution capable of
providing consolidated data. The consolidated data would be
used to effectively manage consumable medical supply
inventories throughout the hospital.
Shipcom Wireless was awarded the point-of-use contract on
September 23rd of 2013. While the first and second options of
the contract were exercised, contract requirements were not
being met. The contract was not meeting operational or
contractual deliverables, and, after further review and based
on a new return-on-investment analysis, it was determined that
the point-of-use program would not see a break-even in the
investment for over a decade. These figures were deemed
unsustainable, and the decision was made not to exercise future
option periods of the contract.
A plan has been derived to transition the 22 sites that had
converted to Shipcom's Catamaran system, including the D.C. VA,
back to the VA's Generic Inventory Package. In January and
February of 2017, the point-of-use program team traveled to the
sites to educate the staff on a tour to transition the data.
RTLS has made significant improvements in the efficiency
and safety of health care for our veterans. It's critical that
we continue to move forward with the gains that we have made
thus far. Your continued support is essential to providing care
for veterans and families.
Mr. Chairman, this concludes my testimony. My colleagues
and I are prepared to answer any questions.
[The prepared statement of Tammy Czarnecki appears in the
Appendix]
Mr. Bergman. Thank you, Ms. Czarnecki.
Mr. Dahl, you are recognized for 5 minutes.
STATEMENT OF NICHOLAS DAHL
Mr. Dahl. Mr. Chairman, Congresswoman Rice, and Members of
the Subcommittee, thank you for the opportunity to appear
today.
The focus of my comments are the OIG's review of whether VA
effectively managed the RTLS project to meet cost and schedule
targets and performance and security needs.
OIG audits in recent years establish that IT systems
development at VA is a longstanding high-risk challenge, with
projects susceptible to cost overruns, schedule slippages, and
performance problems.
In June 2012, VA awarded a contract with a $543 million
ceiling to Hewlett-Packard Enterprise Services to deploy RTLS
nationwide over the course of 5 years. The RTLS procurement and
implementation process was a cooperative effort between VHA,
the Office of Acquisitions and Logistics, and the Office of
Information and Technology.
VA was required by policy to manage the RTLS project under
VA's Project Management Accountability System, which was a
project management system intended to establish a discipline to
ensure that an IT project's customer, project team, vendors,
and stakeholders would focus on a single compelling mission--
that is, achieving on-time project delivery. PMAS used
incremental product build techniques, with delivery of new
functionality tested and accepted by the customer in cycles of
6 months or less.
We received a complaint alleging VA management failed to
comply with VA policy and guidance when it deployed RTLS assets
without appropriate project oversight and that RTLS assets were
deployed without meeting VA information security requirements.
We reported management failed to comply with VA policy and
guidance when it deployed RTLS assets without appropriate
project oversight. Specifically, the RTLS Project Management
Office, or PMO, did not follow guidance from the Technical
Acquisition Center to use an incremental project management
approach during the acquisition and deployment of RTLS assets
to compensate for known project management risks. Also, the
RTLS PMO did not comply with VA policy requiring the use of
PMAS for all acquisitions and delivery of RTLS assets.
Despite the guidance from the Technical Acquisition Center
and VA policy, the RTLS PMO did not ensure the vendor could
meet contracted functionality requirements, such as accurate
asset tracking, on the initial $7.5 million task order before
ultimately committing a total of $431 million to the same
vendor for further RTLS deployments.
VHA had awarded the initial task order to deploy RTLS in
VISN 23 with an expected delivery date in December of 2013.
However, initial operational testing in March 2015 identified
245 functionality defects that resulted in the issuance of a
contract cure notice to the vendor.
In June 2016, the cure notice was still unresolved, as
significant defects, including the inability of RTLS to meet
contract requirements for asset tracking, remained outstanding.
In September 2016, VHA renegotiated the RTLS contract due
to the vendor's inability to implement a functional RTLS
solution. The renegotiation was intended to expedite the
implementation of RTLS in each VISN. VA executed a global
settlement agreement that resulted in extensive changes to the
vendor's contract requirements, to include expiration of task
orders, reduction in the scope of RTLS applications deployed,
extension of the contract period of performance, and commitment
of $431 million to the vendor as of December 2016. According to
the agreement, VA also released the contractor from any
liability claims related to prior performance on the contract.
We also substantiated the allegation that VA deployed RTLS
assets without meeting VA's information security requirements.
We reported inadequate oversight of RTLS risk management
activities left VA mission-critical systems and data
susceptible to unauthorized access, loss, or disclosure.
Consequently, VA's internal network faced unnecessary risks
resulting from untested RTLS system security controls.
We reported VA must exercise cost control, sound financial
stewardship, and discipline in RTLS development. As a result of
inadequate project management, VA lacked assurance of an
effective return on the $431 million invested in RTLS. We
provided recommendations for improving controls over the VA's
oversight of system development projects, and VHA and OI&T
concurred with our recommendations.
Our review of the RTLS project demonstrates VA continues to
face challenges in managing its IT development projects. VA has
taken some actions to address issues we identified in our RTLS
report and in other recent reports. However, it remains to be
seen whether the actions will effectively improve VA's ability
to meet cost, schedule, performance, and security goals when
managing mission-critical system initiatives.
Mr. Chairman, this concludes my statement. We would be
happy to answer any questions you or other Members of the
Subcommittee may have.
[The prepared statement of Nicholas Dahl appears in the
Appendix]
Mr. Bergman. Thank you, Mr. Dahl.
The written statements of those who have just provided oral
testimony will be entered into the hearing record.
We will now proceed to questioning. We'll begin--Miss Rice,
you're recognized for 5 minutes.
Miss Rice. Thank you, Mr. Chairman.
So who--I'm just trying--I can't read any names. Mr. Dahl,
so this is what I want to ask you about. The contract cure
notice the VA had issued to Hewlett-Packard in 2015 was still
unsolved by June of 2016, including RTLS's inability to meet
fundamental contract requirements for asset tracking and
software functionality.
Instead of terminating the contract, it was renegotiated.
HP's responsibilities were reduced by nearly 50 percent, and
the vendor was released from any liability claims related to
prior performance of the contract.
Can you explain why the VA decided to renegotiate the
contract with HP?
Mr. Dahl. Well, I think VA may be better suited to answer
that question.
Miss Rice. The VA? Oh, yeah, you're the--all right. I'm
sorry. Yeah.
Mr. Dahl. I would speculate the VA management was concerned
that the contractor was behind schedule and there were concerns
as to whether they would be able to deliver this system on time
and within costs.
Miss Rice. Ms. Czarnecki, maybe you could--
Ms. Czarnecki. Yes. So there was a number of items that
were--remember, the RTLS was new in the medical space at that
time. So there were a number of items that were in the contract
that there were differences of opinion between the contractor
and VHA--for example, location accuracy.
As Mr. Dahl stated, initially there was only a 40-percent
location accuracy. So in the contract we had placed that we
needed to have location accuracy for asset tracking. Their
definition of location accuracy and our definition was
different. We needed clinical accuracy. We needed to know that
piece of equipment was in that particular room so that we could
go to that room, get that piece of equipment, and move it.
So there were a number of clarifications. So the contractor
wasn't necessarily wrong; there were definition differences
between the contractor and VHA in a number of the areas. And so
those needed to be clarified, and that was part of the change.
The second piece of it is, initially, VHA went into the
contract saying that if you were getting asset tracking, cath
lab, and SPS, you had to have all of those installed and tested
at the same time. Part of the settlement agreement is that we
decoupled those so that each one of those applications were
independent and could be tested and deployed.
Miss Rice. So can you pinpoint how this mismanagement
occurred and how the VA is going to ensure that this doesn't
happen again?
What I fail to see in all of these hearings that we have is
any level of accountability. I mean, you're talking about a
half a billion dollars being spent on a system that was totally
mismanaged. It doesn't seem like there was a proper protocol
for how it was going to be implemented.
I just don't understand--the process, maybe, is what I
don't understand. Do you learn from these instances of
mismanagement, and who is accountable?
