NIH Contract Guide
Administration's Emphasis on Health IT Will Boost New NIH GWACs
White House approves CIO-SP3 contracts valued up to $20 billion each

By Steve LeSueur

The National Institutes of Health’s Information Technology Assessment and Acquisition Center (NITAAC) is preparing to launch a new Chief Information Officer-Solutions and Partners 3 (CIO-SP3) program that the White House says will fill an important need for agencies with health-related responsibilities.

The Office of Management and Budget (OMB) on July 20 designated NIH as an executive agent for the CIO-SP3 and CIO-SP3 Small Business governmentwide acquisition contracts (GWACs). Each contact will offer a wide range of IT services and solutions, with a special focus on health-related IT services. The 10-year, indefinite delivery, indefinite quantity (IDIQ) CIO-SP3 contracts will each have $20 billion ceilings.

“The programmatic expertise of [NIH’s] in-house scientists and medical experts will provide strong support for the award and management of its contracts,” OMB said in a statement announcing that it had renewed NIH’s GWAC authority. “The new GWAC vehicles will also provide increased opportunities for small businesses in federal contracting, allowing agencies to tap into the talents of this community as they work to achieve best value for their missions and our citizens.”

The solicitation for the CIO-SP3 full-and-open contract will be issued toward the end of August, with proposals due in late October, NITAAC officials said. Awards are anticipated to be made late June 2011. The CIO-SP3 Small Business solicitation will be issued in mid-September, with proposals due in late November and awards anticipated in late June 2011.

The CIO-SP3 contracts will give federal agencies “access to the most progressive and innovative technologies and solutions available from contractors that are expert both in IT and health-related fields.” Diane Frasier, Director of the NIH Office of Acquisition and Logistics Management

NITAAC officials, who oversee NIH GWACs, expect the two CIO-SP3 solicitations to draw strong interest from federal agencies. The new GWACs will provide a wide scope of IT services and solutions in ten major task areas, and will require that solutions be aligned with the Federal Health Architecture. NITAAC also has made numerous improvements to its ordering processes, thus making the contract easier to use and more attractive to federal procurement officers. And the separate CIO-SP3 Small Business contract will make it an attractive vehicle for meeting small business goals.

With federal spending on health IT expected to total up to $25 billion through fiscal 2014, NITAAC officials anticipate robust business from federal organizations with health IT requirements. “The health IT market will provide great opportunities for government programs and the health IT industry over the next several years,” said Robert Coen, NITAAC deputy program director. “NITAAC offers the most mature acquisition program for health IT services and products within government.”

Overseeing three GWACS
NIH is part of the Department of Health and Human Services (HHS). NITAAC currently oversees three GWAC contracts:

• CIO-SP2 Innovations (CIO-SP2i) for IT services and solutions. The 10-year contract, which has a $19.5 billion ceiling, was awarded to 44 prime contractors and expires on December 20, 2010.

• Image World 2 new dimensions (IW2nd) for imaging services. The 10-year contract, which has a $15 billion ceiling, was awarded to 24 primes and also expires on December 20, 2010. The task areas from IW2nd will be incorporated into the new CIO-SP3 contract.

• Electronic Commodities Store III (ECS III) for IT hardware, software and related services. The 10-year contract, which has a ceiling of $6 billion, was awarded to 60 companies and expires on November 26, 2012.

NITAAC is a self-sustaining organization, which means that it pays for its systems, services and staff through the fees it charges customers to use its GWAC contracts. The administrative fee for CIO-SP3 will be 1 percent for the full and open contract, and 0.75 percent for the small business contract. The fee for ECS III is 0.5 percent. Any sales revenue generated by the fees that exceeds the cost of operating the program is invested in new systems and other improvements to boost customer service.

“As an executive agent for the acquisition of IT, we are accountable to OFPP to report annually on our efforts, such as the extent of utilization of small businesses and the quality of our program performance.” Mary Armstead, NITAAC Program Director

Daniel Gordon, administrator of the Office of Federal Procurement Policy (OFPP), recently completed an exhaustive review of the NITAAC programs, which culminated in OMB renewing NIH’s executive authority for the CIO-SP3 and CIO-SP3 Small Business GWACS. Mary Armstead, NITAAC program director, described the review as “very positive.”

NITAAC released a draft request for proposal (RFP) for CIO-SP3 in November and is now preparing to release the final RFP for both CIO-SP3 contracts. Because the existing CIO-SP2i and IW2nd contracts expire in December, NITAAC likely will need a short-term extension of those contracts until CIO-SP3 is underway, Armstead said.

