D.5 DIRECTIVE 1761 SUPPLY CHAIN MANAGEMENT OPERATIONS.pdf

T-1

Department of Veterans Affairs VHA DIRECTIVE 1761 Veterans Health Administration Transmittal Sheet Washington, DC 20420 December 30, 2020

SUPPLY CHAIN MANAGEMENT OPERATIONS

1. REASON FOR ISSUE: This Veterans Health Administration (VHA) directive provides policy, mandatory standards, and operational requirements for implementing an effective VHA Supply Chain Management (SCM) program at medical facilities within the Department of Veterans Affairs (VA).

2. SUMMARY OF MAJOR CHANGES: This revised directive includes the following major changes:

a. Identifies additional roles and responsibilities of the VHA Procurement and Logistics Office (P&LO) to support standardization efforts at the VA medical facility level for non-expendable equipment through the establishment of the National Equipment Catalog (NEC).

b. Requires clinical program offices to support national standardization efforts through the identification of subject matter experts (SME) to assist in the development of contract requirements.

c. Requires Veterans Integrated Service Networks (VISN) to establish a VISN Equipment Committee and implement the use of the Strategic Equipment Planning Guide (SEPG) and Enterprise Equipment Request (EER) portals.

d. Requires VA medical facilities to assign equipment request review responsibilities to a VA medical facility committee and implement the use of the Strategic Equipment Planning Guide (SEPG) and Enterprise Equipment Request (EER) portals.

e. Requires VA medical facilities to assign clinical product review responsibilities to a formal VA medical facility committee and implement the use of the Clinical Product Review Committee (CPRC) portal.

f. Mandates the use of the NEC and certain procurement instruments, including Medical/Surgical Prime Vendor (MSPV) contracts. See Appendix A.

g. Requires the annual inventory of non-expendable accountable equipment and sensitive items in accordance with VA Handbook 7002, Logistics Management Procedures, dated January 8, 2020.

h. Updates definitions. See paragraph 3.

i. Requires implementation of national supply chain organization structure.

j. Requires monitoring and adherence to national supply chain performance monitors and measures.

December 30, 2020 VHA DIRECTIVE 1761

T-2

k. Clarifies storage requirements for Prosthetic inventory items and durable medical equipment and requires VA medical facility funding when establishing initial implantable item inventories.

l. Clarifies allowable inventory models for use in the Generic Inventory Package (GIP) for use with Point-Of-Use (POU), Real Time Locator System (RTLS) and office supply scenarios.

m. Clarifies instructions for performing required physical inventory counts and when a report of survey is required.

n. Eliminates the Reports Review Schedule appendix.

3. RESPONSIBLE OFFICE: The VHA Procurement and Logistics Office (P&LO, 19PLO), under direction from the Assistant Under Secretary for Health for Support, is responsible for the content of this directive. Questions may be addressed to vhacopaq@va.gov.

4. RELATED ISSUES: None.

5. RESCISSIONS: VHA Directive 1761(2), Supply Chain Inventory Management, dated October 24, 2016; Deputy Under Secretary for Health for Operations and Management (DUSHOM) Memorandum, Equipment Accountability, dated September 27, 2007;

Special Assistant to the DUSHOM for Supply Chain Memorandum, Mandatory Use of the Strategic Equipment Planning Guide and Enterprise Equipment Request Portals, dated July 18, 2016; DUSHOM Memorandum, Establishment of Network Commodity Standardization Committees, dated January 11, 2011; DUSHOM Memorandum, Correction of Deficiencies Noted in GAO Report 11-391 – Weaknesses in policies and Oversight Governing Medical Supplies and Equipment Pose Risks to Veterans Safety, dated October 12, 2011; and ADUSHOM Memorandum, Supply Chain Performance Improvement Through Increased Use of the Medical Surgical Prime Vendor Program, dated June 11, 2015, are rescinded.

6. IMPLEMENTATION: The following requirements and supply performance measures are effective April 1, 2021:

a. Days of stock on hand, percentage inactive more than 90 days, and percentage long supply for all clinical and non-clinical inventories, including Medical Surgical Prime Vendor items

b. ABC cycle inventories for primary inventory points with secondary locations.

c. Equipment Inventory List requirements. NOTE: VHA P&LO is conscious of the current priorities surrounding COVID-19 and understands the change in focus and priorities at the operational level. The effective date of April 1, 2021 reduces some of the administrative burden for facilities while maintaining supply discipline. Questions regarding the requirements and supply performance measures should be directed to the VHA Logistics Operations Center at vhalogopscenter@va.gov.

mailto:vhacopaq@va.gov mailto:vhalogopscenter@va.gov

T-3

7. RECERTIFICATION: This VHA directive is scheduled for recertification on or before the last working day of December 31, 2025. This VHA directive will continue to serve as national VHA policy until it is recertified or rescinded.

BY DIRECTION OF THE OFFICE OF

THE UNDER SECRETARY FOR HEALTH:

/s/ Richard A. Stone, M.D.

Executive in Charge

NOTE: All references herein to VA and VHA documents incorporate by reference subsequent VA and VHA documents on the same or similar subject matter.