Ms. Czarnecki. So, in this case, it takes 1 to 2 years to
deploy the infrastructure. And, as I stated, in this particular
case, they were getting two applications, both asset tracking
as well as sterile processing. And so, when it went into
testing, that was when we identified errors--not errors, but
deficiencies, things that were not working the way we
anticipated that they would work.
And so, yes, we have learned from those. We issued a cure
notice. We didn't do any further deployments until after the
global settlement agreement. We continued the infrastructure
work, but we didn't test or deploy anything further until we
were sure that the contractor was able to meet the
deliverables.
Miss Rice. So the accountability?
Ms. Czarnecki. I believe that there is accountability
throughout the entire process. There was a senior-level project
manager, both from IT as well as VHA, that worked with the
contracting--or with the vendor. And I believe we held the
vendor accountable as well as our own staff.
Miss Rice. How did you hold the staff accountable?
Ms. Czarnecki. With the staff being held accountable, the
staff were required to work through the process with the
vendor. There was a list of items that needed to be negotiated,
definitions to be clarified, and so I believe that we worked
through those issues.
I don't believe that there was any intention not to have a
working, functional RTLS system, but this was new in the
medical space at that time. It was the largest deployment of a
real-time tracking system in health care. It was a definition
problem. And we have run into this before, where clinical
people do not necessarily speak the same language as the
business community. And those ended up not being performance
issues but, rather, clarification of requirements.
There needed to be very clear definitions of what each and
every requirement was. And I think that we have learned that,
as well, going forward, as we talk about what does, and I'll
use, ``accuracy'' mean. There is a very big difference between
what I think clinical accuracy is as a nurse and what the
vendor thought accuracy was. The accuracy for them was ``it's
in the director's suite.'' The accuracy for me, ``it's in the
director's suite, it's in the director's office''--
Mr. Bergman. We have to move on. The gentlelady's time has
expired.
Miss Rice. Thank you, Mr. Chairman.
Mr. Bergman. Okay.
Dr. Dunn, you are recognized for 5 minutes.
Mr. Dunn. Thank you very much, Mr. Chairman.
And welcome, to the panel. I'm going to ask everybody to
try to keep their answers concise, because, as you can see,
we're on the clock. So let me start with Ms. Czarnecki.
In your testimony, you described site assessments that were
conducted to determine where to implement or where to pilot
Catamaran. How were those sites chosen? And, in retrospect,
were the chosen sites good choices?
Ms. Czarnecki. I don't know how the sites were selected.
Mr. Dunn. Okay. So, in retrospect, would you say that we
made good choices in site selection?
Ms. Czarnecki. I do believe we made good choices in site
selections. We chose a mix of both small and large facilities.
Mr. Dunn. Okay.
So, now we know that the D.C. medical center actually had a
lot of problems ahead of time. Logistically, they were
struggling. Did the people managing these choices know that the
D.C. medical center had trouble with logistics?
Ms. Czarnecki. I do believe they knew that there were
trouble with logistics. They thought the Catamaran system would
actually help that.
Mr. Dunn. So they thought that was the solution. All right.
So let's turn to the RTLS. Again, Ms. Czarnecki, you
represent health, and, Mr. Constantian, you represent IT, I
believe, right? All right. So this is a question for both of
you. Who should have been in charge of the RTLS implementation
from each of your organizations, and who actually was in
charge?
Ms. Czarnecki. I'll start with that one.
This was a--RTLS is like a medical device, like an
anesthesia monitor--
Mr. Dunn. I know what it is.
Ms. Czarnecki [continued].--or a medical screen in a
colonoscopy suite. So it was a mix of VHA and OI&T. So there
were components--there were 22 task orders--
Mr. Dunn. The question was who was supposed to be in
charge, not what is RTLS.
Ms. Czarnecki. It's comanaged.
Mr. Dunn. So it's at, what, 50/50? Is there--did you have
the right people from your department, Mr. Constantian, in
charge, and did you, Ms. Czarnecki?
Ms. Czarnecki. Yes. I had a senior-level project manager
who was certified in project management principles.
Mr. Dunn. And the same guy actually did it? So it wasn't
one person said--okay.
And the same for you?
Mr. Constantian. Sir, we had a senior lead for this
implementation. There was a departure. We filled the position
later. There was a gap, but now we have a senior lead again in
OI&T.
Mr. Dunn. Mr. Dahl, what would a well-run project look like
in the VA or in the civilian world with this kind of
implementation?
Mr. Dahl. I would say as we've learned, that this was new
in the medical space, the RTLS, I think that following an
incremental approach from the start may have been more prudent,
in that they probably should have made sure that the things
that needed to be functional were functional before deploying
elsewhere.
Mr. Dunn. We've heard testimony that this is some novel
technology in the health care space. I'm a physician. I've
worked in a lot of hospitals, in and out of the military. This
is not that novel. I mean, we track millions of pieces of
equipment through multiple hospital systems. Some of them are
State, some of them are--many of them are private, you know,
HCA-type hospitals.
This is not rocket science, and it's not something that
hasn't been done. It is mature technology that's used
throughout the business world. Walmart does it, Target does it,
PetSmart does it. Why can't the VA do it?
Maybe that's a question for Mr. Dahl. You're the one who
inspects people, or--go ahead.
Mr. Bowman. I do think VA has the capability of managing
these kind of projects. They just chose a big-bang approach as
opposed to an agile, incremental approach. If you break the
project up in smaller pieces and get the end-user involved
early on, you discover early on whether or not your contract
requirements are being met.
Mr. Dunn. We've actually had this problem with the EMR, as
well, right? I mean, this is the same sort of failure to
implement?
Mr. Bowman. This is a theme that has showed up in various
IT development projects over the years.
Mr. Dunn. It has. And, obviously, it's a disappointment to
see that we can throw away so many billions of dollars and
actually tread water, not making any headway on that.
My time is about to expire, so I will yield. But let the
record reflect that it is disappointing that we can't implement
mature technology in an agency that is so very well-resourced.
Mr. Chairman, I yield back.
Mr. Bergman. Thank you.
And, Mr. Lamb, you're recognized for 5 minutes.
Mr. Lamb. Thank you, Mr. Chairman.
Ms. Czarnecki, I have a question about the policies in
place, if any, to identify potential conflicts of interest.
In Pittsburgh, there was a former VA regional director who
was identified by our local paper as having an advising role to
Shipcom, which was one of the contractors that the VA hired to
do the tracking in the Catamaran system.
Can you tell me about any policies that would have caught
that on the front end or that prevented it? Or if they don't
exist, is that ever discussed?
Ms. Czarnecki. I'll need to take that one for the record.
I'm not sure. I'm not sure if general counsel reviewed that or
not.
Mr. Lamb. Okay. Are you aware of the incident that I'm
talking about, where the former regional director was--
Ms. Czarnecki. Yes, I am.
Mr. Lamb. Okay.
Now, I think in the gentleman's previous question we were
just starting to get into the issue of coordination and project
implementation between the VHA headquarters and regional VA
systems. So I'm not sure which of the witnesses is best to
answer this, but could somebody talk about, going forward,
what's the best way to allow the regional VA systems to have
input into a policy or system change like this from the
beginning so that they can actually implement it more
successfully than was done here?
Ms. Czarnecki. So the regions are called our VISNs. And our
medical centers did, in fact, have input into the RTLS project
as well as Catamaran. They're involved from a project
management standpoint, a contracting officer representative is
part. And then the staff do get to give us feedback and input.
It's just like trialing any other product, where you would have
your staff providing ongoing feedback.
Mr. Lamb. Well, Mr. Bowman, from what you were saying, this
wasn't done in an incremental manner. Is that right?
Mr. Bowman. That's correct.
Mr. Lamb. Would you say that there is an opportunity to do
that differently in the future by trying this maybe in one
region and not others or trying--I mean, can you kind of
address that issue?
