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Office of Public and Intergovernmental Affairs

Remarks by Former Deputy Secretary W. Scott Gould

VA Supplier Relationship Transformation Webinar
February 25, 2011

Good morning! And welcome to VA’s second Supplier Relationship Transformation Webinar. Thank you for joining us here today as VA continues to reshape how we do business with the private sector. It’s a transformation that the Secretary and I fully support.

As you’ll hear throughout the day, VA is adopting cutting-edge improvements in the way we interact with suppliers. We’re pushing forward with improvements and innovations, consulting with our suppliers and stakeholders, and changing the way we do business.

In fact, we’re looking at the supplier relationship in bold, new ways, moving from the old idea that our relationship must be adversarial and turning toward a more collaborative approach that is good for both of us.

There’s a lot at stake for VA in getting this right. We are dedicated to providing the best possible care and service to America’s Veterans, and that means negotiating the best value for our purchases, finding innovative solutions, and buying goods and services without waste.

There’s a lot at stake for our suppliers, too. VA is the second-largest agency in the federal government. In fiscal year 2012, we are budgeted to spend $15 billion for services and supplies.

To achieve “win-win” results for VA and its suppliers, it’s critical that we strengthen and reinforce our alliance. As many of you know, I’ve been on the sell side of this relationship before, having worked for many years in the private sector. So I understand how extraordinarily challenging and frustrating it can be to divine what government requirements might be.

That must change. We must think and act together in a different way. At VA, we realize this, and we’re doing something about it.

For much of the last year, our VA staff members have performed extensive research to determine what our suppliers think about their relationship with VA. For example, we:

  • Held five supplier forums to discuss what does and does not work with our processes;

  • Gave three advanced planning briefings to industry;

  • Held three industry days;

  • Conducted surveys to measure internal customer satisfaction and supplier perception.

  • We asked you what the problems were and you certainly let us know. And that’s a good thing! You told us that:

  • You’d like a single point of contact who responds to questions quickly and accurately. Too often, VA contracting officers don’t respond to voicemail messages in a timely way. And that means our suppliers can’t work with maximum speed and efficiency.

  • Our contracting workforce needs training on policies, legislation, processes, prioritization, and scenarios.

  • And we need to be faster and more efficient throughout the acquisition process.

We recognize the pressing need to think and act in a different way. That’s why our goal is to improve our customer service; communicate in a clear and timely manner; strengthen and reinforce our alliance with suppliers; establish a more efficient and organized acquisition process; and develop a team of VA contracting professionals committed to excellence.

Already, VA is making great progress in improving the way we work with suppliers. It’s paying off for us and for you.

To ensure that we communicate more clearly and improve transparency, we are consulting more frequently with industry using more draft RFPs and holding more pre- and post-award conferences. We are moving to a performance-based approach for contracts so that VA gets out of the business of writing requirements that are too specific and artificially restrictive.

I’m also pleased to report that in fiscal year 2010:

  • VA spent nearly 38 cents of every reported procurement dollar with small businesses;

  • We kept our late payment cost per million to just $35—a clear sign that we pay our bills quickly.

  • Each VA contracting organization is now developing an action plan to address the concerns expressed in our surveys and forums. You’ll hear more about our action plan goals later in this webinar.

That’s just the beginning. We also developed several programs to award contracts to suppliers who have cutting-edge ideas for solving some of VA’s most pressing problems.

  • Last year, we launched VA’s Greatest Challenges Program. This program called on our suppliers to suggest ways that VA could address the challenges it faces as it transforms into a high-performing organization better aligned to meet the needs of our Veterans.

  • Recently, we merged the Greatest Challenges program with the VA Innovation Initiative, known as “VAi2.” This initiative gives VA a structured way to identify, evaluate, and fund promising new solutions. Under the VAi2 initiative, we opened an Industry Innovation Competition last year. So far, VA has awarded four contracts with total values in excess of $10.3 million and another four are close to award with values of approximately $11 million.

On February 11, we launched a second Industry Innovation Competition worth up to $100 million in contract awards. We’re looking for innovative technology proposals to improve the way we serve and care for nation’s Veterans. We want to hear from you if you have creative solutions for improving access, enhancing quality, driving down costs, and increasing customer satisfaction among our Veterans. Information on VAi2 is available at

In more good news for our suppliers, this spring we will award up to 15 prime contracts for our $12 billion, five-year program known as Transformation Twenty-One Total Technology, or T4. The program is designed to meet the full range of VA’s long-term technology needs and will give VA access to the best of industry’s capabilities without extended acquisition lead time.

At VA, our goal is to reduce the frustration, cut the red tape, and leverage your industry knowledge and expertise. We’re out to improve the acquisition process from top to bottom, while still abiding by the rules and regulations that are on the books now. That’s our near-term goal.

For the future, keep in mind that President Obama last month issued a new executive order and several other directives to reduce the regulations that now inhibit the private sector from doing business with the Federal government.

Together, these changes signal a transformation in the way we will be doing business with our suppliers.