DISTRIBUTION: Emailed to the VHA Publications Distribution List on December 30, 2020.

i

CONTENTS

SUPPLY CHAIN MANAGEMENT OPERATIONS

1. PURPOSE 1

2. BACKGROUND

3. DEFINITIONS

4. POLICY

5. RESPONSIBILITIES

6. TRAINING

7. RECORDS MANAGEMENT

8. REFERENCES

APPENDIX A

SUPPLY CHAIN PROGRAM MANAGEMENT ............................................................. A-1

APPENDIX B

REQUIREMENTS FOR INVENTORY MANAGEMENT ............................................... B-1

APPENDIX C

FUNCTIONAL AREAS REQUIRING INVENTORY MANAGEMENT ........................... C-1

APPENDIX D

REQUIREMENTS FOR STOCK LEVELS ................................................................... D-1

APPENDIX E

REQUIREMENTS FOR EXPENDABLE SUPPLY INVENTORY ACCURACY AND

INVENTORY PERFORMANCE MANAGEMENT ......................................................... E-1

APPENDIX F

CLEAN/STERILE INVENTORY POINT STOREROOMS ............................................. F-1

APPENDIX G

ii

REQUIREMENTS FOR ENGINEERING AND ENVIRONMENTAL INVENTORY POINT

STOREROOMS .......................................................................................................... G-1

APPENDIX H

REQUIREMENTS FOR PHARMACY .......................................................................... H-1

APPENDIX I

REQUIREMENTS FOR DISTRIBUTION FROM A CENTRAL STOREROOM .............. I-1

APPENDIX J

REQUIREMENTS FOR POINT-OF-USE ..................................................................... J-1

SUPPLY CHAIN MANAGEMENT OPERATIONS

1. PURPOSE

This Veterans Health Administration (VHA) directive provides policy, mandatory standards, and operational requirements for implementing an effective Supply Chain Management (SCM) program at Department of Veterans Affairs (VA) medical facilities, Community Based Outpatient Clinics (CBOCs)/Outpatient Clinics (OPCs), and Consolidated Mail Outpatient Pharmacies (CMOPs). AUTHORITY: Title 38 United States Code (U.S.C.) § 8121, 8125.

2. BACKGROUND

a. The Generic Inventory Package (GIP) is the current software being utilized for inventory management of stock. The Automated Engineering Management System/Medical Equipment Reporting System (AEMS/MERS) and Maximo are the software systems used to manage non-expendable equipment from cradle to grave.

Above Periodic Automatic Replacement (APAR) is a Veterans Information Systems and Technology Architecture (VistA) overlay designed to facilitate the operation of GIP and AEMS/MERS in a Windows-based environment and enhance reporting capabilities.

b. A transformation period is underway in VHA as the agency undertakes the modernization of its supply chain and supply systems through the implementation of the Defense Medical Logistics Standard Support (DMLSS) system and other initiatives.

VHA’s goal is to become a lean, efficient supply chain that is recognized by its peers as being among the best in health care. This modernization effort will support the delivery of exceptional patient outcomes that meet or exceed the expectations of our Veterans, their families, those who care for them, and the nation’s taxpayers. The effort will focus on improving data and informatics; developing consistent capabilities through improved training, recruiting, and standardized positions and organization structures;

implementing and continuing the expansion of a clinically driven strategic sourcing organization; and creating a culture of continuous improvement. As VHA implements new supply chain systems supporting this effort, the new systems are expected to draw historical and operational data from existing VA automated systems.

c. On March 27, 2019, the Secretary of Veterans Affairs signed an Executive Decision Memorandum committing VA to adopt and implement the Department of Defense (DoD) DMLSS application. This application will provide integrated and comprehensive supply chain, pharmaceutical, equipment and facilities management capabilities.

d. Details provided in this directive may at times be specific to current software systems. Amendments to this directive will be issued to address any replacement software systems. Updated information will be available at:

https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/default.aspx. NOTE: This is an internal VA website that is not available to the public.

https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/default.aspx

3. DEFINITIONS

a. Above Periodic Automatic Replacement. APAR is a VistA-integrated software module designed to streamline workflow processes and improve reporting for both expendable and non-expendable inventory management.

b. Automated Engineering Management System/Medical Equipment Reporting System. Automated Engineering Management System/Medical Equipment Reporting System (AEMS/MERS) is a software package shared between the Office of Acquisition and Logistics (OAL) and Engineering/Facilities Management Service and used for the management of non-expendable equipment from cradle to grave. It includes functionality for equipment management, work orders, preventative maintenance, project planning and project tracking.

c. Breakout Room. A breakout room is a work area where items are removed from their original shipping containers, inspected, and moved into the central supply storage room in order to keep dust and debris out of central supply and in the breakout room.

d. Central Storeroom. A central storeroom is the area which stores and distributes clean/sterile medical supplies and equipment for use throughout the VA medical facility.

e. Clean/Sterile Storeroom. A clean/sterile storeroom is a primary or secondary inventory point location where clinical items are stored to protect them from accidental contamination.

f. Clinical Items. Clinical items are non-durable disposable health care materials ordered or prescribed, which are primarily and customarily used to serve a medical purpose. Within VHA, items with the following Federal Supply Classification (FSC) codes are identified as meeting this definition.

(1) 6508 Medicated Cosmetics and Toiletries.

(2) 6510 Surgical Dressing Materials.

(3) 6515 Medical and Surgical Instruments, Equipment, and Supplies.

(4) 6520 Dental Instruments, Equipment, and Supplies.

(5) 6525 X-ray Equipment and Supplies - Medical, Dental, and Veterinary.

(6) 6530 Hospital Furniture, Equipment, Utensils, and Supplies.

(7) 6532 Hospital and Surgical Clothing and Related Special Purpose Items.

(8) 6540 Ophthalmic Instruments, Equipment, and Supplies.

(9) 6545 Replenishable Field Medical Sets, Kits, and Outfits.

(10) 6550 Invitro Diagnostic Substances, Reagents, Test Kits, and Sets.

