The Basics: Department of Health and Human Services

Friday, March 18, 2022

The U.S. Department of Health and Human Services (HHS) is a massive government entity; its budget alone is ¼ of the entirety of the 2022 U.S. federal budget. As such, HHS provides a huge range of services to U.S. citizens, from medical research to counterterrorism efforts. HHS was on the frontline of the smallpox eradication in 1977, 2001 anthrax attacks, ongoing COVID-19 pandemic, and more. HHS contracting needs and department-wide goals are as broad as the service and research it provides.

History, Mission, and Organization

“The mission of the U.S. Department of Health and Human Services (HHS) is to enhance the health and well-being of all Americans, by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services.” 

HHS maintains over 100 programs that address various topics such as health insurance, social services, emergency preparedness, and research. These services can benefit Americans in need of financial or medical assistance, but HHS works to prepare and protect U.S. citizens.

The idea behind HHS dates to 1798, when a federal network of hospitals for the care of merchant seamen was established; this officially evolved into the U.S. Public Health Service (PHS) in 1912. An early version of the National Institutes of Health (NIH) opened in 1887 in the form of a federal government-owned laboratory for research on the disease in Staten Island. 

HHS is organized into a number of staff offices, as well as 11 operating divisions listed here:

  1. Administration For Children and Families (ACF)
  2. Administration For Community Living (ACL)
  3. Agency for Healthcare Research and Quality (AHRQ)
  4. Agency for Toxic Substance and Disease Registry (ATSDR)
  5. Centers for Disease Control and Prevention (CDC)
  6. Centers for Medicare & Medicaid Services (CMS)
  7. Food and Drug Administration (FDA)
  8. Health Resources and Services Administration (HRSA)
  9. Indian Health Service (IHS)
  10. National Institutes of Health (NIH)
  11. Substance Abuse and Mental Health Services Administration (SAMSHA)

Below is HHS’ organizational chart.

The Office of the Secretary (OS) is HHS’ main policy officer, administering and overseeing the organization. It is divided into 14 subcomponents and run by a Deputy Secretary and several Assistant Secretaries. OS, Operating Divisions, and Regional Offices administer HHS programs. Many HHS-funded services are provided at the local level by state or county agencies, or through private sector grantees. 

The Office of Intergovernmental and External Affairs (IEA) has ten Regional Offices, each led by a President-appointed Regional Director, that maintains contact with those served through HHS programs and policies. The ten regions are outlined below. 

The following are several subdivisions of HHS that are critical to the agency’s overall mission, described in more detail. 

Assistant Secretary for Preparedness and Response (ASPR)

ASPR leads the country’s medical and public health strategy to address disasters and public health emergencies by overseeing advanced research, development, procurement, and stockpiling of medical countermeasures such as vaccines and other medical supplies. ASPR works with hospitals, healthcare coalitions, biotech firms, community members, and lower levels of governments across the country to improve readiness and response capabilities. 

President Biden announced a new ‘Test to Treat’ initiative as part of the National COVID-19 Preparedness Plan during his State of the Union address in March 2022. Managed by ASPR, this program makes COVID-19 treatments more readily available to those that need them by allowing patients to be tested for COVID-19, receive a prescription, and get their medicine in a single visit. ‘Test to Treat’ builds on existing ASPR resources being distributed across the country and works through a direct federal ordering process.

Office of the National Coordinator for Health Information Technology (ONC)

ONC is at the forefront of the administration’s health information technology (IT) efforts and is a resource to the entire U.S. health system by supporting the adoption of health IT and promoting nationwide health information exchanges to facilitate health care services. ONC is the main federal entity coordinating nationwide efforts to implement the most advanced health IT and the electronic exchange of health information. 

In March 2022, ONC announced the release of a new edition of Inferno Framework, a testing tool health IT developers use to implement Health Level Seven’s Fast Healthcare Interoperability Resources (FHIR), a standard used to easily exchange electronic health records between different systems. Inferno uses a Ruby Domain Specific Language to write Test Kits, a JSON API to increase compatibility between new and existing workflows, and a basic web user interface to simplify user interaction with Test Kits. The update makes Inferno easier and more useful for the health IT community because it supports testers and gives developers more flexibility. Inferno has also been upgraded to utilize the new Standardized API Test Kit for the FHIR Standardized API for Patient and Population Services certification criterion. 

