After review, VA scales back plans for contract cancellations

Veterans Affairs leaders on Monday scaled back massive cost-cutting plans within the department, announcing revised plans to still eliminate nearly 600 professional service contracts they insist will save $900 million without compromising any support for veterans.

The elimination of 585 “non-mission-critical or duplicative contracts” comes a week after department officials touted plans to terminate around 875 wasteful contracts with an estimated savings of $2 billion, only to halt the effort a day later because of public concerns about the potential impact of the cuts.

Previously, VA Secretary Doug Collins had labeled all of the targeted contracts as wasteful and superfluous. But after a week of further review, about 300 contracts were removed from the list of immediate cuts, and estimates of the savings were revised downward by more than $1 billion.

Officials still have not provided a public list of what contracts are being ended. In an announcement, VA officials said the deals to be terminated cover “administrative services that VA can perform on its own, such as staff mentoring, leadership coaching, preparation of meeting agendas and meeting minutes.”

Department leaders also said many of the newly canceled contracts were duplicative, allowing them to end one and keep another without disrupting any operations.

“VA is focused on becoming more efficient, responsive and accountable to the veterans, family members, caregivers and survivors we are charged with serving,” Collins said in a statement. “We are putting veterans first at VA. That means finding new and better ways to do our jobs and focus our resources.”

The original list of contracts to be cut included 14 business arrangements concerning veterans suicide prevention and 19 with veterans homelessness assistance, although not necessarily providing direct support to individual veterans. Other contracts provided indirect help with benefits processing and memorial services.

It was not clear if those kinds of contracts were among the roughly 300 saved in the one-week reprieve. A VA spokesman said in a statement that “there will be no negative impact to VA health care, benefits or beneficiaries,” a vow that was made after the earlier announcement.

A significant number of the contracts also involved businesses owned by service-connected disabled veterans, according to the initial list of contract cuts.

Collins has come under fierce criticism from congressional Democrats for his cost-cutting moves thus far. Several have accused him of betraying veterans by scaling back department resources, including agreeing to dismiss nearly 2,500 workers so far as part of White House moves to shrink the federal government.

Collins has defended the decisions, saying that savings can be redirected into better care and services for veterans and their families. The department is currently reviewing more than 90,000 contracts costing more than $67 billion.

Officials said VA career subject-matter expert employees were given the option to stop any of the latest round of cancellations “if they felt it would negatively impact health care, benefits or services.” However, sources within the department have called that claim into doubt, saying terminations were made with little to no consultation with key staffers.

The current department budget is more than $350 billion, with about 475,000 employees after the recent dismissals. Collins has not publicly stated how much either of those totals should be decreased, if at all.

Department officials said they anticipate additional savings to be announced as the contract audit continues in coming weeks. They also promised more specifics on how leadership plans to “put these resources to work” in increasing medical care and benefits processing.

Monday’s announcement came about 30 hours before President Donald Trump was scheduled to address Congress about his first six weeks in office, including a host of government efficiency and reform efforts that have brought condemnation from federal unions and Democratic lawmakers.