(11) 6640 Laboratory Equipment and Supplies.

g. Consignment Agreement. Consistent with subsection 816.770 of the VA Acquisition Regulation (VAAR), a consignment agreement is defined as a delivery method for a specified period of time in which the contractor provides an item/s for Government use and the contractor receives reimbursement only if and when the item is used by the Government. Unused items are returned to the vendor at the end of the effective period of the agreement without reimbursement or other expense to the Government.

h. Corrugated. Corrugated is packaging made of paper or plastic that has an arched layer, called “fluting,” between smooth sheets, called “liners.”

i. Defense Medical Logistics Standard Support. DMLSS is a DoD medical logistics asset management system. It is capable of managing medical logistics physical assets, supply inventories, financial components, and related management processes.

j. Direct Patient Care. Direct patient care is hands-on, face-to-face contact with patients using expendable clinical items and reusable medical equipment (RME) for the purpose of diagnosis, treatment, and monitoring.

k. Enterprise Equipment Requests. The Enterprise Equipment Requests (EER) is a VHA-wide equipment request portal for use in VA medical facilities to request, review and approve new equipment at VA medical facilities. The EER includes the information and supporting documentation, including the contracting paperwork, the VA medical facility committees responsible for equipment request reviews and approvals need to make informed decisions for local approval and investment of capital equipment funds.

l. Environment of Care. Environment of care refers to management plans, policies, procedures and controls that are implemented to maintain a safe and healthy environment and facility for patients, staff, and visitors.

m. Expendable Clinical Supplies. Expendable clinical supplies are supplies used to treat patients that (1) have a life expectancy when put to use of less than 2 years; (2) when put to use, becomes an integral part of another item, thereby losing its identity, or

(3) are purchased for permanent release to beneficiaries. NOTE: The Prosthetics and Sensory Aids Service (PSAS) usually orders items for beneficiaries.

n. Generic Inventory Package. The GIP portion of Integrated Funds Distribution, Control Point Activity, Accounting and Procurement (IFCAP) is used to manage the receipt, distribution, and maintenance of supplies utilized throughout the VA medical facility.

o. Integrated Funds Distribution, Control Point Activity, Accounting and Procurement. IFCAP is a software system that provides information on supplies, equipment, vendors, procurement history, and control point activity. It automates certain functions in SCM, Fiscal, and in all the services that request supplies and services on VA Form 2237.

p. Inventory Point Identifier. The Inventory Point Identifier (IE) is an internal system identifier for the inventory point that is automatically assigned when the inventory point is created

q. Item Master File. The Item Master File (IMF) is a file within the VistA IFCAP software program utilized for the storage of item information to include item description, mandatory source, vendor, unit price and packaging, and product and manufacturer information. This file links with the request and procurement files and provides for the extraction of item procurement history.

r. Maximo. Maximo is a web-based, commercial software package that provides life cycle management support for non-expendable equipment. Maximo was implemented at several VA medical facilities as a potential replacement to AEMS/MERS.

s. National Equipment Catalog. The National Equipment Catalog (NEC) serves as an acquisition tool, utilizing a national, clinically vetted list of commonly purchased medical equipment. It is maintained based on both clinical input as well as support service stakeholders’ input.

t. Non-Expendable Equipment. Non-expendable (NX) equipment is equipment that has been classified by the VA OAL, Operations and Analysis Branch (OAB), as non-expendable personal property and has been assigned a Category Stock Number (CSN).

In accordance with VA Handbook 7002, Logistics Management Procedures, dated January 8, 2020, Part 3, Section 2.c(2), when classifying personal property as non-expendable, OAB considers the following criteria: (1) normally has, but is not limited to, an acquisition cost of $300 or more; (2) has a life expectancy of 2 years or more; and/or

(3) is of a sensitive nature which requires accountability/control regardless of cost, life expectancy, or maintenance requirements. Property classified as NX equipment will be added to the asset management system and assigned a unique asset number for asset tracking purposes. Asset numbers will not be reused after final disposition of an asset.

u. Ordering Officer Delegation. The Ordering Officer Delegation (OOD) is a written delegation from a warranted Contracting Officer that allows a non-warranted individual to place funded delivery/task orders against a specific indefinite delivery contract within the limitations of the contract and the ordering officer delegation memorandum.

v. Patient Safety. Patient safety is ensuring freedom from accidental or inadvertent injury during health care processes.

w. Periodic Automatic Replacement Level Inventory System. A periodic automatic replacement (PAR) level inventory system determines the minimum level of inventory necessary to be on hand for a specific period and requires automatic replenishment if the level of inventory falls below that level.

x. Point-of-Use Solution(s). Point-of-Use (POU) solution(s) is the employment of a combination of automated supply stations (POU equipment) and POU systems that streamline the supply chain for timely delivery of required supplies to the point where those supplies are consumed.

y. Personal Protective Equipment. Personal Protective Equipment (PPE) is protective equipment, such as approved head and hair coverings, face shields, safety glasses/goggles, long cuffed rubber/vinyl decontamination gloves, impervious gowns, and shoe covers, that is utilized to protect the employee from the environment.

z. Reusable Medical Equipment. RME is medical equipment designed by the manufacturer to be reused with multiple patients. Not all RME is considered non-expendable equipment by VA standards for funding and tracking in the VA asset management system.

aa. Reusable Medical Instruments. Reusable medical instruments (RMI) refers to medical instrumentation designed by the manufacturer to be reused with multiple patients after being disinfected and/or sterilized according to manufacturer’s instructions.

bb. Real Time Location System. A Real Time Location System (RTLS) gathers and maintains location-based (and sometimes status) information related to components of a larger system (e.g., health care-related assets, supplies, people).

