Navy picked over industry for VA work

The Veterans Affairs Department has chosen the Navy to develop an automated system that will process claims for educational benefits, reports NextGov.

In an Oct. 17 letter sent to the House and Senate VA committees, and obtained by Nextgov, VA Secretary James Peake wrote that the agency has hired the Space and Naval Warfare Systems Command (SPAWAR) in Charleston, S.C., to build a system to process educational benefits for veteran as outlined in the 2008 GI bill which President Bush signed into law in June.

The bill, called the Post-9/11 Veterans Educational Assistance Act, was part of the 2008 Supplemental Appropriations Act that provided veterans with expanded educational benefits. For example, the bill hikes payments for tuition from $1,300 a month to a payment that is pegged at the highest tuition at a public university in a veteran's state of residence, which for Massachusetts would be $10,232. The bill includes monthly living expenses of $1,100 to $1,200.

In July, VA planned to develop a procurement for the new system through the Office of Personnel Management's Training and Management Assistance contract, said Keith Pedigo, assistant deputy undersecretary at the Office of Policy and Program Management at the Veterans Benefits Administration. He testified at a hearing of the House VA committee on Sept. 24.

Pedigo told the panel that the general counsel at the Office of Personnel Management had "serious concerns" about OPM's authority to conduct the acquisition, and VA decided to run the procurement itself, and issued a request for proposals on Aug. 29.

But the Veterans of Foreign Wars' National Legislative Service objected to the contracting plan for the new system. Dennis Cullinan, director of legislative policy at the group, said at the hearing that the contract would allow a vendor to own the software and system source code, which would give the contractor the ability to sell a license to VA to operate the system. When the license expired, the contractor could set any pricing term for a follow-on contract, which could lead to VA being "held hostage" by the vendor, he said. To avoid that, Cullinan said VA must own the software and system source code.

The America Federation of Government Employees filed a protest with the Government Accountability Office on Aug 5, claiming VA violated an Office of Management and Budget requirement to conduct a public-private competition before contracting out work done by federal employees. In the protest, Alma Lee, head of the AFGE National VA Council, argued that hiring a vendor to develop the claims processing system would reduce the number of employees processing education benefit claims from 480 to 50.

VA made an interagency agreement with SPAWAR on Oct. 10 to build the new system.