Mr. Bowman. So we recently received a corrective action
plan in response to our report from VHA and OI&T. And they laid
out a case where they're using incremental methodologies to
change the way they're deploying RTLS, which is breaking up the
application into discrete functionality. That way, they're not
having to have so many interdependencies that they have to
resolve.
So that would be a case where they're changing their
approach. And so far, from what I hear, they're achieving
success doing it that way.
Mr. Lamb. Okay. Thank you.
Mr. Chairman, I yield the remainder of my time.
Mr. Bergman. Thank you.
Mr. Arrington, you're recognized for 5 minutes.
Mr. Arrington. Thank you, Mr. Chairman.
I want to first of all congratulate my colleague Mr. Lamb
on his election victory, and I look forward to getting to know
you better. And we're glad you're on our Committee, and honored
to serve with you. So congratulations to you and your family.
There is not a more perennial issue of disappointment to me
in the lack of management of the big beast, bureaucratic beast
of the VA than IT systems. I mean, I have heard this is the--I
don't know how many stanzas of the same song, but it's getting
really old.
So I'm going to ask the same questions I ask at, it seems
like, every one of these meetings where we can't get IT systems
right. But let's start by just answering this in a very simple
way, in a very quick way.
Ms. Czarnecki, what are we trying to achieve with RTLS?
What happens to our customer if RTLS or these logistics
management systems aren't in place? If they're not in place or
they're not working, what happens to our customer, the veteran?
Ms. Czarnecki. For RTLS--and I'll use sterile processing as
the example. Every single instrument is tracked to make sure
that it is reprocessed appropriately. The trays are built,
delivered to the right operating room for the right patient.
Mr. Arrington. So, potentially, if we don't get this right,
they're not getting the right device or therapy to the right
patient? It's that serious? I mean, that sounds like life or
death. That's a public safety issue. Am I overstating it?
Ms. Czarnecki. Potentially, we couldn't miss a step in the
reprocessing of sterilization--
Mr. Arrington. So, I mean, we could have unsterilized
equipment? I mean, this is serious.
And we have--our veteran patients who are coming in, where
do they go if they feel like this thing is just all jacked up
and you just can't get it right, they don't have any confidence
you can get it right? Where do they go? Where can they go so
they can have peace of mind that a health care provider is
actually going to take care of them and manage all these things
so they get the right therapy, the right device, it's sterile,
and it's well-suited to put them on the path of healing? Where
do they go if you guys can't get it right?
Ms. Czarnecki. I hate to say this, but it could happen in
any health care--
Mr. Arrington. I know it could happen anywhere, but where
would they go if they couldn't get it at the VHA? Can they
access other hospitals? I mean, who's competing for their
business?
Here's my point: Too many veterans are trapped in this
system, and it's failing them.
Who has been fired on account of losing hundreds of
millions of dollars? Because that's what I'm hearing. We've
lost hundreds of millions of dollars. Now I'm going to talk
about the shareholder. We're fiduciaries for the taxpayers. Who
has been fired on account of hundreds of millions of dollars?
Because I can tell you, outside of the fantasy world of the VA,
people would lose their jobs over that.
How many people have been fired in the mismanagement of the
Catamaran and the RTLS?
Ms. Czarnecki. I really don't have that information.
Mr. Arrington. I can tell you. Nobody has been fired.
But I'll ask Mr. Dahl. Maybe he knows.
How many people were fired over this?
Mr. Dahl. I'm not aware of anyone.
Mr. Arrington. Nobody gets fired. I've asked that question,
colleagues have asked that question almost at every hearing,
and they don't know. And then I ask them to submit it for the
record. I've never received anything, so I assume that you
never submitted it.
There is no accountability. So this is--I almost feel like
I'm wasting my time at these hearings.
You say that these are jointly managed between the OI&T and
the VHA. So, you know, the old saying, if multiple people are
accountable, nobody is accountable.
Who is ultimately accountable for information technology
systems, the enterprise architecture? Who's ultimately
responsible at the VA for all of this?
Mr. Constantian. Sir, enterprise architecture is the
responsibility of the Office of Information and Technology.
Mr. Arrington. And who is the head of that office?
Mr. Constantian. The Chief Information Officer.
Mr. Arrington. And where is he or she?
Mr. Constantian. At the VA central office.
Mr. Arrington. How long have they been in that office?
Mr. Constantian. Mr. Sandoval was appointed Acting in that
role 2, maybe 3 weeks ago.
Mr. Arrington. Two or 3 weeks ago. I think there is a
really issue with continuity over there, but there's certainly
an issue of accountability.
I know I've gone over my time. I'm not even close to
finishing, so I hope we get more opportunities. I yield back,
Mr. Chairman.
Mr. Bergman. Thank you.
Mr. Peters, you're recognized for 5 minutes.
Mr. Peters. Thank you, Mr. Chairman.
I mean, I share Mr. Arrington's frustration. I will say
that we voted for the Accountability Act here in order to give
more flexibility for hiring and firing. And I did that in good
faith. And what I saw was that the people who have been fired
are cooks and gardeners. And those people didn't cost anything
close to millions of dollars. And I think that I feel a little
bit taken advantage of, because that was not the intent of the
vote that I took. The intent was to get to things like this.
And I will just say, too, you know, when you were
testifying about the mismatch between what doctors say and what
IT people say, that's not the first time we've heard this. And
I was trying to remember what it was. It was the Medical/
Surgical Prime Vendor Program too.
And I would maybe direct this to Mr. Dahl. What is the
appropriate response for the Department to take, so that when
we do these--these are novel contracts, but, you know, you can
lose $5 million before you lose $500 million. What should they
be doing up front to make sure that these people are speaking
the same language and, if they're not, that we catch it early
and we don't spend so much money, waste so much money down the
line that we're having a hearing like this?
Mr. Dahl. In this case, the approach was they awarded that
initial task order where they were going to deploy this in a
VISN. It was a $7.5 million task order. So, in theory--
Mr. Peters. Right.
Mr. Dahl [continued].--that would seem like a reasonable
approach.
But that was due--they awarded that task order in 2012. It
was due to be completed in late 2013. They didn't get to
operational testing on that until March of 2015, so they had
already slipped about 15 months. That's when they identified
some deficiencies. But, in the meantime, they had been awarding
additional task orders before they knew that it was functional
in that VISN.
I assume that there was a desire to get this RTLS up and
running across the enterprise, but, with this unproven
technology, we really believe that they should've been taking a
more incremental approach.
Mr. Peters. This is gasoline on the fire. I mean, we would
all be upset if they lost $7.5 million, right? But before
figuring out whether this would work, before figuring out
whether the doctors and the IT people were speaking the same
language, we went and deployed the same thing over and over
again, even though it was behind schedule. That's what
happened, right?
So, you know, I'm at a little bit of a loss, what to do
now. I mean, we're going to be under the gun on the budgets.
Now the Congress is talking about spending a trillion dollars a
year in deficits in good times. And we can't have this kind of
money wasted. We got nothing for this.
And I know we're still paying for this, right? Is that
right, Mr. Dahl?
Mr. Dahl. Yes.
As Mr. Bowman noted, we did recently get an action plan
from VHA and OI&T in response to our recommendations. They're
portraying to us that they have gone to a more incremental
approach and they are making progress. Of course, we haven't
done any follow-up on that yet to validate or verify that.
Mr. Peters. We also--we probably can't blackball this
contractor either, I don't suppose, can we, because of the
process concerns about that, right?
Mr. Dahl. I would have to defer to probably the Office of
Acquisition and Logistics on that, whether there's grounds for
that.
Mr. Peters. Well, $500 million, $420 million, whatever it
is, I guess--I don't--I think we're being taken advantage of. I
think taxpayers are being taken advantage of. I'm a big fan of
the VA. I would not describe VA as a failure. I think it gets
overstated sometimes. But this is really outrageous.
And I just think the fact that I've heard this same song
about the doctors not being able to speak the same language as
the IT people--one, I have heard of that in other contexts.
That's a management issue. That's a cultural issue that you've
recognized you've got to get a hold of; you can't do this
again.
And the fact that we spent $7 million to figure out if it
worked, and no one could wait to figure out if it was working?
