The U.S. Justice Department will investigate whether consulting firm BearingPoint committed fraud while working on an information technology system at Bay Pines VA Medical Center, St. Petersburg, Fla., according to Sen. Bill Nelson (D-Fla.).
The Veterans Affairs Department halted the IT project in July, after spending $265 million of the $472 million budget, and said problems with the computer system could not be fixed. In a letter to Attorney General John Ashcroft, Nelson asked the Justice Department to determine "whether criminal prosecution is merited."
BearingPoint, based in McLean, Va., declined to commit on the matter. The Justice Department said it won't confirm or deny the existence of investigations.
A report released last week by the VA's inspector general's office skewered leadership at Bay Pines and recommended a review of BearingPoint's purchases and use of government funds during the project.
Task orders were given to BearingPoint without competitive bidding and cost estimates were accepted without independent evaluation, "tantamount to issuing BearingPoint a blank check," the inspector general's report said.
The report said weak leadership at Bay Pines created a lack of trust and lowered physician and employee morale. In addition, VA management did not protect the government's interests, it said.
A VA spokesman said the agency would support the Justice Department and any prosecutorial action that may be taken.
Obtain a PDF of the VA report.