cc. Safety Data Sheet. The Safety Data Sheet (SDS), formerly known as Material Safety Data Sheet (MSDS), is a document containing information on hazardous materials from the manufacturer to the employer and user. A SDS includes information such as: product and manufacturer identification, hazard(s) identification, composition/information on ingredients, first-aid measures, fire-fighting measures, accidental release measures, handling and storage, exposure controls/personal protection, physical and chemical properties, stability and reactivity, toxicological information, ecological information, disposal considerations, transport information, and regulatory information.

dd. Standard Product Lists. Standard Product Lists (SPL) are lists that identify all medical supplies and equipment meeting the following two criteria: (1) the cognizant VA medical facility committee responsible for clinical product and/or equipment reviews and approvals (see paragraphs 1.j. and 1.l. of Appendix A) has determined that standardizing the subject item of medical supply or equipment used by the VA medical facility is necessary to ensure and enhance patient safety and the quality of care to Veteran patients; and (2) that item of medical supply or equipment is currently available through an existing contract. SPLs are specific to and maintained by each individual VA medical facility. At a minimum, the lists will include the product name/description, size (if applicable), vendor, and make/model/part number.

ee. Strategic Equipment Planning Guide. Strategic Equipment Planning Guide (SEPG) is a VA web-based data entry and capture tool that is the first step in the equipment life cycle management process. SEPG is used to identify additional or replacement equipment needs for Service-level rolling 5-year equipment plans.

ff. Supply Chain Management. SCM is the integration and alignment of people, processes, and systems across the supply chain to manage all product/service planning, sourcing, purchasing, delivering, receiving, and disposal activities.

gg. Total Supply Support. Total Supply Support (TSS) is management methods, practices, and procedures employed in determining goods and services requirements, and their funding acquisition, receipt, storage, issuance, and final disposition.

hh. VHA Standardization Program. The VHA Standardization Program is VHA’s clinically driven enterprise-wide effort to identify and gather facility-level needs for medical supplies and equipment and determine whether standardization of specific medical supplies and/or equipment used by a given facility is necessary to ensure and enhance patient safety and the quality of care to Veteran patients.

4. POLICY

It is VHA policy that VA medical facilities establish, operate, and maintain a SCM program that is effective, cost efficient, transparent, and responsive to customer requirements, and to continually identify ways to improve SCM performance in support of high-quality Veteran care.

5. RESPONSIBILITIES

a. Under Secretary for Health. The Under Secretary for Health is responsible for ensuring overall VHA compliance with this directive.

b. Assistant Under Secretary for Health for Operations. The Assistant Under Secretary for Health for Operations is responsible for:

(1) Ensuring communication of the contents of this directive to each of the Veterans Integrated Service Networks (VISNs).

(2) Assisting VISN Directors to resolve implementation and compliance challenges in all VA medical facilities within that VISN.

(3) Providing oversight of VISNs to assure compliance with this directive, relevant standards and applicable regulations.

c. Assistant Under Secretary for Health for Support. The Assistant Under Secretary for Health for Support is responsible for:

(1) Overseeing the VHA Procurement and Logistics Office, including the Supply Chain Program Office.

(2) Ensuring resources are adequate to implement the VHA Supply Chain Management program.

d. Executive Director, VHA Procurement and Logistics Office. The Executive Director, VHA P&LO is responsible for:

(1) Maintaining a SCM program within VHA by establishing policy and procedures for inventory and asset management, collecting and managing data, performing quality assurance, implementing tools for corrective action, and providing staff opportunities for education, training, and certification programs.

(2) Serving as a SCM liaison between VISNs, VHA Central Office, and the Office of Acquisition Logistics and Construction (OAL&C).

(3) Enabling a clinically driven operating model that allows VHA to better assess equipment and supply needs, through streamlined enterprise acquisition. This clinically driven operating model provides clinicians with the supplies and equipment they need to improve patient care and safety protocols, and to promote patient safety.

(4) Guiding standardization efforts by establishing program teams to manage the mandatory expendable supply and non-expendable equipment to sustain the VHA Standardization Program. Such standardization efforts also include, when appropriate, establishing national contracts for standardized commodities and equipment through the clinically driven operating model, enhancing patient safety and eliminating unwarranted variances in such commodities and equipment.

(a) The Medical Supply Program Management Office (PMO) manages the Medical Surgical Prime Vendor (MSPV) program, which is a national program providing a customized distribution system to meet or exceed facility requirements through an efficient, cost-effective, just-in-time distribution catalog ordering process.

(b) The Equipment Life Cycle Management (ELCM) PMO manages the NEC to support clinically driven sourcing and patient safety. Where necessary, the ELCM PMO reviews High-Cost High-Tech (HCHT) medical equipment applications in coordination with the Office of Healthcare Technology Management.

(5) Developing and managing the strategic equipment planning tool and equipment request tool and process (i.e., SEPG, EER, or equivalent approved platform or tool).

(6) Establishing processes and tools to enable VA medical facility committees to develop the facility’s requirements for medical equipment and supplies within the scope of this directive, develop and document the facility’s justification for selecting an item as facility standard, where appropriate, and develop the facility’s medical supply and equipment SPL.

(7) Collecting and analyzing VA medical facility medical supply and equipment SPL and, where appropriate, offering recommendations regarding whether establishing national contracts for the items identified would be appropriate.

(8) Analyzing VA medical facility equipment needs and standardization modalities to create requirements for specific technical equipment and parts to add to the NEC that will satisfy VA needs for additional units or replacements.

(9) Approving waiver requests regarding GIP or the VHA-approved inventory system management system received from VISN Directors. See paragraph 4.e. in Appendix B for waiver information.

