How data-driven acquisition identified over $90M in savings for VA in 6 months
Editor’s Note: This post was written jointly with the U.S. Department of Veterans Affairs.
Intro
The U.S. Department of Veterans Affairs (VA) is one of the largest integrated health care systems in the United States, providing care at 1,298 health care facilities to over 9 million Veterans. With a mission this big, it is absolutely essential that VA acquisition professionals can leverage every possible taxpayer dollar in its supply chain to improve patient care and better serve Veterans. However, VA acquisition process is incredibly complex — with thousands of acquisitions personnel supporting the Department’s purchasing needs across over 170 facilities and over a thousand clinics — and the sheer volume of diverse and disaggregated data required to make informed acquisition decisions is overwhelming.
This is why VA has taken leadership in data modernization and is partnering with Palantir Technologies to use advanced commercial software and AI-enabled solutions to help eliminate spending redundancies, increase acquisition efficiency, reduce costs, and simply put, deliver more value and enhanced benefits to America’s Veterans while maintaining the highest quality of care. Starting in 2020, VA’s Category Management Support Office (CMSO) and acquisition workforce have teamed with Palantir to create the “Analytics, Data, and Decision Support Unified Platform” (ADDS UP), which provides operational capabilities aimed at increasing spend under management, cost avoidance, and acquisition efficiency through contract analysis and consolidation.
The benefits to taking a data-based approach to Veteran care are clear, saving VA time and money, and ultimately bringing more resources and efficiency where they are needed most — towards the care America’s Veteran community.
In FY23 alone, ADDS UP and its AI-enabled solutions have:
· Supported a user base of 530+ users from across VA Acquisition Workforce;
· Proactively surfaced 1.3K+ duplicative contracts, which, when consolidated, result in $92M+ of cost avoidance;
· Reduced time to perform market research on procurements from months to weeks, and sometimes even days;
· Increased spend under management, preventing $10.9B of inefficient spend that would have led to overspending, excessive contracting workload, and hindered procurement of crucial items; and
· Drastically reduced time to find answers to key analytical acquisition questions.
How did VA achieve this? Let’s dive deeper into how the CMSO and Palantir are applying advance software solutions to address critical budgetary and acquisition challenges across the Department.
What is ADDS UP? Data analytics for VA acquisition excellence
Acquisition professionals navigate a complex process of awarding contracts for goods and services across hundreds of VA-affiliated facilities. All of these facilities need a continuous supply of goods and services to perform effectively and deliver care and benefits to veterans. To enable the best quality and price for these goods and services, VA acquisition professionals conduct extensive market research — all while complying with Federal and VA acquisition regulations, especially regarding small business utilization. For these hard-working professionals, the challenge lies in navigating scattered contract information across disparate systems — including reams of complex data from multiple sources — to make cost-effective acquisition decisions that will provide maximum benefit to those in VA’s care. The goal of ADDS UP, therefore, is to help acquisition professionals sift through such vast amounts of data to enable contracts that are optimally priced and adhere to government standards — the end result being more and better resources applied to Veteran care.
More specifically, ADDS UP is a Foundry-driven Category Management solution, configured for VA to increase cost avoidance and acquisition efficiency. The platform uses cutting-edge software to unify previously disparate acquisitions source systems — including both publicly available and VA-specific data — to form an operational picture of VA’s contracting and acquisitions activities, as well as to create configured workflows for VA personnel (e.g., Senior Leadership, Heads of Contracting Activity and Category Managers, and ground level members of the Acquisition Workforce like Contracting Officers and Contracting Specialists). By introducing a strategic category management approach to procurement in ADDS UP, VA is better able to use its buying power to negotiate special contracts with vendors to optimize prices across the nation.
But how did VA and Palantir field such an effective Category Management system so quickly? Together, we took the following steps:
1. Data Integration: Merged disparate data sources, ensuring all relevant data points were considered and integrated (i.e., VA-specific contract data, publicly available data, key vendor data, and policy-driven category management data from the General Service’s Administration).
2. Ontology Creation: Organized all relevant data to form an accurate and thorough representation of VA’s acquisition ecosystem (ie. Transactions, Contracts, Vendors, Contracting Offices).
3. User-Centric Application Building: Partnered directly with key user groups, such as Senior Leadership, Category Management Support Officers, Contracting Heads, and ground members of the Acquisition Workforce to identify and create customized applications using the core data asset. These applications were specifically designed to alleviate users’ most critical pain points (e.g., High volume contracting research and pricing comparisons, small business discovery and outreach, opportunity targeting for increasing spend on best in class vehicles, etc.).
