Consolidating Procurements of Medical Equipment Could Save Money

GAO conducted a review to determine whether medical equipment purchased locally by Department of Defense (DOD) and Veterans Administration (VA) medical facilities could have been more efficiently and economically procured in large quantities through consolidated procurement.

GAO found that: (1) DOD and VA facilities buy about 75 percent and 51 percent, respectively, of the value of their equipment requirements locally and procure the rest centrally; (2) DOD could have obtained price savings averaging 11 to 15 percent by centrally procuring certain items; (3) DOD achieved some savings by using indefinite-delivery type contracts to centrally procure some medical equipment; and (4) it could not determine whether VA might have achieved savings through consolidated procurement because of a lack of VA centralized procurement data. DOD and VA officials mentioned several factors that could limit the number of medical items that could be centrally procured, including: (1) physicians' preferences for certain brands of equipment; (2) the need for compatibility with existing equipment; (3) equipment maintenance by vendors; and (4) procurement timeliness. However, GAO found that: (1) while such problems might limit the centralized procurement of some items, they should not prevent DOD and VA from identifying additional equipment that could be procured more economically; (2) even where purchases of different equipment are judged to be appropriate, cost savings could still be achieved through consolidated procurement; and (3) while some delays might occur initially because of the time involved in awarding centralized contracts, close coordination between services and procuring activities should minimize delays. GAO noted that DOD is implementing a plan to increase the consolidated procurement of medical equipment.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Paul F. Math Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 512-4587