The Basics: Department of Veterans Affairs

Tuesday, November 16, 2021

The U.S. Department of Veterans Affairs (VA) is constantly undertaking new initiatives to better service an estimated 19.2M Veterans and their survivors. Since 2012, VA’s total funding has increased by 113%. Working more closely with the Department of Defense (DoD), General Services Administration (GSA), and Small Business Administration (SBA), VA has currently invested 44% of its total FY21 spending on 12 major information technology (IT) investments to better respond to Veteran’ needs and predict future ones. While other departments faced setbacks, the COVID-19 pandemic actually sped up some organizational and technological developments for VA, facilitating several big transformations such as a new cybersecurity strategy and making changes to the community care program.

Mission and Organization

The inspiration behind VA goes back to 1636 when the Pilgrims of Plymouth County passed a law so that disabled soldiers would be supported by the colony. In the initial years of the United States, policies were passed to support Veterans and their families through pensions, medical care and facilities, residences, insurance, vocational training, and more. In 1921, these services were consolidated under the Veterans Bureau, which later became a federal administration in 1930: the Veterans Administration. President Reagan elevated VA to Cabinet status in 1988, changing the name to the Department of Veterans Affairs.

President Abraham Lincoln made a promise “to care for him who shall have borne the battle, and for his widow, and his orphan.” With that, the mission of VA is to serve and honor Veterans by establishing a lifetime relationship between VA and Veterans and their families. Its core values, abbreviated as ICARE, are Integrity, Commitment, Advocacy, Respect, and Excellence.

VA is the second-largest federal department, boasting over 340,000 employees ranging from physicians to statisticians to computer specialists to attorneys. The Veteran programs are run through three major service line organizations:

  1. Veterans Health Administration (VHA)
  2. Veterans Benefits Administration (VBA)
  3. National Cemetery Administration (NCA)

Services and benefits are provided through a nationwide network of 146 hospitals, 1,112 outpatient sites, 300 Vet Centers, 56 Regional Offices, 151 VA National Cemeteries, and 117 State or Tribal grant-funded Veteran Cemeteries – including 106 research programs.

Veterans Health Administration (VHA)

The VHA began as the National Home for Disabled Volunteer Soldiers, which was founded by President Lincoln during the Civil War. Today, it is the largest of the three VA Administrations and the largest integrated healthcare network in the United States. The VHA services over 9.17M enrolled Veterans through its 1,293 healthcare facilities, 171 VA Medical Centers, and 1,112 outpatient sites.

The VHA is divided into Veterans Integrated Services Networks (VISNs), 18 “regional systems of care working together to better meet local health care needs and provide greater access to care.” For example, VISN 6, or the VA Mid-Atlantic Health Care Network, is comprised of 8 VA Medical Centers and 15 community-based outpatient clinics across North Carolina, Virginia, and West Virginia. It’s important to note that medical centers and clinics have tremendous local buying authority.

Recent development in VHA includes outpatient and telehealth services. Before the COVID-19 pandemic, VA held about 40,000 telehealth visits a month, now that number has increased to over 40,000 a day. There have also been technological advances, such as doubling the production of 3D printed supplies like nasal swabs and medical equipment. Additionally, 60% of medical residents now train at VA hospitals at some point.

Veterans Benefits Administration (VBA)

The first national pension laws for injured soldiers date back to the American Revolution, with three people in the War Department filing and responding to claims. In 1953, VBA became its own department within the VA. VBA helps Veterans transition back to civilian life through education benefits, home loans, life insurance, compensation benefits, pension benefits, vocational rehabilitation services, and much more. It distributes $135B in benefits and services annually. There are 24,000 VBA employees across its 56 regional offices.

The Veterans Appeals Improvement and Modernization Act of 2017 improved disability claims processes. There are now three methods of appealing a claim, and the VA now assists Veterans with claims until they have reached a decision. The Forever GI Bill, formally named the Harry W. Colmery Veterans Educational Assistance Act of 2017, expanded access to education as well as continued modernization of the education platform – Digital GI Bill. More people, such as dependents or guardsmen, are eligible for education benefits. Additionally, there is increased funding for education benefits and more opportunities for STEM learning.