You know, it's just shameful to spend that kind of money,
especially when we all know it's novel. So please don't come
back to me again with this kind of stuff.
And as to the Accountability Act, I would say, you know,
this is exactly what this is meant for, not for cooks and
gardeners. It's outrageous that my vote was taken advantage of
in that way, because it's the middle management that's the
problem in the VA, to the extent there's a problem in the VA,
and it's not being dealt with.
I yield back.
Mr. Bergman. Thank you.
Mr. Poliquin, you're recognized for 5 minutes.
Mr. Poliquin. Thank you.
This nice staffer right in front of me, could you get back
a little bit so I can make sure I can see everybody at the
table? Thank you very much.
Mr. Dahl, make sure I get this straight. Make sure I
understand this. You're in the IG's office, right?
Mr. Dahl. Yes, sir.
Mr. Poliquin. Okay. So you've got the VA that's trying to
figure out how to control and keep track of their inventory,
right?
Okay. So, roughly around 2012, they implement or they
started to implement a Catamaran system, right? It's one of
these systems. Right? And then within a year they implement a
second system called RTLS. Is that correct, roughly?
Mr. Dahl. I think it's the other way around.
Mr. Poliquin. Okay. Okay. But you see my point? Okay.
And, first of all, Ms. Czarnecki, why would you implement
two programs or two systems, start them at effectively the same
time? Why? Tell me.
Ms. Czarnecki. This was during a time where we were trying
to transform, and we had what we called T21 initiatives. And
these were two different initiatives. One was for the supply
chain. The other was sterile processing, cath lab, asset
tracking--
Mr. Poliquin. Could you have combined them together? In
hindsight, could you have done that?
Ms. Czarnecki. I'm not sure the technology would've been
able to combine those.
Mr. Poliquin. Who made that decision to have two programs
going forward?
Ms. Czarnecki. I believe that was made at a leadership
level.
Mr. Poliquin. Okay.
Ms. Czarnecki. These were all projects that were--
Mr. Poliquin. You've got to make sure that we get this from
your office, who that person was. I want to know if that person
is still at the VA, and, if so, I want to speak to that person.
Okay. Let's go down the path here a little bit more. This
has been discussed a moment ago. I think, Mr. Dahl, you've
mentioned it. I think Mr. Peters did too.
To start this thing off, you spent about $7.5 million of
taxpayer money to see if this thing would work. And then,
within a short period of time, you found out it wouldn't. But
then you expanded it anyway to 19 different sites, right? You
spent about 430 million bucks to do that, and the thing was a
complete failure, right?
Okay. Who made that decision?
Ms. Czarnecki. I believe that the Deputy Under Secretary
for Health made the decision to go ahead.
Mr. Poliquin. Okay. Who's that person?
Ms. Czarnecki. That person would have been Bill Schoenhard.
Mr. Poliquin. Okay.
Dennis, I want to make sure that we know this fellow, and I
want to get him on the phone if he's still at the VA. Okay?
Is that person still at the VA?
Ms. Czarnecki. No, sir.
Mr. Poliquin. Okay. Where is that person?
Ms. Czarnecki. That person's retired.
Mr. Poliquin. Okay. How about the other person I mentioned?
Is that person at the VA? The first person we mentioned, was
that person at the VA?
Ms. Czarnecki. No, that person is not at the VA.
Mr. Poliquin. Retired also?
Ms. Czarnecki. I believe deceased.
Mr. Poliquin. Okay.
All right. Let me ask you this: When this mess that has
happened over the past 5 or 10 years, which has cost about, I
think Mr. Peters said, about 400 million bucks, roughly--okay?
There is a settlement agreement with the RTLS contractor,
correct? Who negotiated that settlement agreement?
Ms. Czarnecki. That was negotiated between Dr. Stone and
Hewlett-Packard and--
Mr. Poliquin. Who is Dr. Stone?
Ms. Czarnecki. Dr. Stone, at that time, was the Principal
Deputy Under Secretary.
Mr. Poliquin. Okay. Is he still with the VA?
Ms. Czarnecki. No, he's not.
Mr. Poliquin. Where is he?
Ms. Czarnecki. He left the VA about a year and a half ago.
Mr. Poliquin. Where is he now?
Ms. Czarnecki. I don't know.
Mr. Poliquin. Okay. You're going to find out. Dennis will
find out. Okay.
Mr. Dahl, have you taken a look at this agreement with the
contractor?
Mr. Dahl. No, I don't believe--like the Chairman said, I
don't believe that we've seen the entire agreement. I think we
may have seen pieces of it, but VA has not shared that
agreement.
Mr. Poliquin. Why not?
Okay. Jack, we have subpoena power here, don't we, Mr.
Chairman?
Do you need help getting that contract settlement
agreement? Do you have subpoena power?
Mr. Dahl. We have subpoena power.
Mr. Poliquin. So what's the problem?
Mr. Dahl. We reported on the result of that global
settlement agreement, how it led to decrease in the scope of
the project, and that was what we reported.
Mr. Poliquin. Okay. So let me get this straight. So the
vendor who screwed this whole thing up and the folks within the
VA that allowed this to happened, hired the vendor in the
beginning, now you're going through a settlement agreement
after we've lost 400 million bucks, and you can't get the
complete terms of the settlement agreement. Is that right? So
we don't know if the folks that screwed this up have been given
more time and less liability, correct?
Mr. Dahl. Our understanding is they have been relieved of
liability for any issues that happened before the settlement.
Mr. Poliquin. Okay. So let me get this straight. So they've
lost $400 million of taxpayer money, which has put some of our
veterans at risk from a health standpoint, and we've relieved
them of liability going forward, or liability that they
could've incurred going backwards?
Mr. Dahl. It may not be an accurate statement to say--
Mr. Poliquin. But we don't know, because we don't have the
contract settlement agreement, right?
Mr. Dahl. No. What I'm saying is I'm not sure it's an
accurate statement to say that we lost the entire $430 million.
I think VA has gained some value from this system. It's just
hard for us to assess--
Mr. Poliquin. How much? How much?
Mr. Dahl. I couldn't answer that question.
Mr. Poliquin. Okay. But we need that settlement agreement,
don't we?
Mr. Dahl. You may find it interesting.
Mr. Poliquin. Good. Who do we get it from?
Mr. Dahl. Acquisition and Logistics.
Mr. Poliquin. Ms. Czarnecki, do you have that contract
settlement agreement?
Ms. Czarnecki. We'll get you a copy.
Mr. Poliquin. Do you have the contract settlement
agreement?
Ms. Czarnecki. Do I have the contract?
Mr. Poliquin. Who signed the contract settlement agreement?
Did you sign the contract?
Ms. Czarnecki. No, I did not.
Mr. Poliquin. Who signed the contract?
Ms. Czarnecki. Dr. Stone.
Mr. Poliquin. Who's no longer with the VA. Okay. But we
have a copy of the contract somewhere? You've got it somewhere?
Ms. Czarnecki. Yes. Somewhere we have a copy of the
contract.
Mr. Poliquin. Okay. Good. We're going to make sure Dennis
gets the contract, and we're going to make sure Mr. Dahl gets
the contract.
Is there any reason why we can't get that contract, Mr.
Dahl?
Mr. Dahl. I missed that, sir.
Mr. Poliquin. Any reason why we can't ask for it? Am I not
supposed to ask for the contract and settlement agreement?
Mr. Dahl. No. I would think it would be well within your
rights to ask for it.
Mr. Poliquin. Okay. Have you asked for the contract?
Mr. Dahl. Did we ask for it?
Mr. Poliquin. Did you ask for it?
Mr. Bowman. Yes, we did.
Mr. Poliquin. And who said no?
Mr. Bowman.--we did ask to--
Mr. Poliquin. And who said no?
Mr. Bowman [continued].--go over the settlement agreement--
Mr. Poliquin. And who said no?
Mr. Bowman. I believe that we got a majority of it. Not
sure if we got the complete settlement agreement.
