Companies that supply eyeglasses to veterans are accused of setting low prices to win contracts with the Department of Veterans Affairs (VA), then jacking up the prices of upgrades at the expense of quality and using aggressive sales tactics to swindle veterans out of their money.
Kentucky-based PDS Consultants, which is run by U.S. military veterans, was awarded a five-year contract to manufacture eyewear and provide other optical services for VISN 7 in November 2022, replacing competitor Superior Optical in October of the following year.
VISN (Veterans Integrated Service Network) refers to a nationwide network of clinics and other medical facilities for veterans in the U.S. VISN 7 covers Georgia, Alabama, and South Carolina.
To win the VISN 7 contract, PDS Consultants submitted a bid of less than $10 million, much lower than the bids made by Superior Optical and Carter-Lambert, which came in at roughly $30 million and $40 million, respectively.
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A metal plaque on the front of the Department of Veterans Affairs building in Washington, DC (Robert Alexander/Getty Images)
Many employees who worked at Superior Optical found themselves working for PDS Consultants overnight after the company acquired VISN 7. Fox News Digital previously reported on PDS employees who felt pressured to upsell to military veterans and meet monthly sales targets.
In the months after that report, Fox News Digital received a flood of messages from people close to PDS Consultants and the VA who claimed the company was recouping losses at the expense of veterans, though they asked not to be identified for fear of retaliation.
A source close to the VA, who spoke to Fox News Digital on the condition of anonymity, likened the way PDS Consultants was awarded the VISN 7 contract to a “bait-and-switch” tactic.
“They bid the lenses for the low price of $1, beating out the competition. Any sane person knows you can’t make eyeglass lenses for less than a dollar,” the source said. “Well, they have to make up that money somehow, because, obviously, if they don’t make a profit, they’re not in business. So, [PSD] What they do is upsell you glasses and accessories. [and] We offer expensive upgrades to veterans.”
According to court documents, PDS Consultants proposed asymmetric or “disproportionate” pricing, offering some products at prices well below market price and others at prices well above market price, with some items offered at nominal prices or, in the case of optician services, free of charge for $0 per hour.
However, even though the contracting officer determined that PDS prices were “significantly undervalued” for some services and “significantly overvalued” for others, these disproportionate prices were not deemed to pose “an unacceptable risk of taxpayer overpayment.”
Still, sources close to the VA who spoke to Fox News Digital claim that the quality of glasses has plummeted under PDS’s stewardship, likening it to the shift from Ray-Bans to Walmart products.
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“Veterans were receiving very poorly made, inferior eyewear products. Sometimes they were delivered broken.” [Sometimes] “In some cases the wrong prescriptions were being delivered,” the source said, adding that delivery times were “unusually long.”
U.S. Army and Vietnam War veterans attend Memorial Day observances at Santa Fe National Cemetery in Santa Fe, New Mexico. (Robert Alexander/Getty Images)
“Veterans were getting six, seven, eight complaints a day about poor workmanship, poor quality and poor delivery times — sometimes taking as long as 15 days, twice as long as the original shipping date,” the source said.
Other sources told Fox News Digital that veterans received significantly fewer frames and lens options for free after PDS Consultants acquired VISN 7. One source said the company offered the “worst of the worst” brands for free and charged significantly more for upgrades than the previous company, forcing veterans to pay more out of pocket.
Fox News Digital reached out to the VA in February to inquire about the allegations against PDS Consultants. At the time, VA spokesman Terrence Hayes told Fox News Digital that the department had “not received any direct veteran complaints about the vendor, nor have we received any reports that veterans have been asked to pay price increases when filling prescriptions.”
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However, a source close to the VA disputed that statement, saying the number of complaints the VA received after PDS Consultants was awarded the VISN 7 contract was “more than all contractors combined in the previous 10 years.”
Fox News Digital reached out to the VA again this month to inquire about these allegations.
Hayes told Fox News Digital that the VISN 7 clinical team is “aware of the veterans’ complaints and has been working to address those concerns,” but did not provide details.
“If contractors do not meet the high standards that VA patients deserve, we will hold them accountable to the terms of their contract and take steps to terminate the contract if necessary,” Hayes said. “If a contractor’s past performance is documented, the government may choose to re-solicit a new contractor.”
Military veterans stand next to the border fence during a “Remembering Our Fallen Veterans” event to mark Fallen Veterans Memorial Day on the U.S.-Mexico border in Playas de Tijuana, Baja California, Mexico, May 29, 2022. (Guillermo Arias/AFP via Getty Images)
Hayes said the VA has a “firm, fixed-price contract,” meaning the price “is not subject to any adjustments based on the contractor’s cost experience.”
In other words, the contractor assumes full risk and full responsibility for all costs and any resulting profits or losses.
Hayes rejected the idea that veterans would have to pay more out of pocket “because prescription glasses are provided to veterans at no cost.” He acknowledged that veterans may have noticed fewer options with the change in provider, but rejected the claim that quality has decreased.
“If a veteran would like a particular brand or specialty lenses that are not medically indicated, the veteran can pay an additional fee for that choice,” Hayes said. “Finally, if there is a manufacturing error or the glasses arrive broken, the VA will cover the cost of remaking them. In those cases, the veteran will not be charged for the cost of replacement glasses.”
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PDS vice president Rob Yopps told Fox News Digital the company is proud of its track record and that its veteran owners are “proud to have served their country in combat and are honored to continue serving the nation’s veterans.”
Yopps declined to comment on PDS’s specific bidding strategy, saying the company was following “the established process set out by the VA.”
He said the award of the VISN 7 contract resulted in “significant savings to the U.S. taxpayer.”
“PDS is adhering to the contracts agreed with the VA. PDS’ performance is addressed through official VA channels. PDS has received positive past performance evaluations from the VA indicating that they are satisfied with our performance on the contracts mentioned,” Yopps said.
He referred to previous comments made by the VA to Fox News Digital saying it had “found no evidence of price increases after PDS was awarded the contract, and has not received any direct complaints from veterans about the vendor.”
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Meanwhile, Superior Optical has filed a lawsuit in the Court of Federal Claims against the VA, challenging the award of the five-year contract to PDS Consultants. Oral arguments in the case are scheduled to begin in late July.