Anticipating customer requirements
Although the CIO-SP3 solicitations are designed for NIH and HHS customers, the scope of IT services and solutions is broad enough to serve the requirements of other federal agencies, which also can use the contract vehicle. In creating CIO-SP3, NITAAC officials talked with customers about their current and future needs, and also examined recent legislation, such as the American Recovery and Reinvestment Act and Patient Protection and Affordable Care Act, to anticipate agencies’ health IT requirements. The statement of work in the draft RFP states that the focus of the contract “is to proactively address issues deemed vital to the federal government and specifically to provide health and biomedical-related IT services in support of federal agencies’ health missions.” The contract requires that services and solutions for biomedical research and healthcare support the Federal Health Architecture (FHA), which coordinates interoperable health IT efforts.

“We intend to ensure that contractors that receive awards on the CIO-SP3 contract are capable in federal IT, that they understand the federal health architecture and understand the requirements that the federal government has in aligning their work to FHA,” Coen said.

Many agencies beyond NIH and HHS have health IT requirements, including the Department of Defense, Veterans Affairs, NASA, National Science Foundation, and Department of Agriculture. These agencies will need solutions that are compliant with federal health IT standards, said Ray Bjorklund, senior vice president and chief knowledge officer for FedSources, and “so being able to turn to an agency that has a contract vehicle written along the lines of the FHA could be very attractive.”

Kevin Plexico, senior vice president of research and analysis services with INPUT, agrees. “The extent to which NIH emphasizes health IT and makes that a focus of the new CIO-SP3 RFP will enhance its ability to attract a larger volume of health IT work than it has attracted under CIO-SP2,” Plexico said.

This is precisely the goal of the new GWACs. Diane Frasier, Director of the NIH Office of Acquisition and Logistics Management, said the CIO-SP3 contracts will give federal agencies “access to the most progressive and innovative technologies and solutions available from contractors that are expert both in IT and health-related fields.” Testifying June 30 at a Senate subcommittee hearing on interagency contracts, Frasier said, “With the advent of the Affordable Health Care Act, solutions made available through these vehicles will go far in assisting federal agencies in executing reform initiatives and aligning with the Federal Health Architecture.”

Strengthening Customer Service
During the past year, NITAAC has rolled out an electronic ordering system that provides agency customers with a variety of tools and services for using the CIO-SP contract. It enables them to manage their requirements and solicitations online, communicate with vendors, and review vendor proposals. The ordering system also enables NITAAC to review requirements quickly and release proposals to vendors. The system automatically ensures that agencies comply with regulations requiring that they provide contract holders with a “fair opportunity” to be considered for each potential order.

“It’s a very efficient model for doing competition and provides a great deal of information for the customer, the contract holder and our program office to maintain a record of each order that goes through the system,” Coen said. The rich database enables agencies to “track their task orders from pre-award through award and administration and close-out,” he said.

“We intend to ensure that contractors that receive awards on the CIO-SP3 contract are capable in federal IT, that they understand the federal health architecture and understand the requirements that the federal government has in aligning their work to FHA.” Robert Coen, NITAAC Deputy Program Director

Equally important, the system requires very little training to learn and is simple to use. “Our customers tell us they can easily put in orders in as little as 10 minutes,” Coen said.

Along with implementing the new ordering systems, NITAAC also reengineered aspects of its task-order review process. When agencies submit a statement of work, NITAAC reviews it to ensure that it is within scope of the contract. NITAAC also provides feedback to help customers better define their requirements or improve their statements of work. NITAAC now reviews and returns statements of work to customers within 24 hours, Coen said.

These changes followed the establishment of a robust customer service help center just a little over a year ago. The help center systems track customer calls and e-mails to ensure that customers get feedback and the help they need. “It’s our intention that everything gets resolved within 24 hours. We don’t want customers or vendors waiting for answers,” Coen said.

Armstead said NITAAC continues to build upon these upgrades in infrastructure and processes to improve the use of data that is collected by the new systems. “As an executive agent for the acquisition of IT, we are accountable to OFPP to report annually on our efforts, such as the extent of utilization of small businesses and the quality of our performance,” Armstead said. “We also conduct surveys with customers and vendors to gauge the level of satisfaction. We are monitoring and measuring a variety of dimensions, not just to plug into our annual reports, but to continually improve our efforts.”

Aggressively pursuing customers
Bjorklund said these activities, along with strong federal health IT spending, should help to boost NIH’s GWAC sales. Agencies that have GWAC programs and other interagency contracts compete for customers, and so they have to continuously refine and upgrade their services. “You have get out there and market your contract and provide methods, processes, standards and tools that make it simple for your customers to place an order and then have it fulfilled,” he said. “It looks like NITAAC is realigning itself to be much more competitive.”

In fact, NITAAC officials say they are doing just that. They have stepped up training efforts as well as outreach to potential customers, demonstrating for contracting officials throughout government how to place orders using the NITAAC systems.

“The buying community has many options, and they often do things the way they have for many years, so we feel it is our responsibility to go out and educate the buying community about this opportunity they have to more quickly and efficiently meet their IT needs for products and task order services for IT,” Coen said.