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VA will not use contractor for new GI Bill

Ambitious and controversial plans to use a private contractor to receive and pay claims for a new GI Bill education benefits plan that takes effect Aug. 1 have been canceled because the Department of Veterans Affairs could not find a contractor.

Instead, VA officials will rely on its own employees to create and implement a complicated benefits plan that promises full tuition payments, a housing stipend and a book allowance. VA will have to determine a maximum rate for each state but calculate payments individually, based on where a person is attending school.

In congressional testimony, VA officials had defended the idea of using an outside contractor to implement the new Post-9/11 GI Bill program to skeptical lawmakers and veterans’ groups, saying that using private-sector expertise would be a faster and more efficient way to calculate the benefits and come up with a modern payment system that uses electronic claims and claim tracking.

In the end, VA officials convinced some people. For example, the veterans’ service organization AmVets, which would have preferred the program be handled within VA, ultimately supported VA’s contractor proposal.

“AMVETS feels that time is too short. In less than a year the program needs to be up and running, otherwise veterans could be locked out from their benefits,” said spokesman Ryan Gaullacci in a statement before VA announced it would not be using a contractor after all.

VA officials said in a statement that they will rely on their in-house work force to set up the new GI Bill program because VA “did not receive enough proposals from qualified private-sector contractors to create an information technology program that implements the new benefit. “

VA Secretary Dr. James Peake said the controversy over the program might have been a reason for a lack of interest.

“Many private contractors were apparently reluctant to offer proposals because of external misconceptions as to the scope of the work involved,” Peake said in a statement. “While it is unfortunate that we will not have the technical expertise from the private sector available to assist us in developing the information technology solution, VA can and will deliver the benefits program on time.”

Patrick Dunne, VA’s undersecretary for benefits, defended the decision to look for outside help, even though it did not succeed.

“The Post-9/11 GI Bill is unusually complex, with payments being tailored to tuition costs and going to both students and educational institutions,” Dunne said in a statement. “Some benefits are determined by a school’s ZIP code, and others by in-state rates for tuition.”