Veteran-owned small firms hit first by VA's push for $2B in contract cuts

Veterans Affairs Secretary Doug Collins has posted on X to claim that the Veterans Affairs Department is on its way to cutting $2 billion in contracts.

According to the Department of Government Efficiency dashboard, 28 VA contracts have been cancelled with claimed savings of $81 million. DOGE also says the awarded contract values total $148.6 million.

That gap is explained by the fact that many of the contracts have been underway for some time. VA has already paid for some of the products and services performed under the contract.

Four contracts on the dashboard (DOGE calls it the Wall of Receipts) have zero savings.

In his X posting on Tuesday, Collins said that cancellations so far as just the first step toward the $2 billion.

But it appears that service-disabled, veteran-owned small businesses are taking a disproportionate hit so far.

Of the 28 cancelled contracts, 20 were held by service-disabled/veteran-owned small businesses. One was held by a veteran-owned small business.

The value of the 21 contracts held by veteran-owned businesses totals $121.4 million in awarded value. From those cancelled contracts, DOGE claims that will result in savings of $72.6 million.

VA is required by the 2006 Veterans Benefits, Health Care, and Information Technology Act to use veteran-owned small business, both service-disabled and otherwise, when at least two veteran-owned companies can provide the services being procured.

Deltek data indicates VA awarded $9.7 billion in contract obligations to service-disabled, veteran-owned businesses in federal fiscal year 2024, which equates to 14.3% of VA's $67.6 billion in total contract spend.

Of the $81.1 million in savings claimed by DOGE, cuts to veteran-owned small businesses accounted for 89.2% of the claimed savings.

In looking at the total contract value, the cancellations of contracts held by the veteran-owned small businesses represented 81.7% of the $148.6 million in claimed cuts.

Five of the contracts are held by large businesses. One large business holds two of those contracts. The total awarded value is $19 million and DOGE expects savings of $606,000.

One nonprofit company and one woman-owned small business also saw their contracts cancelled.

In his X posting, Collins said that millions of dollars of contracts have been spent on consultants who are developing PowerPoint and taking meeting minutes.

“Folks, if you don’t know how to run PowerPoint slides learn. It’s a tutorial on your computer,” Collins said on his video.

But after looking at the DOGE database and its connection into the Federal Procurement Data System, it is hard to discern if any of the so-far cancelled contracts are for PowerPoint and notetaking.

There are two contracts for LinkedIn-related services. A contract for Politico subscription services was cancelled, as was a news-clipping service. VA also cancelled two contracts related to LBGTQ outreach efforts.

But many other contracts are for digital modernization, IT services, program management and business process engineering.

Several of the service-disabled/veteran-owned small businesses hold spots on the Veterans Health Administration Integrated Healthcare Transformation contract, a $1.5 billion vehicle awarded to six companies in 2020.

IHT has three functional areas for health systems transformation, implementation and operations support, and healthcare business enabling services.

Three of the six winners -- Titan Alpha, Aptive HTG and HRS Consulting -- are on the DOGE list with their contracts cancelled. DOGE claims those cancellations will generate savings of $5.7 million.