National Cemetery Administration (NCA)

NCA is one of three federal entities that manage US national cemeteries. The other two are DoD’s Department of the Army and the Department of the Interior’s National Park Service, but only NCA is developing new Veteran cemeteries. NCA dates back to an 1862 legislation that purchased land for cemeteries during the Civil War. It mostly focuses on management and grave marking for its 150 cemeteries and digital Veterans Legacy Memorial. NCA provides a headstone, marker, medallion, U.S. flag, and Presidential Memorial Certificate with each burial service. Over 4.9M Veterans have been buried through NCA, and 344,245 headstones have been provided.

Contract Procurement and Acquisition

Regardless of how large or small your business is, VA is a potential customer. VA purchases contracts on national, regional, and local levels; however, the Office of Procurement, Acquisition, and Logistics (OPAL) is responsible for enterprise-wide solutions and is responsible for several critical procurement centers including the:

  • National Acquisition Center (NAC): health care requirements of the VA and other government agencies
  • Strategic Acquisition Center (SAC): non-IT enterprise-wide solutions for VA’s highly complex requirements
  • Technology Acquisition Center (TAC): enterprise-wide solutions in information and technology
  • Office of Construction and Facilities Management: major construction including Medical Centers and National Cemeteries

Each VA facility, such as a hospital, VISN, or cemetery, acquires contracts through its local acquisition office. The VISNs can acquire contracts too; VISN 6, described above, contracted Ameresco under the DoD Energy Saving Performance Contract Program for VA Medical Centers in its region to improve infrastructure and energy efficiency. However, the entirety of VA largely purchases through the Federal Supply Schedules (FSS), SAM, and the Virtual Office of Acquisition.

VA’s general contract procurement and acquisition process is outlined below.

A lot of VA contracts are only looking for certain types of businesses, such as Service-Disabled Veteran-Owned Small Businesses (SDVOSB) or Veteran-Owned Small Businesses (VOSB) due to the Veterans Benefits, Health Care, and Information Technology Act of 2006. The Veterans First Verification Program started in 2006 so that eligible SDVOSB and VOSB can be verified by the Office of Small and Disadvantaged Business Utilization’s (OSDBU) Center for Verification and Evaluation (CVE) so they can compete for these VA set-asides.

Currently, there are four stages to the verification process: intake, assessment, federal review, and decision. Eligibility is based on the Titles 38 Code of Federal Regulations (CFR) Part 74 and 13 CFR Part 125. Businesses should use the VetBiz Portal to apply for certification and find contracting opportunities. If a business is looking to register, the Preparing for Verification Handout includes instructions and links, making it a good place to start. There are also “Understanding the Verification Process” training series, webinars, town halls, and Verification Assistance Program/Counselors/Briefs to help businesses through this process.

The verification process will transition from VA to SBA at the start of 2023 as stated in the National Defense Authorization Act (NDAA) of 2021. This means that the Veterans First Verification Program and CVE will be run through SBA. There is nothing for current verified businesses to do right now, and they will keep their certifications when the transition occurs. There are no changes to the certification process, the program is transferring ownership in an effort to consolidate all small business verification programs under SBA. VA will still have set-asides for VOSBs and SDVOSBs.

Recent Awarded Contracts

These are a few contracts the VA has awarded to provide a sense of the different needs of the department. In line with the mission of the VA, many of these contracts are set-aside for SDVOSBs.

  • Psychiatrist Services – Annashae Corporation was awarded a $7.3M contract from the VA in August 2021 to provide psychiatrist services in Cleveland, Ohio. This contract was intended for a SDVOSB.
  • TeleCare Companion IDIQ – In October 2021, VA issued six contract awards for a 5-year IDIQ to support this turnkey solution to the Veterans Health Administration’s (VHA) TeleCare Companion initiative. Work under the award is to include help desk support, analytic reporting, clinical and technical staff training, ongoing repair and replacement and maintenance of equipment.
  • Nicotine Lozenges MINI – In May 2021, The Harvard Drug Group LLC won a VA contract to produce mini nicotine lozenges. The estimated total value of the contract is $11.7M.
  • Veteran-Facing Services – Check-In Experience – In November 2021, Agile Six Applications was awarded a $4M one-year contract. The task was awarded as an SDVOSB set-aside action using the VA Customer Experience, DevOps, Agile Releases (CEDAR) IDIQ.
  • Temporary Sterile Processing Technicians Staffing – The VA awarded this SDVOSB set-aside contract, valued at $317,376, to Prosperitus Solutions, LLC. Based in San Antonio, Texas, Prosperitus Solutions is temporarily providing technicians to help the VA with sterile processing practices.
  • Replace Underground Storage Tanks – This SDVOSB set-aside was awarded to Senate Builders and Construction Managers, Inc. in August 2021. This $1.9M contract will replace underground storage tanks at a medical facility in Pennsylvania.