Mr. Poliquin. Who said no? Who decided to withhold how much
of that contract settlement agreement? Who was it?
Mr. Bowman. Could we take that for the record, please? And
we can give you a more accurate response.
Mr. Poliquin. This is unbelievable. I'm not even sure I
want to yield back my time; I'm having fun doing this. What a
mess.
Anybody embarrassed here?
We've got 7 million veterans we're trying to take care of.
We've got a budget that's gone up from, I don't know, from $90
billion to $187 billion over 8 years. We can't keep track of
stethoscopes and tongue depressors?
We're losing our pants on deals, and after the deal, after
we find out we've lost it all, we relieve them of
responsibility. This is unbelievable.
I yield back my time, but before I do, I want to make it
short and clear: We want that contract settlement agreement.
Thank you.
Mr. Bergman. Thank you.
In case you haven't figured out--have any of you testified
in the last 18 months before this panel before?
Ms. Czarnecki. No, sir.
Mr. Constantian. Yes, sir, I have.
Mr. Bergman. You know probably what I'm about to say,
because you've heard it before, the lack of a sense of urgency
in all accounts. And the point is we are living one more
example here, that the need for the sense of urgency on the
part of everyone within the VA, because when the men and women
who serve our country in uniform--they have a sense of urgency
in what they do, and shame on anyone, especially in the VA or
on this Committee, who doesn't have that same sense of urgency
when it comes to meeting those veterans' needs and getting it
done right.
I'll claim my time here for my 5 minutes.
Ms. Czarnecki, I'd like to start with the money question.
How much was spent on the Catamaran point-of-use project up
until its termination? And how much has been spent on RTLS to
date? What is the total?
Ms. Czarnecki. So Catamaran is still going through an
equitable adjustment, but so far, $117 million. And for RTLS,
we have obligated $360 million.
Mr. Bergman. Okay. So you said $117 million or $171
million?
Ms. Czarnecki. I believe we have so far paid out $117
million.
Mr. Bergman. Okay. Now, we know how much we've paid out.
How much additional funding is going to be necessary to finish
RTLS?
Ms. Czarnecki. My understanding is that we are ending this
contract, so it will be roughly around $360 million.
Mr. Bergman. So another $360 million?
Ms. Czarnecki. No, no, total. We've already obligated the
$360 million. We are finishing the work on this contract.
Mr. Bergman. So no more money. We're just terminating,
finishing the contract?
Ms. Czarnecki. Right. That's my understanding.
Mr. Bergman. Okay. So no more funds expended.
Ms. Czarnecki. No more funds expended. We will be looking
at our return on investment in the business cases of the
equipment that has been deployed, the applications that have
been deployed, to determine if we want to further expand.
Mr. Bergman. Okay. So you're just terminating the contract
when it expires, not renewing it?
Ms. Czarnecki. Right. Not renewing.
Mr. Bergman. Okay.
And, again, Ms. Czarnecki, I understand that the chief
logistics officers in the VISNs inspect the medical center
logistics departments annually. Is that correct?
Ms. Czarnecki. Yes, they do.
Mr. Bergman. Okay. So it's also my understanding that VISN
5 did not conduct any logistics inspections of the D.C.
facility, in 2016 or 2017. That was during the OIG's
investigation when the supply issue was under intense scrutiny.
How do you explain the fact, when there's a lot of bad
things going on that you can see, why weren't there
inspections?
Ms. Czarnecki. There was actually an inspection done in
2017 by the program office. We actually had people from the
program office who staffed the D.C. medical center through
November of 2017. Their staffing was down to 40 percent of what
they should have had.
Mr. Bergman. Okay. Well, I'll tell you what. What was the
result of the inspection?
Ms. Czarnecki. They were not, in fact, using the Catamaran
system. They did not have an inventory management system. They
were not using GIP. They were using paper systems.
Mr. Bergman. So, basically, they weren't complying with any
of the directives. That was determined during an inspection.
Were the people in charge on a daily basis monitoring the fact
that they weren't doing what they were supposed to be doing
with RTLS or Catamaran or whatever else?
Ms. Czarnecki. The Chief Logistics Officer at the medical
center would've been ultimately responsible. The medical center
director was aware of the issues as well. Both of them have
since been removed from their positions.
Mr. Bergman. ``Removed'' as in still employed by the VA, or
removed and terminated?
Ms. Czarnecki. The medical center director was terminated.
I believe the Chief of Logistics was also terminated, but I'm
not positive if he voluntarily left or if he was terminated.
Mr. Bergman. Okay.
Mr. Dahl, your colleagues in the Office of Inspector
General conducted the investigation at the Washington, D.C.,
medical center's logistics and supply practices. As I mentioned
in my opening remarks, there seem to be varying accounts as to
the extent Catamaran was ever used there at all. What did your
office observe?
Mr. Dahl. The team that was there determined that Catamaran
was never fully used at the D.C. medical center and that, prior
to the Catamaran, they weren't using the GIP fully before the
transition to Catamaran as well.
Mr. Bergman. So they were a little bit behind the power
curve, as we might say in flying, already. Why would we even
consider choosing them if they're already struggling to do
their day-to-day operations? Why would we choose them as a
pilot site or a test site if they don't have their act together
on the front end?
Ms. Czarnecki. We thought that installing the Catamaran
system would actually assist them. The Shipcom organization
came in and built the inventory system for them, so they did
utilize it for a very short period of time. But it's something
that you need to maintain, and as soon as folks were not paying
as much attention, they quit maintaining the system and went
back to their paper system.
Mr. Bergman. Okay.
I see my time has expired here. I'm going to ask my
colleagues, would anyone like a second round of questions?
You're good? Okay.
I'm going to ask one final one here as I go into the
closing remarks.
I heard you mention that, in trying the Catamaran system or
RTLS, there was nothing like this that existed in the health
care system, in hospitals around the country, outside of
federally run.
So why would VA try to eat this elephant, if you will, in
one bite without having any reference point to start from, as
far as success or failures, in--whether it be Humana, pick your
hospital chain that is run around the country. Why would VA
gamble the valuable, limited taxpayers' dollars focused on the
veterans? Why would they gamble on being a lab for this? What
was the risk management involved with that?
Ms. Czarnecki. So Catamaran is an integrator of software.
Automated supply chain systems do exist and have existed in
private sector. Perhaps this wasn't the best choice for us. We
had made an incorrect assumption that, with a COTS product, it
was off-the-shelf and that we would be able to implement it
fairly easily. That did not happen.
RTLS was kind of new for the health care space back in
2010. It's being used widely now to manage sterile processing,
cath labs, track patients, track providers, frankly, so I know
where a doctor is, whether he's in the OR, or whether he's in
clinic. So I think that VA wanted to be on the cutting edge and
make sure that our veterans had the latest technology.
We have received benefit from the RTLS system. We are
seeing cost savings every day in our cardiac cath labs. Our
sterile processing--
Mr. Bergman. But is the VA, given the fact of maybe its
decentralized nature of some of the operations and the fact
that I think we've seen before that some of the VISNs don't
necessarily coordinate and talk with one another--and when you
put test sites together or pilot programs together, unless you
focus the group and hold the people accountable for that
mission of ``here is what we're trying to accomplish, here are
our timelines, here are the metrics that we are trying to
achieve,'' it would seem to me that the VA is not the place
capable of doing as complex a technology project as objects
this. And, therefore, because it's not the right place, the
veterans' care potentially suffers much more than it should.
So, I guess it concerns me that we are trying to do too
much, when we may not have the expertise and the tight
coordination to actually assess the results of what it is we're
trying to achieve.
So I would ask that you would submit for the record any and
all disciplinary action taken as a result of poor performance
relating to the Catamaran and RTLS projects so that we know who
in fact was held accountable for those failures.
With that, I'd like to thank the witnesses for your
testimony. The panel is now excused.
The failure of the Catamaran point-of-use system and the
rocky experience with the RTLS to-date should serve as
cautionary tales. What the two efforts have in common, beyond
both being logistics technology projects, is that they are
complex collaborations between the Veterans Health
Administration and the Office of Information and Technology.
