VA creates business board

Determined to make the Veterans Affairs Department function more like a business, Secretary Anthony Principi recently launched an oversight board to monitor the department's efforts to adopt private sector practices. Principi chairs the board, which includes consultants as well as agency executives.

"The impetus was, I don't like to leave money on the table." Principi says.

"I believe we need to do a much better job to realize greater efficiency."

The board's primary focus is procurement reform. The VA spends nearly $6 billion each year on everything from pharmaceuticals to IT systems. Last May, Principi announced a series of procurement reforms designed to leverage the department's buying power and reduce costs.

The goals focus on using national contracts for commonly used items such as medical supplies. As it is now,VA hospitals and regional directors can contract locally for such goods. For instance, 38 different vendors supply theVA with stents, devices used to keep arteries from collapsing, for which the department paid $20 million last year. By consolidating purchasing power into fewer contracts, Principi believes the department can save between $250 million and $450 million in medical and prosthetic supplies alone over the next five years. The oversight board will ensure that procurement reforms are implemented across AVA agencies. It also will keep tabs on how small businesses-particularly those owned by veterans with disabilities-- fare under the reforms. Principi acknowledged that under the new approach, many small businesses would have difficulty becoming prime contractors. Currently, small businesses have been awarded 35 percent of standardized VA contracts. -Matthew Weinstock