Spending Trends

As of August 2021, the VA has obligated $233.3B of its $315.9B budget for FY21. In particular, the Veterans Benefits Administration spent $109.6B on compensation and pensions, $10.7B on readjustment benefits, and $5B on other general operating expenses. The Veterans Health Administration spent $57.2B on medical services, $21.5 on medical community care, $7.1B on medical support and compliance, $6.3B on medical facilities. The most common places of performance are in California, Arizona, Texas, Virginia, and Florida.

Top 10 U.S. Federal Contractors (FY16-FY21):

  • McKesson Corporation:
  • Triwest Healthcare Alliance Corp.
  • QTC Medical Services, Inc.
  • Cerner Government Services, Inc.
  • Health Net Federal Services, LLC
  • Veterans Evaluation Services, Inc.
  • Dell Federal Systems L.P.
  • Booz Allen Hamilton Inc.
  • Optumserve Health Services, Inc.
  • Four Points Technology, L.L.C.

Top 10 PSC Codes (FY16-FY21):

  • 6505 (Drugs and Biologicals)
  • Q999 (Medical – Other)
  • 6515 (Medical and Surgical Instruments, Equipment, and Supplies)
  • D399 (IT and Telecom – Other IT and Telecommunications)
  • Q403 (Medical – Evaluation/Screening)
  • D318 (IT and Telecom – Integrated Hardware/Software/Services Solutions, Predominantly Services)
  • R499 (Support – Professional: Other)
  • Q402 (Medical – Nursing Home Care Contracts)
  • D319 (It and Telecom – Annual Software Maintenance Service Plans)
  • Y1DA (Construction of Hospitals and Infirmaries)

Top 10 NAICS Codes (FY16-FY21):

  • 325412 (Pharmaceutical Preparation Manufacturing)
  • 621111 (Offices of Physicians (except Mental Health Specialists)
  • 541512 (Computer Systems Design Services)
  • 541519 (Other Computer Related Services)
  • 236220 (Commercial and Institutional Building Construction)
  • 339112 (Surgical and Medical Instrument Manufacturing)
  • 339113 (Surgical Appliance and Supplies Manufacturing)
  • 623110 (Nursing Care Facilities (Skilled Nursing Facilities)
  • 334510 (Electromedical and Electrotherapeutic Apparatus Manufacturing)
  • 541611 (Administrative Management and General Management Consulting Services)

Opportunities to Work with VA

Here are some active solicitations released by the VA. Again, many of these opportunities are specifically for SDVOSB.

  • Community Nursing Home Services – In January 2022, the VA Network Contracting Office 17 is expecting to award multiple Texas-based companies a firm-fixed-price indefinite delivery indefinite quantity (IDIQ) contract, with a small business size standard of $30M. It is a one-year contract with the possibility of extending for up to four more years. The VA is looking to build a Community Nursing Home for VA beneficiaries in South Texas, El Paso, Amarillo, and Big Spring, including physician visits, laboratory, x-ray, and other services.
  • Repair Roads & Drainage Issues at Bay Pines National Cemetery – The VA is looking for an SDVOSB to complete several construction services at the Bay Pines National Cemetery in Saint Petersburg, Florida. The estimated work includes upgrading the roadways to provide better rainwater drainage, replacing the Committal Services Shelter, expanding the cortege lane, and dredging the irrigation pond. This contract is expected to cost between $1M and $5M.
  • Financial Service Center (FSC) Accounting Support Services – The VA FSC has a requirement for a broad range of general accounting and clerical support services, including program and project management; governance; policy analysis; curriculum and training; and data analytics and evaluation.
  • Enterprise Service Desk (ESD) Contact Center Infrastructure (CCI) Support – VA is looking to continue to provide cost-effective, consistent, world-class enterprise IT support to enhance the end-user experience by providing enhanced and innovative solutions for business-focused practices that enable VA to end users to maintain their ability to provide service to our Nation’s Veterans.