(10) Working with VISNs and facilities to provide strategic guidance in the management of the VHA High-Tech Medical Equipment (HTME) portfolio through the ELCM PMO in an effort to support the VHA equipment standardization program.

(11) Validating utilization of clinically driven and strategically sourced national contracts coordinated or processed by the VHA P&LO.

(12) Managing and maintaining the Vendor File as stated in paragraph 3 of Appendix B.

(13) Serving as a Utilization Officer, in accordance with VA Directive 7348, Utilization and Disposal of Personal Property, dated January 8, 2020. See paragraph 1.e.(2) in Appendix A for additional performance measure information.

e. Directors, VHA Clinical Program Offices. Directors of VHA Clinical Program Offices are responsible for:

(1) Identifying clinical or technical subject matter experts (SME) with the relevant medical or technical experience to conduct analysis or make decisions about the item(s) for which the SME is assigned as a participant of the Integrated Product Team (IPT).

Directors will coordinate with appropriate VISN clinical leadership and VHA P&LO to identify and appoint five SMEs from across VHA for each national requirement effort upon request from the VHA P&LO to assist in the development of acquisition requirements for national standardization of contracts.

(2) Appointing and ensuring the IPT members are permitted time away from primary duties to support the IPT in accordance with the Project Charter. Requested support includes: in-person training opportunities and technical evaluation of items and ongoing review, and investigation and recommendation of items. SMEs will be appointed for a minimum of 18 months or until an award of national contract or termination of IPT efforts. This will include release from clinical duties for twice monthly virtual meetings or face-to-face meetings (e.g., industry days, technical evaluations, lock-down meetings).

(3) Providing single and back-up points of contact to VHA P&LO to coordinate SMEs identification.

(4) Annually reviewing clinical needs to identify expendable supplies and non-expendable equipment requirements for consideration for national contracting efforts to

VHA P&LO.

f. Director, VHA Prosthetics and Sensory Aids Service. The Director, VHA PSAS is responsible for:

(1) Complying with SCM policies and procedures identified within this directive to effectively manage PSAS items.

(2) Sharing PSAS policy and procedures with VHA P&LO that are applicable to SCM functions and identifying ways to consolidate where possible.

(3) Collaborating with SCM to eliminate redundancies in contract requirements.

g. Veterans Integrated Services Network Director. The VISN Director is responsible for:

(1) Maintaining a VISN-level SCM program that effectively meets VHA policy, reporting, and operational requirements.

(2) Ensuring that all VA medical facilities within the VISN comply with this directive and informing leadership when barriers to compliance are identified.

(3) Ensuring that VHA SCM performance standards are met by VISN medical facilities.

(4) Establishing a VISN Equipment Committee. See Appendix A, paragraph 1.k. for committee composition and operations.

(5) Ensuring the purchase of clinical items using a government purchase card is limited to staff in SCM, the Network Contracting Office (NCO), Pharmacy, and PSAS.

(6) Reviewing and submitting the VISN-aggregated equipment modality listing as requested to VHA19PLOLogisticsELCMO@va.gov in support of the VHA Standardization Program.

(7) Sending waiver requests regarding GIP or the VHA-approved inventory system management system for the VISN or received from VA medical facilities to VHA P&LO for approval. See paragraph 4.e. in Appendix B for waiver information.

h. Veterans Integrated Services Network Chief Logistics Officer. The VISN CLO is responsible for:

(1) Representing the VISN on all topics related to SCM; serving on boards, committees, councils, and teams at the VISN and national level; facilitating communication between VA medical facilities, VISNs, and VHA Central Office; and developing and implementing VISN strategies to improve SCM programs.

(2) Working with clinical groups to meet patient care needs while also seeking ways to achieve supply chain goals.

mailto:VHA19PLOLogisticsELCMO@va.gov

(3) Assisting with the formulation of VHA SCM policies and procedures.

(4) Establishing and overseeing a VISN-wide Outlook email group that includes all SCM employees, entitled “VISN__ Supply Chain Management.”

(5) Communicating with VA medical facilities to effectively implement VHA SCM policy, reporting, training, and operational requirements. See Appendix A, paragraph 2 for training program information. See Appendix E, paragraph 2.a.(6) for ABC classification inventory management information, including approval of VA medical facility inventory accuracy action plans.

(6) Assessing programs at VISN medical facilities through a Quality Control Review (QCR) once per fiscal year utilizing the QCR checklist and instructions published by VHA P&LO at https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/MonthSubmit/Forms/AllItem s.aspx?RootFolder=%2FPCLO%2FMMStrategicPlan%2FMonthSubmit%2FLogistics%2 0Business%20Reviews&FolderCTID=0x012000E3CCED9018148142A2C557A8465B3 91E&View=%7BB15A5AE0%2DE59A%2D4284%2D840B%2DC820DCADCA8C%7D.

NOTE: This is an internal VA website that is not available to the public. If a VA medical facility has an OAL Facility Logistics Inspection Program (FLIP) review scheduled during the fiscal year, that facility will be exempt from completing a QCR during that fiscal year.

(7) Ensuring compliance with established Federal regulations, VA and VHA policies, memoranda, notices, and established Supply Chain benchmarks.

(8) Managing supply chain data in coordination with the VA medical facility Chief Supply Chain Officer (CSCO).

(9) Scheduling Network meetings, conferences, and trainings to discuss SCM topics.

(10) Serving as the Network Recall Coordinator (NRC) in accordance with VHA Directive 1068, Removal of Recalled Medical Products, Drugs, and Food From VA Medical Facilities, dated June 19, 2020.

(11) Serving as a member of the VISN Equipment Committee. See Appendix A for committee composition and operations.