Nearly everything VA does in the medical arena relies on
software, and most of the Department's software impacts that
medical care.
In RTLS specifically, many of the problems encountered were
not just the result of the two organizations struggling to
cooperate; they were the result of VHA deliberately avoiding
OI&T and its processes. Although the events in question took
place several years ago, this sort of friction, the natural
friction between bureaucracies, between VHA and OI&T, has been
an issue since OI&T was first established in 2006.
We have to get it right, because the stakes are
dramatically increasing. The Electronic Health Record
Modernization Program, which we have been awaiting since last
year, is perhaps the largest medical information technology
collaboration in the history of the Federal Government. Its
scope and its scale are challenging enough, and the VA cannot
afford this sort of organizational infighting.
The Committee is committed to exercising vigorous oversight
of the Cerner implementation. We are united on this issue. This
is bipartisan.
This morning, we approved H.R. 4245 in markup, the EHRM
Oversight Act. I am proud to cosponsor the legislation with
Ranking Member Walz, Chairman Roe, and Ranking Member Kuster.
I believe that the many lessons learned through the RTLS
project are directly applicable to the Electronic Health Record
Modernization. RTLS, without a doubt, produced some tangible
benefits despite its setbacks. And, by all means, it is
preferable to learn these lessons in a half-billion-dollar
project--that's ``half-billion'' with a ``B''--before taking on
the $16 billion project. But VA cannot--I repeat, cannot--
repeat the same mistakes again. That will be totally
unacceptable.
We will continue to monitor the RTLS as it enters what I
hope are its final months, not years.
I ask unanimous consent that all Members have 5 legislative
days to revise and extend their remarks and include extraneous
material.
Without objection, so ordered.
I would once again like to thank my colleagues and all our
witnesses and the audience members for joining us here this
afternoon.
With that, the hearing is now adjourned.
[Whereupon, at 3:16 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Prepared Statement of Tammy Czarnecki, MSOL, MSN, RN
Good afternoon Chairman Bergman, Ranking Member Kuster, and Members
of the Subcommittee. I appreciate the opportunity to discuss the
Department of Veterans Affairs (VA) Real-Time Location System (RTLS)
project and VHA's Point-of-Use (POU) program. I am accompanied today by
Dr. Alan Constantian, Deputy Chief Information Officer, Office of
Information and Technology (OIT).
Introduction
In 2011, VA chartered several major transformation initiatives,
including two to improve Health Care Efficiency, the RTLS project and
the POU program. RTLS project was chartered to automate processes and
improve health care services that VA provides to Veterans. The primary
objectives of RTLS are tracking medical and surgical instruments
through sterile processing, automating inventory management of
specialized medical supplies in Cardiology, extending utilization and
safety of medical equipment by knowing its location in real time, and
monitoring temperature of medication storage areas. In addition to
improving operational efficiency, these RTLS applications create a
safer system of care for Veterans. VA planned to deploy RTLS in several
phases within the Veterans Integrated Service Networks (VISN) and
Consolidated Mail Outpatient Pharmacies, with the goal of deploying
RTLS to all VA medical facilities.
The VHA POU program was chartered to acquire and install a
Commercial-Off-The-Shelf (COTS) supply chain management system to
effectively manage the consumable medical supply inventories throughout
the medical center. An effective supply chain management system would
allow visibility of stock levels of consumable supplies by employing
different technologies to provide data to minimize stock outs, decrease
process inefficiencies, and create cost savings by reducing excessive
supply inventories.
The RTLS and POU programs had separate and distinct functions
relating to health care operations and the VHA supply chain. RTLS
centered on medical equipment and instrument tracking and specialized
medical supplies specifically in the Cardiac Catheterization (Cath)
Lab, while POU focused on all consumable supplies used in patient care.
Deployment of RTLS
While basic RTLS technology (otherwise known as Radio Frequency
Identification) is commonplace in several industries, it is relatively
new to health care. VA conducted market research through site visits,
industry days, and limited scope demonstrations. We defined
requirements and determined an acquisition strategy. In June 2012, VA
awarded a firm-fixed-price, indefinite delivery, indefinite-quantity
contract to Hewlett Packard Enterprise Services (HPES). The contract
scope encompassed design, installation, testing, and maintenance of
RTLS. Task orders were to be issued against the contract, which had a
$543 million ceiling. The two initial task orders issued were for
deployment of RTLS in VISN 23 and for system design standards and
interface development. Sixteen task orders were subsequently issued. As
of April 2018, the total awarded value was $345 million against the
contract.
The RTLS project is jointly managed by VHA and OIT, per a
Memorandum of Understanding signed in 2011 by the Under Secretary for
Health and the VA Chief Information Officer. The RTLS solution utilizes
COTS technologies and software to directly support patient care
delivery and outcomes. VHA established a Project Management Office to
assist VHA facilities with the procurement and deployment of RTLS and
to coordinate project execution with OIT. Contracting Officer
Representatives (COR) were assigned to manage each task order,
typically a VISN-level biomedical engineer for VISN task orders, or an
information technology (IT) project manager for IT task orders.
RTLS requires extensive infrastructure to be installed throughout
entire hospital buildings, with design and installation generally
taking 1-2 years. Consistent with objectives of the major
transformation initiative, installation progressed simultaneously at
facilities to achieve transformational benefits across VA. The Fargo VA
Medical Center (VAMC) in VISN 23 was the first site to complete
installation and test the system in March 2015. VA identified several
defects, and the contractor was formally charged to correct them. The
progress on deployment in other facilities was delayed or halted while
Fargo VAMC discrepancies were investigated. During that time, VISN 23
and VISN 8 task orders expired.
With technology projects of the scope and complexity of RTLS, it is
common to periodically reassess the program and adjust the approach to
achieve the best outcome and minimize programmatic and cost risks. In
September 2016, VA made a program decision to realign the RTLS program
and entered into negotiations with HPES with a shared goal to expedite
the implementation of the RTLS solution. Specifically, to capture the
agreements made during these negotiations, VA modified the existing
RTLS contract and executed a Global Settlement Agreement that resulted
in a realigned implementation strategy, agreement on system
requirements, improved clarity of location accuracy objectives, and a
new deployment schedule through 2018. Changing the implementation
strategy to deploy applications independently and in phases has led to
positive deployment progress.
Positive Outlook
The deployment of RTLS accelerated following the contract
renegotiation, with many positive outcomes continuing through the
present. VHA is realizing benefits from all RTLS applications. The
Sterile Processing solution has been successfully implemented at 60
facilities. With 1,000,000 surgical and dental instruments being
tracked, the right instruments are being delivered to the right
Operating Room for the right surgical procedure. The Cath Lab solution
has been deployed at 28 facilities and is generating notable supply
cost savings. In fiscal year (FY) 2017, one VAMC reduced Cath Lab
supply costs by $700,000 due to more efficient management. Many VISNs,
including VISNs 8 and 23, are utilizing the Sterile Processing and Cath
Lab solutions.
Asset Tracking deployment, the most infrastructure-intensive RTLS
application, has also progressed. Asset Tracking has enhanced the
safety, utilization, and maintenance of medical equipment. For example,
one hospital remediated a safety issue with 300 infusion pumps within 2
weeks because all infusion pumps were quickly located. Without RTLS, it
would have taken 2 months and significantly more labor hours to
complete the safety remediation. Infusion pumps administer medication
intravenously and equipment errors may lead to patient harm. VA intends
to use RTLS to track location of its entire fleet of 35,000 infusion
pumps, which will have immense positive impact on patient safety. An
additional example of the efficacy of RTLS is that it allows hospital
staff to proactively retrieve equipment for cleaning after patient use,
thus maximizing availability of equipment for patient care. Asset
Tracking installation is substantially complete at 32 sites, with
system testing in progress. 105,000 equipment assets are tagged for
real time location awareness.
VHA is gathering benefits data and will assess the return on
investment over the next year. The early measures of success in both
Cath Lab and Sterile Processing is positive and has led to increased
interest from other VHA facilities to implement the solutions.
