VA drops supply chain management IT system, hunts for new solution

The Department of Veterans Affairs said Tuesday that it will stop using a supply chain management IT system after Congress and the VA’s Office of Inspector General questioned the system’s effectiveness and cost.

The agency will end use of the Defense Medical Logistics Standard Support (DMLSS) system, which is a local server-based application that supports internal medical logistics at military hospitals or clinics, including in war zones.

In procurement documents on SAM.gov, the department said that it will now seek a new supply chain solution that must operate in the VA’s technical production environment, either in the VA cloud or in another FedRAMP certified cloud.

 “As the largest integrated healthcare system in the country, our supply chain logistics solution must meet the needs of the 1,298 medical facilities in our network and the millions of veterans that we serve—and this transition will help us do exactly that,” said Michael D. Parrish, VA’s chief acquisition officer.

In February under pressure from lawmakers, the VA said it would take a second look at the DMLSS contract to determine if it was the right fit for the agency, and said it was considering other options. 

Pressure to drop the DMLSS contract has been building since the VA’s Office of Inspector General (OIG) released a report in November 2021 that found failures in VA’s pilot project to deploy the DMLSS system at the Captain James A. Lovell Federal Health Care Center in North Chicago, Illinois.

The OIG report found the DMLSS system did not meet 44% of the high-priority business requirements identified by Lovell hospital staff as essential to their  operations.

To create a supply chain infrastructure that improves the veteran experience, VA told reporters Tuesday that it will cancel future DMLSS deployments. The agency said it will work with the Defense Health Agency (DHA) to modify the current agreement and allow the VA to continue to fund joint operations at Lovell hospital.

The VA said it will establish the new Office of Enterprise Supply Chain Modernization in the coming months to oversee its supply chain transformation effort. The agency expects a new supply chain logistics solution contract by 2023.