(12) Collaborating with the Network Director of Contracting (DOC) to establish a standardized communication method to track the status of all procurement packages sent to Contracting within the VISN. In addition, working with the Network DOC and other stakeholders to establish an acquisition plan for emergency preparedness.

(13) Collaborating with the VA medical facility CSCO to set up local processes and procedures to ensure all necessary reports are monitored as required in paragraph 1.e.

in Appendix A.

(14) Serving as a Utilization Officer, in accordance with VA Directive 7348. See paragraph 1.e.(2) in Appendix A for additional performance measure information.

https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/MonthSubmit/Forms/AllItems.aspx?RootFolder=%2FPCLO%2FMMStrategicPlan%2FMonthSubmit%2FLogistics%20Business%20Reviews&FolderCTID=0x012000E3CCED9018148142A2C557A8465B391E&View=%7BB15A5AE0%2DE59A%2D4284%2D840B%2DC820DCADCA8C%7D https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/MonthSubmit/Forms/AllItems.aspx?RootFolder=%2FPCLO%2FMMStrategicPlan%2FMonthSubmit%2FLogistics%20Business%20Reviews&FolderCTID=0x012000E3CCED9018148142A2C557A8465B391E&View=%7BB15A5AE0%2DE59A%2D4284%2D840B%2DC820DCADCA8C%7D https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/MonthSubmit/Forms/AllItems.aspx?RootFolder=%2FPCLO%2FMMStrategicPlan%2FMonthSubmit%2FLogistics%20Business%20Reviews&FolderCTID=0x012000E3CCED9018148142A2C557A8465B391E&View=%7BB15A5AE0%2DE59A%2D4284%2D840B%2DC820DCADCA8C%7D https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/MonthSubmit/Forms/AllItems.aspx?RootFolder=%2FPCLO%2FMMStrategicPlan%2FMonthSubmit%2FLogistics%20Business%20Reviews&FolderCTID=0x012000E3CCED9018148142A2C557A8465B391E&View=%7BB15A5AE0%2DE59A%2D4284%2D840B%2DC820DCADCA8C%7D

(15) Sending a waiver request for allowing VA medical facilities and the VISN to suspend requirements of supply chain performance metrics, QCRs, and directives to the Chief Executive of Supply Chain & Logistics, VHA P&LO. See paragraph 1.f. in Appendix A for additional waiver request information.

(16) Providing a status report to the Deputy Network Director at least quarterly on the supply chain training accomplished in the VISN Supply Chain organizations. See paragraph 2.d. in Appendix A for additional status report information.

(17) Reviewing and validating the VA medical facility medical supply and equipment SPL and submitting annually to the VHA P&LO. See paragraphs 1.i.(b)5., 1.j.(h), 1.k.(f) in Appendix A.

i. VA Medical Facility Director. The VA medical facility Director is responsible for:

(1) Ensuring sufficient resources (i.e., space, staffing, and technology) are allocated to the VA medical facility SCM program to meet the requirements of this directive.

(2) Implementing SCM initiatives that seek to optimize customer service outcomes.

(3) Establishing a regularly scheduled forum for VA medical facility leadership to discuss SCM performance with the VA medical facility CSCO.

(4) Conducting a review of property management effectiveness by reviewing and signing their Quarterly Equipment Inventory Listing (EIL) Report.

(5) Assigning committee responsibility for clinical product reviews and equipment requests reviews to ensure that supplies and equipment are compatible and meet the needs of clinicians. See paragraphs 1.j. and 1.l. in Appendix A for committee composition and operations.

(6) Certifying that ammunition inventories are included in the Annual Certification of Property Inventories or applicable report as stated in paragraph 4.c. in Appendix E.

j. VA Medical Facility Chief Supply Chain Officer. The VA medical facility CSCO is responsible for:

(1) Representing VA medical facility leadership on all topics related to SCM and serving as the VA medical facility Accountable Official (AO) in accordance with VA Handbook 7002. See Appendix E, paragraph 4.a. for AO ammunition physical inventory count audit duties.

(2) Establishing a local SCM program that meets VHA policy and operational requirements, including the program management requirements dictated in Appendix A, the inventory auditing and reporting requirements dictated in Appendix E, and the inventory management in Appendix I.

(3) Ensuring implementation and adherence to the national SCM standardized organizational structure and reviewing SCM staffing levels as program responsibilities dictate.

(4) Facilitating the work of the VA medical facility committees responsible for equipment request reviews and clinical product reviews (see paragraphs 1.i. and 1.k. of Appendix A) to ensure that a clinically and administratively-driven program is established, the supplies and equipment approved are compatible and meet the needs of clinicians, and the VA medical facility complies with established mandatory programs and with policies mandating use of certain specific procurement instruments, potentially including MSPV contracts and other mandatory Blanket Purchase Agreements (BPAs), Basic Ordering Agreements (BOAs), Indefinite Delivery Indefinite Quantity (IDIQs), or other contract vehicles.

(5) Promoting efficient utilization of supplies by ensuring that proper items and levels are set within inventory points.

(6) Ensuring SCM staff complete all mandatory education and training. See paragraph 6 for training information.

(7) Ensuring the appointment of a Facility Recall Coordinator (FRC) and back-up FRC(s) in accordance with VHA Directive 1068.

(8) Working with the VA medical facility Chief Financial Officer (CFO) to address budgetary requirements, ensure all medical supplies and VA medical facility equipment needs are purchased through SCM, establish fund control parameters, and complete a year end certification letter for inventory values and equipment inventory completion.

(9) Collecting information, responding to surveys, submitting nominations for training, serving as point-of-contact for Office of Inspector General (OIG) inquiries, coordinating visits by the VISN CLO, and other related activities.

