VA Won’t Outsource New GI Bill

Miracles never cease.

In a quiet announcement made earlier this month, the Bush administration said it has canceled plans to outsource the development of an IT system under the new GI Bill, which became law in June.

The Veterans Affairs Dept. had previously claimed that a private contractor would be required to get the new claims-screening system up and running by the statutory August 2009 deadline. But veterans groups and some lawmakers blasted that plan, saying the VA was better equipped to do the job itself.

Those critics can rest easy. In a statement issued Oct. 13, VA Sec. James B. Peake said the agency simply didn’t receive enough proposals from “qualified” private contractors to continue with its outsourcing plans.

“Many private contractors were apparently reluctant to offer proposals because of external misconceptions as to the scope of the work involved,” Peake said. “While it is unfortunate that we will not have the technical expertise from the private sector available to assist us in developing the information-technology solution, the VA can and will deliver the benefits program on time.”

These are curious sentiments coming from Peake, for at least three reasons.

First, if the VA can do the task on its own, why was there ever a need for the outsourcing plan?

Second,  he  seems to imply that the private sector is more competent in its technical know-how than the department he runs — something disputed by veterans groups and other critics of the outsourcing plan.

Finally, until last October, Peake was chief operating officer and chief medical officer of QTC Management, Inc. — an enormous health-benefits contractor that was widely believed to be in contention for the IT-development job for VA. (QTC, on its Web site, claims to be “the largest private provider of government-outsourced occupational health, and injury and disability examination services in the nation.”)

The company is now headed by Anthony J. Principi, who was George W. Bush’s first VA secretary, serving from 2001 to 2005.

So, does the VA’s recent announcement mean that QTC isn’t qualified, or didn’t bid? The VA isn’t saying, and QTC didn’t return calls either.

Meanwhile, veterans groups don’t care, applauding the decision regardless of the reason. In an Oct. 13 statement, American Legion National Commander David K. Rehbein said that VA employees are best suited for the task because they have the most experience working directly with veterans. “The VA employs IT personnel with intimate knowledge of how to best serve the veterans’ community,” Rehbein said.

Now it’s up to the folks at the agency to prove him right.