Summary of Fiscal Year 2025 Preaward Audits for Healthcare Resource Proposals from Affiliates

As part of ongoing work to protect taxpayer dollars, the VA Office of Inspector General (OIG) completed 27 preaward audits of sole‑source healthcare proposals from VA‑affiliated institutions in fiscal year (FY) 2025. These reviews help VA contracting officers negotiate fair and reasonable prices before awarding healthcare resource contracts through means other than full-and-open competition—an authority granted under 38 U.S.C. § 8153. VA policy requires OIG review for proposals valued at $750,000 or more to ensure the best value to the government.

Across the 27 audits, the OIG examined both full‑time‑equivalent (hourly) pricing and per‑procedure pricing. For the 22 proposals with hourly pricing, auditors identified unsupported costs—most often, provider salaries—resulting in higher‑than‑supported proposed rates. The OIG recommended seeking lower prices for all 22 proposals. For the five proposals with per‑procedure pricing, the OIG found offered rates exceeded properly calculated Medicare benchmarks, and the OIG similarly recommended lower prices.

In total, the OIG identified over $183.9 million in potential cost savings from an estimated $488.4 million in proposed contract value across the 27 proposals audited. As of June 2026, VA contracting officers had awarded 21 contracts and sustained about $28.1 million in savings based in part on these audits. One proposal remained under negotiation, and five solicitations were canceled.

The OIG also reviewed potential conflicts of interest for VA staff who held affiliate faculty appointments when they also oversaw related contract performance. Potential conflicts were identified in 17 proposals, and in each case, the OIG advised seeking guidance from VA’s Office of General Counsel to ensure procurement integrity.

This summary report contains no new recommendations, as it reflects audits already provided to VA contracting officials. It is published to promote transparency, as individual preaward audit reports are not released due to sensitive personal information.