VA in FY22

For FY22, VA is requesting $269.9B, a 10% increase from FY21. The Budget Request for FY22 includes the following:

  • $117.2B (a 9% increase) for healthcare, benefits, national cemeteries, and other direct services to Veterans
  • $152.7B (a 10.2% increase) for compensations and pensions, readjustment benefits, housing, and insurance
  • $18B for the President’s American Jobs Plan and $260M for the President’s American Families Plan
  • $1.6B for major construction and $553M for minor construction

Key Challenges to be Addressed in 2022:

  • Establishing the right balance of VA and Community Care
  • Improving support for women Veterans
  • Addressing an aging infrastructure

The top three risks identified by VA are:

  • Managing risks and improving VA healthcare
  • Disability claims and appeals process barriers
  • IT Modernization/Legacy

VA is expecting a 1.3% increase in the number of patients seen, including 119M outpatient visits, a home mortgage program portfolio with 4M loans, and 136k new inductees into the cemeteries in 2022. It has already increased PPE, staff, outreach, appointment availability, and more in VA health centers in its response to COVID-19. VA has also implemented corrective actions in the acquisition process to ensure the usage of best business practices. The Corporate Senior Executive Management Office has started using the National Announcement strategy to decrease the timeline for VISN Directors to hire new Medical Center Directors to weeks.

VA Beyond FY22

The VA FY18-FY24 Strategic Plan outlines VA’s priorities and how it plans to achieve them.

Customer service will always be a top priority for VA because the vast majority of its work is providing benefits services to Veterans, so its success is measured by how satisfied and well-off its customers are. VA is also looking to continue the implementation of the Maintaining Internal Systems and Strengthening Integrated Outside Networks (MISSION) Act of 2018 to expand its Community Care Network, combine community care programs, expand the Family Caregiver Program to include more people, and increase overall capacity for VA patients.

VA is also in mid-transition to a new Electronic Health Record (EHR) that will connect the VA appointment system and database to DoD’s, private health care providers, and private pharmacies to improve overall patient care and safety. The EHR Infrastructure Readiness schedule incorporates lessons learned from DoD’s experience when they transitioned to the same system. The EHR is the focal point of the Electronic Health Record Modernization (EHRM) Program, “one of the largest IT projects in government history.” It is estimated to cost $16.1B in total with the possibility of an additional $5B. The EHRM Program is currently on hold until 2022 while VA addresses these rising costs, patient safety concerns, and increases the productivity of the overall system. Additionally, the Veterans Health Care Freedom Act, introduced to Congress in July 2021, would create a pilot program where Veterans can choose their health care providers with the intent of increasing access to medical care and facilities.

The Financial Management Business Transformation (FMBT) Program is intended to improve transparency, timeliness, and accuracy of VA financial information to taxpayers. It entails transitioning VA to iFAMS, a commercial off the shelf cloud solution, including a new acquisition management solution. This transition was accelerated to begin during the COVID-19 pandemic. Similarly, the implementation of the Defense Medical Logistics Standard Support (DMLSS) System began in August 2020 at the Captain James A. Lovell Federal Health Care Center in Chicago; its purpose is to update the supply chain and address its shortcomings department-wide.

The National VA History Center is expected to open in either 2025 or 2026. This new museum and archival center at the Dayton VA Medical Center campus will become home to seminal artifacts and archives relevant to the mission, accomplishments, and continued work of the VA. The Center is also responsible for digitized materials. The project started in August 2020, and infrastructure renovation, such as mechanical, electrical, plumbing, will start in early 2022 and is expected to take 12 to 18 months.

Additional areas of focus include accountability, women’s health, community living centers, hiring and vacancies, and decreasing wait time. Suicide prevention is VA’s top clinical priority. VA and DoD’s collaborations also aim to facilitate the transition from military to Veteran status. All in all, VA has gone through remarkable changes in the past few years and expects to continue this trend of updating and transforming to keep up with technological advancements and Veteran needs.

Researched and authored by Haley Boulanger, Pulse Analyst.

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