Center for Disease Control (CDC)

CDC serves as the national focus for disease prevention and control, environmental health, and health promotion and health education activities designed to improve the health of U.S. citizens. It is responsible for controlling the spread of infectious diseases, and provides consultation and assistance to other nations and international agencies to assist in improving their disease prevention and control, environmental health, and health promotion activities. 

A CDC Press Release from January 2022 offers updated maps of America’s high levels of physical inactivity. This data comes from the CDC’s Behavioral Risk Factor Surveillance System, a telephone interview survey, and reports that 1 in 4 U.S. adults are not physically active enough. This is also the first time the CDC created maps for inactivity of non-Hispanic American Indian/Alaskan Native and non-Hispanic Asian adults. The release also lists the benefits of physical exercise and provides tips on how to meet the minimum recommended exercise, showcasing the comprehensiveness of the work the CDC conducts. 

Food and Drug Administration (FDA)

FDA is responsible for protecting the public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices. FDA advances public health by helping to speed innovations that make medical products more effective, safer, and more affordable and by helping the public get the accurate, science-based information they need to use medical products and foods to maintain and improve their health. FDA also plays a significant role in the country’s counterterrorism capabilities by ensuring the security of the food supply and by fostering development of medical products to respond to deliberate and naturally emerging public health threats.

The FDA approved Jardiance, generically known as empagliflozin, in February 2022 to treat a wider variety of adults with heart problems. In 2014, Jardiance was approved to control glucose levels in adults with type 2 diabetes. Its usage has now been expanded to decrease the risk of cardiovascular death and hospitalization for adults with type 2 diabetes, cardiovascular disease, heart failure, and low ejection fraction. Jardiance was tested in an international trial involving almost 6,000 participants. This approval will provide a new option for the 650,000 people in the U.S. that are affected by heart failure every year. 

National Institute of Health (NIH)

NIH’s mission is to seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to enhance health, lengthen life, and reduce illness and disability. NIH research has resulted in a longer life expectancy for Americans, more effective responses to illnesses and disabilities, and a more productive economy. 

A study funded by NIH’s Brain Research Through Advancing Innovative Neurotechnologies (BRAIN) Initiative, the National Science Foundation, and Brain Canada, provides insight as to how the human brain separates, categorizes, and recalls memories. A March 2022 NIH News Release stated that this research resulted in identifying two types of brain cells that have boundaries between distinct events and separate memories based on when they occurred. The study recorded brain activity of participants as they watched videos that had cognitive boundaries, or transitions theorized to mark the beginning and end of a memory in the brain. In the future, these findings will be tested in relation to dopamine and theta rhythms, both of which have connections to memory storage and recall. This discovery could be useful in understanding and treating memory disorders, such as Alzheimer’s disease.

Contract Procurement and Acquisition

The Division of Acquisition (DA) is responsible for the administration and management of HHS acquisitions. The DA is separated into four offices: 

  1. Acquisition Policy: The Office of Acquisition Policy manages the HHS Acquisition Regulation (HHSAR) and participates in government-wide acquisition rule-making. 
  2. Acquisition Program Support: The Office of Acquisition Program Support conducts procurement management and acquisition performance reviews and manages the HHS Strategic Sourcing, HHS Government Purchase Card Programs, and the acquisition elements of the HHS Strategic Sustainability Program.
  3. Acquisition Workforce & Strategic Initiatives: The Office of Acquisition Workforce & Strategic Initiatives oversees acquisition workforce programs for DA employees. 
  4. Acquisition Business Systems: The Office of Acquisition Business Systems serves as the Business Owner for various acquisition systems, develops department-wide acquisition standards, and manages contract data quality initiatives.

The HHSAR puts into effect and supplements the Federal Acquisition Regulation (FAR). Last updated in November 2015, the HHSAR includes regulations for Cost-reimbursement, Time-and-Materials, Labor-Hour, and Letter Contracts; Multi-year contracting; Major System Acquisition; and Research and Development Contracting. It also has specific clauses for acquisitions involving human subjects or laboratory animals.

Like most, if not all federal government agencies, businesses have to register with SAM before contracting with HHS. Businesses also need a DUNS number, tax ID (also called an Employer Identification Number), NAICS Code, and any possible small business delegations. HHS recommends searching SAM.gov for HHS contracting opportunities, as well as Vendor Outreach Sessions. This Small Business Calendar of Events includes Vendor Engagement Sessions, and interested businesses can also sign up for email updates. The HHS Forecast Opportunities come from HHS’s Office of Small and Disadvantaged Business Utilization (OSDBU) because it houses its Procurement Forecast Data Repository. However, this forecast is used for all types of businesses.