(10) Establishing a Total Supply Support (TSS) program at the VA medical facility and utilizing a VHA-approved inventory management system to maintain automated inventories.

(11) Monitoring established supply chain monitors and benchmarks, and ensuring local processes are established to meet or exceed all measures.

(12) Ensuring the SCM program completes a physical inventory of all items within primary inventories with distribution points in accordance with Appendix E. Exception: a physical inventory of ammunition must be completed twice a year.

(13) Ensuring the SCM program completes an annual inventory of non-expendable equipment in accordance with procedures outlined in VA Directive 7002, Logistics Management Policy, dated January 8, 2020, and submits Quarterly EIL Reports signed by the VA medical facility Director and VA medical facility CSCO on time to the VISN

CLO.

(14) Working with VA medical facility management to ensure that employees do not unacceptably convert VA property for personal use. NOTE: For more information on this topic see 28 Code of Federal Regulations (CFR) 45.4.

(15) Ensuring that SDS for all hazardous materials handled or stored are maintained and readily accessible to employees on each shift in their workplace. See Appendix A, paragraph 1.n. for SDS requirements.

k. VA Medical Facility Pharmacy Program Manager. The VA medical facility Pharmacy Program Manager is responsible for:

(1) Implementing the inventory management practices specified in this directive (excluding all Consolidated Mail Outpatient Pharmacies (CMOP)).

(2) Conducting a wall-to-wall physical inventory audit at VA medical facilities annually, as required by Pharmacy Benefits Management (PBM). CMOPs must conduct wall-to-wall physical inventory audits twice a year.

6. TRAINING

See Appendix A, paragraph 2 for VISN and VA medical facility SCM staff training program information.

7. RECORDS MANAGEMENT

All records regardless of format (paper, electronic, electronic systems) created in this directive shall be managed per the National Archives and Records Administration (NARA) approved records schedules found in VA Records Control Schedule 10-1.

Questions regarding any aspect of records management should be addressed to the appropriate Records Manager or Records Liaison.

8. REFERENCES

a. VA Directive 7002, Logistics Management Policy, January 8, 2020.

b. VA Directive 7348, Utilization and Disposal of Personal Property, January 8, 2020.

c. VA Handbook 0730/4, Security and Law Enforcement, dated March 29, 2013.

d. VA Handbook 7002, Logistics Management Procedures, January 8, 2020.

e. VA Handbook 7348, Utilization and Disposal of Personal Property, January 8, 2020.

f. VA Financial Policy Volume XVI, Charge Card Programs, Chapter 1A, Administrative Actions for Government Purchase Cards, dated June 14, 2018, Chapter 1B, Government Purchase Card for Micro-Purchases, dated February 27, 2019, and Chapter 1C, Government Convenience Checks, dated February 27, 2019.

g. VHA Directive 1068, Removal of Recalled Medical Products, Drugs, and Food From VA Medical Facilities, dated June 19, 2020.

h. VHA Directive 1081.01(1), Procurement of Surgical Implants Under 38 U.S.C.

8123, dated October 29, 2018.

i. VHA Directive 1439, Food Service Management, dated October 21, 2019.

j. VHA Directive 1850.04, Employee Uniforms, dated April 6, 2017.

k. VHA Handbook 1050.01, VHA National Patient Safety Improvement Handbook, dated March 4, 2011.

l. VA PPM (2016-02) – VA Procedures Regarding the Use of Ordering Officers:

https://www.va.gov/oal/docs/business/pps/ppm201602.pdf.

m. VA HVAC Design Manual, dated November 1, 2017 (Rev. March 1, 2020): :

https://www.cfm.va.gov/til/dManual/dmHVAC.pdf.

n. VA Pandemic Influenza Plan (March 2006):

https://vaww.vha.vaco.portal.va.gov/sites/PublicHealth/HCI/Shared%20Documents/HCI %20Planning%20References/VA%20Pandemic%20Flu%20Plan_2006-03-31.pdf.

NOTE: This is an internal VA website that is not available to the public.

o. VA Physical Security Design Manual, dated January 2015:

https://www.cfm.va.gov/til/spclRqmts.asp#PHS.

p. Safety Data Sheet/Chemical Inventory Guidebook:

http://vaww.hefp.va.gov/guidebooks/safety-data-sheetchemical-inventory-guidebook.

NOTE: This is an internal VA website that is not available to the public.

q. VHA Procurement & Logistics Reference Center:

https://vaww.pclo.infoshare.va.gov/PCLO/WebPages/ReferenceCenter.aspx. NOTE:

This is an internal VA website that is not available to the public.

r. VHA Procurement Manual:

https://vaww.pclo.infoshare.va.gov/PCLO/PMWeb/VHAPM_TOC.aspx. NOTE: This is an internal VA website that is not available to the public.

s. Material Handlers Training Guide TG-90-1:

https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/LogPolicySite/Lists/Log_Poli cy_List/TrainingGuide.aspx. NOTE: This is an internal VA website that is not available to the public.

https://www.va.gov/oal/docs/business/pps/ppm201602.pdf https://www.cfm.va.gov/til/dManual/dmHVAC.pdf https://vaww.vha.vaco.portal.va.gov/sites/PublicHealth/HCI/Shared%20Documents/HCI%20Planning%20References/VA%20Pandemic%20Flu%20Plan_2006-03-31.pdf https://vaww.vha.vaco.portal.va.gov/sites/PublicHealth/HCI/Shared%20Documents/HCI%20Planning%20References/VA%20Pandemic%20Flu%20Plan_2006-03-31.pdf https://www.cfm.va.gov/til/spclRqmts.asp#PHS http://vaww.hefp.va.gov/guidebooks/safety-data-sheetchemical-inventory-guidebook https://vaww.pclo.infoshare.va.gov/PCLO/WebPages/ReferenceCenter.aspx https://vaww.pclo.infoshare.va.gov/PCLO/PMWeb/VHAPM_TOC.aspx https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/LogPolicySite/Lists/Log_Policy_List/TrainingGuide.aspx https://vaww.pclo.infoshare.va.gov/PCLO/MMStrategicPlan/LogPolicySite/Lists/Log_Policy_List/TrainingGuide.aspx

