News & Events

VA Budget Expected to Grow Despite Lack of Effective Solutions

Despite the broad budget stagnation across Federal government agencies, the Department of Veterans Affairs (“VA”) continues to offer growth opportunities for the government contracting community, specifically those with IT qualifications.  While many government agencies are facing budget cuts, the President’s 2014 budget proposal requests $152.7 billion for the VA, a 10.2% increase over FY2013.  The proposal also increases the VA’s IT budget 19.1% from FY2013 to $3.9 billion.

The VA has been insulated from sequestration and broader budget cuts not only because of the political sensitivity of its mission, but also because of the increasing demands placed on the agency.  All Veterans from Afghanistan and Iraq are guaranteed VA-provided medical care five years from the date of their discharge.  At the same time, the government has made it easier for Veterans to receive compensation for certain illnesses like Post-Traumatic Stress Disorder.  These increased demands have led to a large backlog of benefit claims, with nearly 70% of Veteran benefit claims in backlog.

Currently, the Department of Defense (“DoD”) transfers 300,000 records of discharged soldiers to the VA each year, and roughly 40% of these records are in paper form.  In an attempt to remedy the enormous backlog of claims, the VA turned to IT and focused on pursuing a joint electronic health records (“EHR”) system with the DoD.  However, on February 5th, the DoD and VA announced that instead of building a joint EHR system, they would seek to improve the interoperability between their respective systems.

The VA’s EHR system, known as VISTA, continues to be plagued by delays and cost overruns.  Under fierce Congressional questioning on April 15th, VA Secretary Eric Shinseki reiterated his commitment to the VISTA system, testifying it would have initial operating capability by 2014 and full capability by 2017.  Despite these stated goals, they look increasingly unreachable considering that billions of dollars have been spent on the project since inception with little measureable progress.  As the VA continues to spend money on IT solutions with little in end results, contractors will have increasing opportunities to fill the gaps created by the ineffectiveness of the VA’s IT programs.