HHS has numerous resources for contractors, including advice for writing capability statements. It lists what information businesses should include, such as other agencies you have served, partners and authorized resellers, and staff clearances and certifications. HHS even offers a sample statement. HHS OSDBU also has a Youtube Channel with tutorials and advice on contracting as a small or disadvantaged business. A federal agency, or even a subdivision of one, having a Youtube Channel is very unique and offers a different perspective on how HHS communicates with customers. Its HHS Acquisition Alert Broadcast reviews the details of Executive Order 14042, which required new COVID-19 safety protocols for government contractors. HHS lists industry-specific programs for businesses looking to work with a specific department within HHS, such as the FDA, Agency for Healthcare Research and Quality, or CDC. It also provides information on economic and community development programs and health programs for employers.

HHS’ Vendor Communication Plan describes how HHS is improving its methods of communication throughout the acquisition process internally and externally. It also outlines the responsibilities of the HHS Industry Liaison as ensuring timely responses and open communication lines, working with OSDBU, and encouraging feedback from vendors. The Vendor Communication Plan addresses misconceptions about HHS communications by affirming that government officials can meet one-on-one with potential clients, protests can be avoided through open communication, and that industry days and working with new vendors are priorities. 

The HHS BuySmarter Program began in October 2020 to fix fragmented and inconsistent acquisition practices across HHS that were causing redundancies and a lack of transparency. BuySmarter uses Artificial Intelligence (A.I.) and Blockchain to analyze HHS requirements, finding places where contract vehicles from separate departments within HHS can be consolidated to save money. This program is estimated to save $720M each year.

Recent Contracts

The following are contracts recently acquired through OS’ Office of Acquisitions Management, Contracts, & Grants (AMCG). While the solicitation arose from OS, the contracted services are overseen by other offices. 

  • DRIVe: The Division of Research, Innovation, and Ventures (DRIVe) within BARDA sought companies who could speed up and increase the availability of innovations related to health security to improve the U.S. government’s capability to respond to national security health threats. The Broad Agency Announcement called for unconventional ideas focused on the Early Notification, to Act, Control and Treat (ENACT), solving Sepsis, or other products with the potential to radically impact Health Security. In January 2019, Prenosis, Inc. was awarded a $749,000 contract. Numerous other companies were also awarded various sums, including the Rory Staunton Foundation, and Rizlab Health, Inc. This award falls under PSC A, Research and Development, and NAICS Code 541714, Research and Development in Biotechnology (except Nanobiotechnology).
  • AS03 Adjuvant System: In September 2019, GlaxoSmithKline LLC won a $8,359,043 firm-fixed-price contract to manufacture a cGMP commercial-scale bulk lot of AS03 adjuvant system. Adjuvants are used to increase the efficacy of other drugs. This interagency agreement was awarded on behalf of Defense Health Agency (DHA) within the Department of Defense and involved a Justification for an Exception to Fair Opportunity because GlaxoSmithKline has a unique adjuvant system with the longest shelf-life. DHA has procured pre-pandemic influenza antigen and adjuvant through BARDA since 2005. This contract was classified under PSC 65, Medical/Dental/Veterinary Equipment and Supplies, and NAICS Code 325414, Biological Product (except Diagnostic) Manufacturing.
  • Last Mile – Mail Order Pharmacy: The Division of Strategic National Stockpile, within ASPR, wanted to acquire mail-order pharmacy delivery of antibiotics for post-exposure prophylaxis, which is medicine taken after exposure to HIV to prevent infection. The major urban areas serviced by this include Chicago, Los Angeles, New York City, Kansas City, San Francisco, Denver, and the National Capital Region. Express Scripts won this contract, valued at $119,000 in the Proof of Concept Stage, in September 2019. The award features a three month trial phase, four one-year option periods, and a final nine-month option period. This contract is listed as PSC Q, Medical Services, and NAICS Code 446110, Pharmacies and Drug Stores. 
  • EBOLA Vaccine: Janssen Vaccines and Protection, the pharmaceutical company of Johnson & Johnson, won a contract to create a vaccine for U.S. citizens with a high risk of exposure to Ebola worth $44,656,010 in September 2017. The European Commission approved this vaccine in July 2020; the vaccine is also in Prequalification status with the World Health Organization as of April 2021. Over 225,000 people worldwide have received at least the first dose of the Ebola vaccine. This contract is classified as PSC A, Research and Development, and NAICS Code 541711, Research and Development in Biotechnology. 

