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GAO recommends VA rebid medical exam contracts

The U.S. Government Accountability Office is recommending the Department of Veterans Affairs rebid its contracts for conducting medical exams for thousands of vets applying for disability payments after concluding the VA made several prejudicial errors in its process.

The decision, issued to interested parties last week, sustains the protests of some competing firms upset that the largest chunk of the $6.8 billion in contracts went to QTC Medical Services, a California firm once headed by former VA Secretary Anthony Principi. The company was sold in 2011 to Lockheed Martin, but Principi now serves as a lobbyist for the firm.

“VA made several prejudicial errors in evaluating the proposals for these contracts,” the GAO said in a summary of its decision. “The VA misled two of the (competing firms) during the conduct of discussions or negotiations. These errors led the VA to make source selection decisions that GAO found were unreasonable because they were based on erroneous conclusions in support of the contracts awarded.”

Among those protesting the awards were Veterans Evaluation Services of Houston, Logistics Health of La Crosse, Wis., and Medical Support Los Angeles of Pasadena, Calif.

The decision was issued under a protective order because the full decision contains confidential proprietary information from the competing firms. The actual ruling will be issued after the confidential information is redacted, according to the July 13 notice.

Principi, who left QTC in 2001 to become VA secretary only to return to the company four years later, said in response to Tribune-Review questions that he was not involved in QTC’s bid effort. He said he was not a founder of QTC but joined the company after its founding by Lay Kay.

“I never read any of the (bid) documents,” he wrote in response to questions.

“I’m confident that the process will lead to a result that serves the best interests of veterans. The integrity of the government’s procurement process should be above reproach and free of outside influences,” Principi added.

Congressional lobbying records show Principi’s firm, The Principi Group, registered as a lobbyist for Lockheed Martin in 2014.

Its listed lobbying mission: “Determine the benefits and medical affairs requirements of the Department of Veterans Affairs.”

The GAO action comes as several members of Congress questioned the award. In addition, the House Veterans Affairs Committee has initiated an investigation into how QTC conducted exams of veterans claiming injuries from exposure to Agent Orange under a previous contract.

The inquiry was made in response to charges in a federal whistleblower lawsuit by former QTC employee David Vatan alleging the exams of veterans claiming exposure were rushed and not properly completed. The suit was dismissed on a technicality, but an appeal is pending.

Walter F. Roche Jr. is a contributing writer for the Tribune-Review. Reach him at [email protected].


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