Consulting firm ties let ex-VA officials win contracts

| Wednesday, Sept. 18, 2013, 12:01 a.m.

President Obama's nominee to head the Department of Veterans Affairs' health care services personally steered government consulting work to a friend who retired as a VA administrator in 2011, the Tribune-Review has learned.

Dr. Robert Petzel, nominated in 2009 and approved to head the sprawling $55 billion-a-year Veterans Health Administration, requested the services of former VA colleague Al Washko to introduce “evidence-based decision-making” to the VA, according to a posting on the Sinclair Advisory Group website.

VA officials in Washington refused to respond to questions from the Trib or to discuss Petzel's actions.

In a story published on Sunday, The Trib identified Virginia-based Sinclair as a major recipient of VA consulting contracts — many of them single-bid agreements that allowed for extensions sometimes worth more than the original contract.

Unlike Washko, Sinclair has government certification to seek federal contracts. Washko won his contract by working through Sinclair, though he neither works at the company nor directly for the company.

Federal contracts generally must be competitively bid, except in certain special emergency situations. The head of an agency typically cannot pick an old friend to award a government contract. In this case, the situation is clouded.

“He did come to me” before any consulting contract was signed, Washko said of Petzel, the VA's undersecretary for health. “I had worked for Dr. Petzel for many years.”

However, Washko said his contracts “were bid by Sinclair Advisory Group in a legal way.” Sinclair, he said, “was the contracting outfit.”

He declined to say whether his relationship with Petzel — whom friends and associates call “Randy” — gave him the inside track to get the work.

The big losers when contacts go to friends and acquaintances “are the veterans who wait longer for services they earned by protecting our nation,” said J. David Cox Sr., national president of the American Federation of Government Employees, the union representing federal employees. “Veterans and taxpayers continue to be poorly served by VA's contracting practices.”

Sinclair and other government consulting contractors say their work often comes at a bargain because they know the system and how it works, and sometimes the personalities involved.

Sinclair was the subject of a blistering Inspector General report in 2010 for receiving no-bid contracts from the VA, contrary to federal rules. “Sinclair associates” who work through the company to win government contacts are a Who's Who of former VA officials, the Trib found.

At the top is Stan Sinclair, former VA deputy undersecretary for benefits — one of four deputy undersecretaries in the department. His son Seth operates the company.

The General Services Administration authorized the firm to bid on individual contracts worth less than $1 million. The Trib found the VA awarded Sinclair more than 160 such consulting contracts. The contracts typically are awarded to an associate who is a former VA official using Sinclair's approval to win government work.

In June 2011, Sinclair Advisory Group mentioned on its website that Petzel asked Washko to work for the VA. It is unclear whether others bid on the work.

During Petzel's confirmation hearing, Sen. Mike Johanns, R.-Neb., said Washko personally lobbied him on Petzel's behalf.

“Al Washko … gave me a call just a few days ago and pointed out to me that he had worked under you at some point in his career,” Johanns said. “He spoke of your leadership, your integrity and what you brought to the job, and could not have given you a more positive recommendation.”

Johanns told Petzel that Washko's lobbying “carried a lot of weight.”

Until his retirement in 2011, Washko headed the VHA system in Nebraska and Western Iowa, which is part of the regional Veterans Integrated Service Network 23. Petzel headed VISN23 until President Obama selected him to lead veterans' health care nationwide.

Washko would not say how much his contracts were worth but said his work is complete.

Sinclair reported on June 8, 2011: “At the request of VA Under Secretary of Health Randy Petzel, Sinclair Associate Albert (Al) Washko is helping” to make the VA “people-centric, forward thinking, and results-oriented.”

Washko was to “help senior managers at 12 VA facilities throughout the nation” adopt a data-mining process he developed in Omaha, the online newsletter said.

Government databases show two contracts of about $500,000 awarded to Sinclair by the VA about the time of that announcement, though it's not known whether either contract involved Washko.

Lou Kilzer is a Trib Total Media staff writer. Reach him at 412-380-5628 or

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