VHA and OIT Response to OIG Report Findings
In September 2015, the VA Office of the Inspector General (OIG)
received an allegation claiming VA management failed to comply with VA
policy and guidance when it deployed RTLS without appropriate project
oversight. OIG conducted an official review, spanning the time period
during and after completion of the Global Settlement Agreement. The
review resulted in three findings that VA contested, but agreed to
implement to further strengthen the program.
OIG recommended that VA apply additional resources and implement
improved integrated project management controls for the remainder of
the project. VHA and OIT have continued to align and improve project
management processes following the conclusion of the contract
renegotiation and publication of the OIG report. More than 100 gate
reviews have occurred since October 2017 at various steps in the
deployment and testing process.
The OIG finding that VA did not follow an incremental project
management approach was based on an interpretation of VA policy
regarding management of IT projects. The September 29, 2017, OIG
Report, ``Review of Alleged Use of Wrong VA Funds to Purchase
Information Technology Equipment,'' concluded that the use of medical
funds for RTLS was appropriate. The RTLS deployment efforts have been
managed utilizing sound project management practices. For example, gate
reviews are conducted for various milestones, and deployment work in
several VISNs was paused following unsuccessful testing at the Fargo
facility. Additionally, planned investments were suspended pending
successful deployment of RTLS at lead facilities.
OIG identified the need for VA to implement improved risk
assessment oversight to identify potential vulnerabilities that may
adversely affect other VA systems. VA conducted risk assessments prior
to previous RTLS deployments and an Authority to Operate was in place
for all systems that were deployed to the network. VA will perform
continual risk assessments to assure that the risks associated with
deploying additional RTLS systems on the VA network are minimized.
The VHA POU Program
A POU system provides asset visibility to the asset's POU. VA
defines our POU as the medical supply rooms scattered in the wards and
other clinical care facilities located throughout VAMCs. POU systems
rely on enabling processes and technologies to include automated
storage units, bar coding, and Kanban. The premise behind Kanban
involves using a highly visual cue, such as an empty bin, to signal the
need for replenishment. The VA system would utilize an integrating
software system to bring these capabilities together to improve asset
management efficiency. POU system software provides a fully integrated
and intuitive platform through which an organization can analyze,
monitor, and conduct the majority of data-driven tasks. There is an
opportunity to collect, store, and administer data analysis through a
single convenient portal, ensuring seamless communication within an
organization. Integration would also allow for optimal tracking,
collection, and analysis of data on all tasks, records, information,
and activities performed within a system. This would increase
efficiency on a large scale, ensuring smoother operations and improved
productivity.
On April 11, 2013, the Executive Decision Memorandum creating the
VHA POU program was funded with $58 million of FY 2013 expiring funds.
The POU program was envisioned and intended to provide an integrated
supply chain management system capable of providing consolidated data
to facilitate supply chain management. The consolidated data would be
used to effectively manage consumable medical supply inventories
throughout the VAMC, including the secondary (patient care area)
inventory level, decreasing excessive stock levels, decreasing process
inefficiencies and providing costs savings opportunities, and providing
for expanded use of medical and surgical vendor contracts.
In June 2013, an acquisition package was assembled and provided to
the contracting office, Program Contracting Office - East. VA solicited
a full and open competition request for proposals, ultimately netting
three proposals. The competitive range reduced the number of offerors
for consideration to two. Both offers were evaluated in accordance with
the source selection plan and based upon their technical proposal.
Shipcom Wireless, Inc., a small disadvantaged business, was awarded the
contract on September 23, 2013.
The contract required 20-35 assessments and implementations in each
contract period. Assessments were to document current state of
technology, inventory management processes and procedures, and stock
levels in each facility. After an assessment was completed, the
Contractor was to propose a POU solution, including automation, storage
equipment, and processes, designed to create efficiencies and provide
data to manage inventory stock levels. During the base period of the
contract 27 site assessments were completed, but due to contractor and
government delays, only 8 of the 27 sites were implemented with the
Contractor's solution (Catamaran). The first option period was
exercised in September 2014 and while no new assessments were
completed, 14 more sites were implemented. The contractor was
significantly behind schedule, and because there were other
implementation delays, it became apparent that they would not be able
to complete the required number of facilities within the contractually
specified time period. Thus, modifications to the contract were
executed. The second option period was exercised in September 2015, but
due to schedule delays, assessments for this period did not begin until
December 2015. VHA leadership was committed to the continuation of the
program, and the Contractor was required to submit a corrective action
plan, outlining a schedule catch up. No assessments or implementations
were completed in the second option period as the Contractor proposed
significant changes to the contract pricing to complete the work.
In April 2016, a new Contracting Officer and COR were assigned to
the project who in turn reiterated to the contractor that the contract
was firm-fixed-price and clearly restated the contract requirements and
deliverables. The Program Office worked with the vendor to identify
specific shortcomings in the required site assessment reports, such as
lack of site implementation plans, billing and invoicing deficiencies,
and insufficient site documentation and equipment inventory records.
On June 3, 2016, a corrective action plan was submitted by the
vendor requesting another time extension for an additional $59.9
million to complete the contract requirements. This corrective action
plan did not provide corrective actions based on governmental concerns,
rather it proposed additional work and additional costs to the
performance work statement already part of the contract. The contractor
was unable to complete site assessment reports in accordance with the
contract requirements despite numerous attempts to review report
deficiencies and to provide guidance to correct said deficiencies. The
Program Office also began investigating the recurring costs of future
software licenses and maintenance. Research showed that these costs
would be an estimated $54 million per year, even with a proposed
decrease in license fees. This figure was deemed unsustainable based on
the following: a new Return on Investment analysis was performed by the
Veterans Engineering Resource Center, utilizing the vendor's new
implementation costs and extension request. The result of this analysis
indicated that the POU program would not see a ``break even'' on the
investment of $275 million for over a decade.
In addition to escalating costs proposed by the vendor, the Shipcom
POU solution, including its supporting Catamaran software, was not
meeting contractual requirements, nor was it meeting the intended
operational needs of the program to ``establish an integrated supply
chain system that was capable of providing consolidated data to
facilitate supply chain management.'' The decision was made to stop
further assessments and implementations and not exercise future option
periods of the contract.
Upon decision to discontinue the contract effort, a plan was
derived to transition the 22 sites that had converted to the Catamaran
system, including the DC VAMC, back to VA's Generic Inventory Package
(GIP). The POU program team pulled the consumable supply inventory data
from the Catamaran system and uploaded that into GIP using the Excel
tool. Over the course of seven weeks in January and February 2016, the
POU program team traveled to the sites to educate the facility staff on
use of the tool and to transition the data.
Conclusion
RTLS has significantly improved the efficiency and safety of health
care of our Veterans. Patient safety and infection control are improved
because surgical instruments are being tracked through sterile
processing. Utilization, safety, and maintenance of medical equipment
are improved. Cost savings are being realized in Cath Labs. In order to
sustain these efforts, we ask Congress for continued support of VA
modernization by investing attention and financial resources into this
process automation system that is crucial in keeping our Veterans safe.
It is critical that we continue to move forward with the current
momentum and preserve the gains made thus far. Your continued support
is essential to providing care for Veterans and their families. Mr.
Chairman, this concludes my testimony. My colleague and I are prepared
to answer any questions.
Prepared Statement of Nicholas Dahl
Mr. Chairman, Congresswoman Kuster, and Members of the
Subcommittee, thank you for the opportunity to discuss the Office of
Inspector General's (OIG) report, Review of Alleged Real Time Location
System Project Mismanagement. \1\ Our statement today focuses on our
review of whether VA effectively managed the Real Time Location System
(RTLS) project to meet cost and schedule targets, and performance and
security needs. I am accompanied by Mr. Michael Bowman, Director, OIG's
Information Technology and Security Audits Division.
---------------------------------------------------------------------------
\1\ Published on December 19, 2017.