That’s good news for your company and your bottom line. These improvements mean that it will cost you less to compete for work. You’ll have better insight into whether or not you should bid on a project. And when you win business with VA, you’ll have a reliable partner that comes through on cost, schedule and quality.

An improved supplier relationship is good news for VA, too. VA will obtain better products and services at lower costs. We’ll spend less money on bureaucratic overhead and we can structure our contracts to save money and benefit from the latest industry advances. Most importantly, we’ll obtain a better value for the taxpayer’s money.

But the biggest winners will be the people who are our customers, and ultimately, your customers: America’s Veterans. Because when we improve our relationship, reduce costs, and get better products and services to Veterans in a more timely manner, we are, together, improving the quality of their lives. And that matters.

  • It matters to a grandfather, sick in the hospital, who will heal faster because VA learned about a new, state-of-the-art medical device—thanks to the expertise of one of our suppliers.

  • It matters to the 14,000 Veterans suffering from illnesses related to Agent Orange who just received their new benefits months faster than normal—thanks to a vendor who cooperated closely with us to quickly develop a more efficient claims processing solution.

  • And it matters to an Iraq War Vet who might one day recover more quickly, thanks to creative solutions being proposed today by vendors—such as a new mobile device we’re testing that speeds data to doctors treating heart attack victims.

For their sake, we must get this right. For their sake, we must develop a strategic alliance to provide products and services that make a difference.

As President Obama said in his recent State of the Union address:

  • “We must always remember that the Americans who have borne the greatest burden in this struggle are the men and women who serve our country. Let us speak with one voice in reaffirming that our nation is united in support of our troops and their families. Let us serve them as well as they’ve served us by providing them with the care and benefits that they have earned.”

All of you participating in this webinar today, and all of VA’s suppliers, play a key role in serving America’s heroes and providing them with the best possible care and service.

As we continue to make bold changes and transform the way we do business, I ask our suppliers to offer their ongoing feedback and perspective to VA. We want to know what we’re doing right and what we’re doing wrong. We will send out our next supplier participation survey during the first week of April, and I urge you to respond. Your input will be essential.

The Secretary is fully committed—and I am fully committed—to improving the way VA and its suppliers work together. Improved collaboration is good for our suppliers, it’s good for VA, and it’s good for the courageous Veterans who served and sacrificed for our nation.

As Alan Greenspan said,

  • “I have found no greater satisfaction than achieving success through honest dealing and strict adherence to the view that, for you to gain, those you deal with should gain as well.”

Ladies and Gentlemen, I wish you success in your businesses, and I hope you enjoy today’s webinar.

Closing Remarks
In closing, I would like to thank all of you who joined us here in Washington, D.C., today, and all of you across the country who joined us online, as well. As you heard throughout this webinar, VA is dedicated to strengthening our relationship with suppliers and stakeholders. It’s part of VA’s overarching transformation effort directed by President Obama and led by Secretary Shinseki. At VA, we recognize that our supplier relationship is mission critical. That’s why we’re determined to build a more progressive, collaborative, and productive partnership.

This transformation in our acquisitions process will lead us to more innovative solutions and help us obtain the best value for our purchases. At the same time, it should dramatically reduce the red tape and frustration you face and improve your bottom line.

In the end, of course, the biggest winners will be America’s Veterans, their families, and their survivors, who will benefit from the best possible products and services.

Those of you participating in today’s webinar are key to the continued success of VA’s acquisition transformation initiative. Over the past year, your insights and candid assessments were invaluable. You offered your ideas for:

Improving the structure of our contracts;
  • Fixing our customer service problems; and

  • Making our acquisition process faster and more efficient.

As you heard throughout today’s webinar, we are listening. We’re making bold changes to improve our customer service, establish a more efficient and organized acquisition process, and enhance our team of VA contracting professionals.

We’re also hiring new acquisition professionals. If you are working in the private sector and have great ideas for improving government, we want you on our team. Your experience in industry can bring us valuable insight. I encourage you to apply for a position with VA’s Office of Acquisition, Logistics and Construction Team by visiting USAJOBS.COM. We now have Direct Hire Authority and can bring talented professionals on board quickly and efficiently.

As VA continues to make innovative changes to our acquisitions process, we will seek your feedback throughout the coming year. We plan to hold more supplier webinars this summer and winter, and will schedule supplier forums in the spring and fall. We will conduct customer satisfaction surveys, provide advanced program briefings to industry, and hold pre-proposal conferences. We also plan to periodically reconstitute this group over the web to keep the exchange of information flowing.

Ladies and Gentlemen, we are serious about strengthening our supplier relationship. And we are heeding President Barack Obama’s charge to transform this agency into a more open, transparent, and accountable organization. That’s why we will continue to do what it takes to keep you informed, improve the way we do business with you, and achieve win-win results.

I want to remind you that VA has procurement opportunities open across the country. I encourage you to review all the VA opportunities at FedBiz Thank you very much for participating in this morning’s webinar and for sharing your input throughout this past year. I look forward to more productive sessions like this in the future.