Panel questions VA outsourcing IT systems work to Navy

Top officials with the Veterans Affairs Department told a House panel on Thursday that they hired the Navy to develop computer systems last year because VA lacked the expertise.

The veterans agency tapped the Space and Naval Warfare (SPAWAR) Systems Center in Charleston, S.C., to develop systems because "unfortunately, systems development remains the largest IT challenge" at VA, Roger Baker, the department's chief information officer, told the VA Subcommittee on Economic Opportunity.

VA has one of the largest departmental information technology budgets in government. Its fiscal 2009 IT budget totaled $2.6 billion, and department officials have requested $3.3 billion for fiscal 2010.

One of the key projects VA hired SPAWAR to work on was a claims processing system for the post-Sept. 11 GI bill, which is scheduled to begin full operation in 2010. Stephen Warren, principal deputy assistant secretary for information and technology at Veterans Affairs, told the subcommittee the department tasked SPAWAR to develop the system because VA did not have the "qualified staff" to do the work.

The department tapped SPAWAR to do the work last fall under a broad interagency agreement signed in November 2007, and Baker told the panel that SPAWAR's project management skills exceeded those he had seen on any VA project since taking over as CIO in the spring.

In June, the VA inspector general released a report sharply criticizing the department's IT organization for relinquishing oversight of key projects to SPAWAR. Rep. Stephanie Herseth Sandlin, D-S.D., and chairwoman of the subcommittee, asked Baker if VA abdicated its oversight responsibility to SPAWAR.

Baker said he did not agree with many of the findings in the IG report, but said he viewed greater oversight of the agreement with SPAWAR an "imperative." He added he will improve the statements of work, include specific deliverables and create a depository for all documents related to SPAWAR work because the inspector general concluded VA did not have a full picture of what SPAWAR was doing for the department.

Rep. John Boozman, R-Ark., said he was concerned that VA did not have insight into key details of its agreement with SPAWAR, including hourly billing rates. Mark Krause, SPAWAR program manager for Veterans Affairs, said SPAWAR has hourly billing rates available on the work it does for the department, and he did not know why the IG did not look at the records before releasing its report.

Boozman suggested the IG at the Defense Department write a report on the work SPAWAR does for Veterans Affairs. Krause said the Defense Contract Audit Agency has constant oversight over SPAWAR and its contractors.

Despite the sharply worded IG report, Warren told the hearing that he considers SPAWAR a partner in the work to develop technology systems. Since SPAWAR is another government organization and not a commercial contractor, Baker said, "This makes a substantial difference. We trust each other."