A-1

APPENDIX A

SUPPLY CHAIN PROGRAM MANAGEMENT

1. REQUIREMENTS FOR SUPPLY CHAIN PROGRAM MANAGEMENT

To ensure full implementation and oversee ongoing supply chain program management, the following steps must be taken to implement new inventories and maintain existing inventories:

a. Evaluating Organization Structure and Staffing Levels. Staffing levels at the Veterans Integrated Service Networks (VISNs) and Department of Veterans Affairs (VA) medical facilities must be evaluated to determine what levels are required to ensure compliance with this directive and support for all operational needs. VA medical facility Chief Supply Chain Officers (CSCOs) must ensure the Supply Chain Management (SCM) organization conforms with nationally standardized organization structures, and that standardized position descriptions are implemented where appropriate.

b. Physical Space Planning. The physical space allocated to the supply chain program must be reviewed periodically and evaluated for adequacy to promote an effective and efficient supply chain operation by the VA medical facility CSCO. Interior design, Safety, Facilities Management or other internal resources can be consulted, as required, to support space planning and needs assessments.

(1) Administrative (office) areas should be reviewed as staffing or other organizational changes occur to ensure adequate space for the tasks being performed.

(2) A current space/floor plan and layout for the warehouse must be reviewed annually, signed by the VA medical facility CSCO, and posted annually. Consideration should be given to receiving operations, shipping, equipment management (tagging, excess), hazardous chemical storage, movement of material handling equipment, and distribution/delivery activities.

(3) Plans for establishing and organizing an inventory storeroom (primary or secondary) must include careful consideration of space, climate control, availability of shelving, and frequency of users accessing inventory. The VA medical facility inventory manager should involve the customer when establishing an inventory storeroom. Failure to plan the layout with customer input could result in the wrong products being stocked and inappropriate levels being set. Consideration must be given to the products being stored, the grouping of products used for a particular procedure or process, security requirements, criticality of the product, infection control requirements, environment of care requirements, and product availability from vendors and manufacturers. Successful implementation is dependent upon this analysis.

c. Monitoring and Evaluating Inventory Accounts. Inventory account set-up and operational decisions must be made based on local needs, economic investment in inventory, and the VA medical facility mission. Monitoring and evaluating inventory

APPENDIX A

A-2 accounts requires maintaining two separate inventory categories: clinical and non-clinical.

(1) Monitoring inventory accounts involves ensuring all mandatory inventory accounts are established and baseline performance levels are achieved. At a minimum, inventory points will be established following the naming standards and guidelines in Appendix B for the following types of expendable items:

(a) Dental.

(b) Engineering.

(c) Environmental management.

(d) Imaging.

(e) Laboratory.

(f) Medical surgical.

(g) Prosthetics.

NOTE: See Appendix C for a list of minimum Functional Areas Requiring Inventory Management. Pharmacy is exempt from this monitoring requirement.

(2) Action Plan. If it is determined that an inventory point is not implemented in accordance with this directive, an action plan must be prepared by the VA medical facility CSCO and submitted through the VA medical facility Director, VISN Chief Logistics Officer (CLO), and VISN Director for approval by the Veterans Health Administration (VHA) Procurement and Logistics Office (P&LO). P&LO has 30 calendar days to approve and return the plan to the VISN Director. Upon receipt of the approved plan, the VA medical facility CSCO will proceed with implementation, with updates provided monthly to the VISN CLO. A completed action plan must be submitted to VHA P&LO at the end of the timeframe stipulated in the approved plan.

(3) Evaluation. Evaluating the SCM program includes the VISN SCM staff continually analyzing supply chain functions at each VA medical facility within the VISN to include:

(a) An annual review of operational practices to ensure compliance with regulatory and performance measure requirements in accordance with published inspection criteria, currently contained in the Quality Control Review (QCR) checklist published by

VHA P&LO.

(b) Analysis and assessment of VA medical facility needs.

(c) Resources required for implementation (e.g., Information Technology (IT) equipment, scanners).

A-3

(d) Training needs.

d. Requirements for Performance Measures.

(1) Performance measures for inventory and equipment management are released and changed by VA and VHA on an ongoing basis to monitor SCM core activities and data accuracy. For VHA Supply Chain Management, benchmarks and reports are currently being published and tracked on the Supply Chain Common Operating Picture (SCCOP) intranet site, located at https://app.powerbigov.us/. NOTE: This is an internal VA website that is not available to the public. Included in these performance measures and benchmarks are Medical/Surgical Prime Vendor (MSPV) utilization, Equipment Inventory Listing (EIL) inventory accuracy, expendable inventory turnover, various data accuracy measures as well as other performance criteria. VISN CLOs and VA medical facility CSCOs must set up local processes and procedures to ensure all necessary reports are monitored on these or other publish sites or software systems on a routine basis and take appropriate steps to ensure all supply chain performance measures are maintained in compliance.

(2) Inactive and long supply items must be properly maintained, stored, accounted for, excessed or disposed of in accordance with VA Handbook 7348, Utilization and Disposal of Personal Property, dated January 8, 2020.