---------------------------------------------------------------------------
BACKGROUND
Since 2000, the VA OIG has identified Information Technology (IT)
Management as a major management challenge because VA has a history of
not properly planning and managing its critical IT investments. OIG
audits in recent years established that IT systems development at VA is
a long standing high-risk challenge, susceptible to cost overruns,
schedule slippages, performance problems, and in some cases, complete
project failures. VA continues to face challenges in developing the IT
systems it needs to support VA's mission goals.
In 2011, the Veterans Health Administration (VHA) selected RTLS as
the technology to provide tools to assist in the automation and
improvement of operations and health care services that VHA provides to
its veterans. RTLS was created to support VA's Health Care Efficiency
major transformation initiative and to enable VHA to achieve clinical
objectives, administrative process efficiency, and total asset
visibility. In particular, RTLS uses multiple technologies for locating
and tracking medical equipment. VHA intended to deploy it at all
medical facilities nationwide.
In June 2012, VHA awarded a firm-fixed-price, indefinite-delivery,
indefinite quantity negotiated contract with a $543 million ceiling to
Hewlett Packard Enterprise Services to deploy a nationally integrated
RTLS solution over the course of five years. This solution was to
include commercial off-the-shelf technologies and software
applications. The RTLS procurement and implementation process was a
cooperative effort between VHA, the Office of Acquisitions and
Logistics, and the Office of Information and Technology (OIT).
VA policy required that the RTLS project be managed under VA's
Project Management Accountability System (PMAS). PMAS was a project
management system intended to establish a discipline to ensure that an
IT project's customer, project team, vendors, and all stakeholders
would focus on a single compelling mission-achieving on-time project
delivery. PMAS used incremental product build techniques for IT
projects with delivery of new functionality, tested and accepted by the
customer, in cycles of six months or less.
REAL TIME LOCATION SYSTEM PROJECT
We received a complaint alleging VA management failed to comply
with VA policy and guidance when it deployed RTLS assets without
appropriate project oversight. The complainant also stated that VA
deployed RTLS assets without meeting VA information security
requirements. Consequently, we focused our review on whether VA
effectively managed the RTLS project to meet cost and schedule targets,
and performance and security needs.
In December 2017, we reported that management failed to comply with
VA policy and guidance when it deployed RTLS assets without appropriate
project oversight. Specifically, we concluded the RTLS Project
Management Office (PMO) did not follow guidance from VA's Technology
Acquisition Center (TAC) to use an incremental project management
approach during the acquisition and deployment of RTLS assets to
compensate for numerous known project management risks. We also
reported that the RTLS PMO did not comply with VA policy requiring the
use of the PMAS incremental oversight processes for all acquisitions
and delivery of RTLS assets. Despite TAC guidance and VA policy, the
RTLS PMO did not ensure the vendor could meet contracted functionality
requirements on the initial $7.5 million task order, such as accurate
asset tracking, before ultimately committing a total of $431 million to
the same vendor for further RTLS deployments.
VHA had awarded an initial $7.5 million task order to deploy RTLS
to one of its Veterans Integrated Service Networks (VISN) with an
expected delivery date in December 2013. \2\ However, during initial
VISN operational testing in March 2015, VHA identified 245
functionality defects that resulted in the issuance of a contract cure
notice \3\ to the vendor. By June 2016, the cure notice was still
unresolved, as 46 significant defects were still outstanding including
RTLS' inability to meet contract requirements for asset tracking and
software functionality. Overall, the VISN task order included more than
20 contract modifications that resulted in changes to the project's
scope and schedule, and significantly increased the final task order
costs. The VISN allowed this task order to expire on the contract end
date in July 2016 and ended its participation with the RTLS project.
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\2\ VISN 23 - VA Midwest Health Care Network (Eagan, Minnesota and
Lincoln, Nebraska)
\3\ Per FAR 49.607, a cure notice informs the contractor of a
specific failure and gives them an opportunity to cure the defect
within 10 days.
---------------------------------------------------------------------------
In September 2016, VA renegotiated the RTLS contract due to the
vendor's inability to implement a functional RTLS solution. The
renegotiation was intended to realign RTLS and expedite the
implementation of the RTLS solution in each VISN. Specifically, VHA
executed a Global Settlement Agreement that resulted in extensive
changes to the vendor's contract requirements, to include expiration of
task orders for two VISNs, reduction in the scope of RTLS applications
deployed, extension of the contract period of performance through June
2018, and commitment of $431 million in total costs to the vendor as of
December 2016. According to the agreement, VA also released the
contractor from any liability claims related to prior performance on
the contract.
We also found that VA deployed RTLS assets without appropriate
project oversight because management failed to provide effective
oversight of the RTLS project from acquisition through development and
implementation. Specifically, VA's Office of Planning and Policy's
Enterprise Program Management Office provided minimal oversight of RTLS
project management activities. Further, the RTLS PMO did not follow
project implementation policy, including adherence to VA's PMAS process
and lacked the oversight authority to ensure success of an enterprise
level deployment involving information technology.
We also substantiated the allegation that VA deployed RTLS assets
without meeting VA's information security requirements. VA's
fundamental mission of providing benefits and services to veterans is
dependent on the Department deploying secure IT systems and networks.
VA's information security program and its practices are designed to
protect the confidentiality, integrity, and availability of VA systems
and data. Specifically, we reported the RTLS PMO and OIT personnel
deployed RTLS assets without the appropriate system authorizations
needed to connect such devices to VA's network. This inadequate
oversight of RTLS risk management activities left VA mission critical
systems and data susceptible to unauthorized access, loss, or
disclosure. Consequently, VA's internal network faced unnecessary risks
resulting from untested RTLS system security controls.
Given the uncertainty of the project, future RTLS cost estimates
are unknown. Further, we reported, that VA must exercise cost control,
sound financial stewardship, and discipline in RTLS development. VA
also must demonstrate that RTLS is a worthwhile investment, providing
taxpayers with a good return on investment. Consequently, we stated
that it is imperative that VA use incremental and validation-based
project oversight processes to ensure that VA does not incur additional
project costs without achieving RTLS required functionality. VA's
failure to deliver a successful RTLS solution will prevent the
Department from achieving its Health Care Efficiency goals of facility
automation, administrative process efficiency, and total asset
visibility. As a result of inadequate project management, VA lacked
assurance of an effective return on the $431 million invested in RTLS
and that deployed assets were operating in accordance with contract
requirements.
We provided several value added recommendations for improving
controls over VA's oversight of system development projects. This
included recommendations addressing the need for VA to apply additional
resources and implement improved integrated project management controls
for the remainder of the project to restrict further RTLS cost
increases and the need to enforce the use of incremental project
management and validation controls on all remaining RTLS task orders to
ensure such efforts will provide an adequate return on investment.
The Executive in Charge, Office of the Under Secretary for Health
and OIT's Acting Assistant Secretary concurred with our
recommendations. The Executive in Charge reported VHA and OIT are
addressing program resourcing and project management controls and will
implement improved controls. Management also stated that OIT committed
a senior project manager resource and VHA will pursue approval of
increased staffing. Additionally, an RTLS Governance Council, which
will have responsibility for defining cost, scope, and schedule
performance metrics, is in development. Furthermore, the Executive in
Charge reported the RTLS Governance Council will assure implementation
of project management oversight that includes organizational risk
management for technology deployment. Regarding the information
security finding, the Acting Assistant Secretary reported that OIT will
conduct risk assessments prior to future deployments to minimize risks
associated with the deployments. The OIG will monitor implementation of
planned corrective actions to ensure that our recommendations are
addressed.
CONCLUSION
Our recent work demonstrated that VA continues to face challenges
in managing its IT development projects. Our review of RTLS indicated
VA needs enhanced discipline, oversight, and resource management to
support successful IT development. VA has taken some actions to address
issues we identified in our RTLS report and in other recent reports;
however, it remains to be seen whether the actions will effectively
improve VA's ability to meet cost, schedule, performance, and security
goals when managing mission-critical system initiatives.
Mr. Chairman, this concludes my statement. We would be happy to
answer any questions you or Members of the Subcommittee may have.