4. AI & ML Enhancement: Incorporated AI and ML technologies into workflows, allowing for the quick identification and prioritization of the most pressing issues for resolution (e.g., Duplicative Contract Investigation Tooling, Natural Language Ask and Answering Service, PDF Extraction and Requirement Surfacing, etc.)
5. Continuous Improvement: Implemented aggregate reporting and feedback loops for ongoing review and optimization of the data asset and workflows.
For end users at VA, this process generated tangible and effective capabilities that made an immediate impact on their daily work. Here are some specific examples of the types configured workflows, tools, and dashboards ADDS UP has enabled for VA acquisition workforce:
Full common operating picture of the acquisition landscape
- Senior Leader Dashboard: Provides leadership visibility into dollars obligated, potential cost avoidance, managed spend, and other KPIs. This includes an ability to drill down into geographies to identify actionable areas of potential cost avoidance, as well as allows senior leadership to export and view contract data of interest.
- Heads of Contracting Activity (HCA) and Category Manager Landing Pages and Dashboards: Gives each HCA and Category Manager the ability to see key metrics and click into a variety of different dashboards to see more information on those metrics. This allows them to optimize their contract spend, small business utilization, cost avoidance, and spend under management.
- Managed Spend by Office Dashboard (aka Office Analyzer Tool): Aggregated geographic visualization of contracting offices at VA, grouped and ranked by spend under management metrics, enabling decision-makers to home in on areas of opportunity for potential cost avoidance.
Automated alerting and triage workflows for non-compliant contracts
- Duplicative Contract Investigation Tool: A tool that uses machine learning (ML) to determine which contracts are “duplicative” and which one is the better amongst them.
- The related Contract Alerting Tool builds on the findings of which contracts are duplicative to help users take action and update alerts about duplicative contracts.
Tools embedded with Category Management insights
- Acquisition Support Workflow: A workflow that surfaces existing contracts and vendors to be browsed and filtered by factors important to VA (veteran owned, small business, price, etc.) to help ensure the best contract is executed. The workflow is broken up into three steps that guide users through a sequence for researching potential contracts by prioritizing VIP/SBA vendors/contracts.
- Procurement Report Suite: As part of the Acquisition Support Workflow, provides tools to consolidate research on spending into a procurement report, including tools that allow you to draw on data from current contracts and vendors (via Vendor Exploration Tool), create a plan for research, and share that report with others.
- Contract and Vendor Exploration Tools: Comprehensive views of Contract and Vendor objects showing key Category Management information, metrics, and aggregations within an easy, point, click, and filterable experience. The tool also allows users to see each Object View, which shows detailed information and metrics over time.
As indicated above, the supportive power of ADDS UP is further augmented by its safe, secure, and effective use of ML/AI and Generative AI-enabled tools. For example, the platform includes a “SmartSearch” feature — powered by Palantir’s Artificial Intelligence Platform (AIP) — that uses large language models (LLMs) to hone in on the information they need, while inferring VA-specific context that users are familiar with. Before this feature, finding contract information at VA was an incredibly arduous process; but today, SmartSearch allows acquisition professionals to ask critical research questions in natural language, rapidly expediting answers and enabling faster market research and acquisition decision-making.
Overall, these software and AI-enabled capabilities provide deep visibility into acquisitions, actionable insights into areas of contracting opportunities for increased cost avoidance, and tooling for research and analysis to maximize the speed and cost efficiency of procuring goods and services.
What’s Next? Expanding the Impact of ADDS UP for Veteran care
Going forward, ADDS UP has the potential to make an even greater impact on how acquisition professionals procure solutions for America’s Veterans. We are particularly excited to expand the responsible application of AI-enabled tools that will improve the daily analytical operations of VA acquisition professionals. For example, we are currently working to build upon the SmartSearch feature by creating a new AIP-based Terminal Chat Widget.
Together with Palantir, VA is leveraging the power of advanced software to solve complex data challenges and meet its mission needs. ADDS UP is demonstrating VA as a leader in federal data management, and as a successful early adopter of Machine Learning-enabled workflows for the public good.
Authors
Dr. Ernest Reed — Director, Category Management Support Office at U.S. Department of Veterans Affairs
Justin DeVuono — Deployment Strategist, Palantir
Veterans Affairs & Palantir was originally published in Palantir Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.