Spending Trends

As of March 18, 2022 – HHS has spent $693B. $382B has been spent on grant awards; whereas $11B has been spent on federal contracts. So far, it has 4,861 new contracts for FY22. The distribution of these new contracts is shown below.  

Procurement

Being such a huge government entity, HHS contracts a variety of goods and services. HHS spends on infrastructure and technology, like most (if not all) federal agencies. It often works with Quality Improvement Organizations (QIOs) to ensure that best practices are being utilized to run HHS and provide health services to U.S. citizens. Having these services completed by external organizations increases turnaround, accuracy, and compliance. But HHS also uses contracts to increase health services available to HHS-serviced people. For example, contract health care services not available within HHS’ Tribal health facilities will provide an estimated 213,800 patient services in 2022. Additionally, HHS contracts out research projects, particularly digital health care research. This is by no means an exhaustive list, but it shows the diversity in the types of contracts and contractors HHS works with. The data provided here is department-wide, meaning it is not limited to OS and the Program Support Center (PSC). 

Over the past five years, the majority of contracted work has taken place in Maryland, Virginia, and Georgia. 

Grants

HHS is the largest grant-making agency in the US. Most grants go to states, territories, tribes, and educational and community organizations before they are distributed among individuals and organizations who are eligible to receive funding. As you can see below, HHS’s grant obligations over the past five fiscal years has far exceeded its total procurement obligations by a whooping 670%

Most HHS grant money goes to California, New York, and Texas government departments

Like the contracting process, businesses looking to apply for HHS grants must have a DUNS number and be registered with SAM.gov. Applicants must also be registered with Grants.gov. 

The HHS Grants Policy Statement is an overview of HHS process for awarding grants, terms and conditions, and points of contact.

HHS Grant Process:

  1. Planning: The HHS Program Management Office identifies the priorities and timeline of the project.
  2. Announcement: The Funding Opportunity Announcement (FOA) or Requests for Assistance (RFAs) are approved by the Grants Management Office and typically published in the Federal Register or the NIH Guide for Grants and Contracts. All grants can be found on Grants.gov as well.
  3. Application Evaluation: Includes receipt and screening, independent/objective review, business management evaluation, and cost analysis of applications. 
  4. Negotiation: The Grants Management Office represents the government in negotiations. The intensity of each negotiation depends on the project.
  5. Award: A Notice of Award (NoA) is published. 
  6. Post-award Monitoring
  7. Closeout

Noncompetitive awards include new awards, extensions, continuations, and supplements. This process is different in that announcements are not required, and the technical evaluation process is not used or shortened.

HHS grants are typically used for government services or general research purposes. For example, the CDC awarded a grant to The Kinshasa School of Public Health to investigate Monkeypox and other zoonotic diseases in the Democratic Republic of the Congo. This research should lead to strategies to develop important interventions and public health strategies. In February 2022, the Eunice Kennedy Shriver National Institute of Child Health and Human Development, within NIH, released a Notice of Intent to publish a FOA for Learning Disabilities Research Centers. These learning centers are used to research the causes and developmental course of learning disabilities.

HHS in 2023 and Beyond

The FY22 Omnibus provides a total of $108.3B for HHS, an increase of $11.3B above the FY21 enacted levels. There are several Congressional initiatives of note included in the appropriations bill including:

  • Public health and preparedness
  • Tribal health services
  • Mental health
  • Opioids and substance misuse
  • Science, research and development
  • Public health data and analytics

Over the fiscal years ahead, HHS will be focusing on major challenges the U.S. is currently facing, namely COVID-19 (and future pandemics), increasing numbers of Unaccompanied Migrant Children, climate change, and the opioid and substance abuse crisis. HHS priority areas for this fiscal year are maternal health, data and research, tribal health, and early child care and learning. 

HHS has yet to release an updated Strategic Plan, but it is expected as the current one expires at the end of FY22. 

Researched and authored by Haley Boulanger, Pulse Analyst.

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