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Coalition for Government Procurement Update. 2018 AMSUS Annual Meeting November 28, 2018. About the Coalition for Government Procurement. National trade association representing commercial contractors in the Federal market
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Coalition for Government Procurement Update 2018 AMSUS Annual Meeting November 28, 2018
About the Coalition for Government Procurement • National trade association representing commercial contractors in the Federal market • Advocates for common sense policies that improve the acquisition environment for government and industry • Focused efforts on VA, GSA, and DOD • 270 member companies that collectively represent $145B in annual Federal contract sales • 100 member companies that participate on the Coalition’s Healthcare Committee, Medical/Surgical Subcommittee, and Pharmaceutical Subcommittee • Represents small, medium, and large businesses from multiple business sectors including healthcare, professional services, IT, and furniture
Segmentation of contractor-addressable federal market Source: BirchGrove analysis of GFY 2019 PB Direct Obligations, Indirect Obligations, and PB Addendum
Healthcare Market – Big Picture • Consolidation • Standardization • Efficiencies • Administration Priorities include: • Cyber and supply chain security • Lower costs • Buy American • e-Commerce • Opportunity for greater cooperation
VA Healthcare – Big Picture • Standardization • Increased clinical input • Increasing the micro-purchase threshold • Streamlining • FSS reform • Reorganization……
VA Pharmaceuticals • PBM • Transparency • Recommending the PBM adopt more formal and transparent processes • Acetris Health, LLC v. the United States • COFC bid protest from July 16, 2018 which determined that products manufactured in the United States even if it does not meet the substantial transformation test • FSS • Coalition has recommended the elimination of the PRC and revisions to the CSP that account for the unique market conditions for pharmaceuticals
Federal Supply Schedules – What is the Future? • Opportunity for Reform? • The NAC is working on issues such as: • Cycle times • Adding new/innovative products quickly • Coalition’s Pricing White Paper recommended the elimination of the Price Reductions Clause and other reforms • GSA could play a role
Medical/Surgical Prime Vendor Program • There are about 23,000 items on the formulary currently • The current J&A will expire in Spring 2020, the current MSPV contract will expire in Spring 2021 • Issues the VA is addressing before 2020/2021: • Developing a process for clinically driven sourcing on the formulary • Adding enough product to the formulary to meet demand • Competition and the “Rule of Two” • The draft RFP for MSPV 2.0 is expected to be released in December/January timeframe
Electra-Med Corporation, et al. v. The United States • Bid Protest in the Court of Federal Claims over the J&A for other than full and open competition in the MSPV program • Court ruled in favor of the protesters on the merits • But the Court did not grant an injunction because veterans’ healthcare would be harmed if the injunction were granted
Medical/Surgical Clinically Driven Strategic Sourcing • VA has been working to establish a process that gathers clinician input on sourcing decisions for medical and surgical products • Process is intended to be a “bottom-up” approach • First “bucket” will be for cardiology products, but will expand to other buckets as the process continues • Each “bucket” will have a clinical and logistical lead
Surgical Implants Business Process • The business process goes into effect on December 1 • Prescribing clinicians verbally request delivery of the surgical implants • No written delegation of contracting authority is required • Afterwards payment is provided to the vendor by: • PSAS personnel, if the implant is open market below the MPT; if the implant is consigned at any value; and if the implant is on an established contract at any value • Logistics personnel, if the implant expendables below the MPT • Network Contracting Officers, if the open market implants valued over the MPT; if implant expendables valued over the MPT
Congressional Outlook • Democrats will control House of Representatives beginning in 2019 • House Veterans Affairs Committee • Ranking member was Tim Walz, however Walz is currently the Governor-elect of Minnesota • Possible Chairman of the House Veterans Affairs Committee is Mark Takano (D-CA) who served as the acting ranking member for a short period in 2016, and the Vice Ranking Member 2017-2018
DHA – Big Picture • MHS Consolidation ongoing • Shared Services with VA • Standardization • Centralization • Increasing Efficiencies
MHS Consolidation • Military Health System is in the process of being consolidated – moving military treatment facilities from the services to DHA • Goal is to have the consolidation completed by 2021 and to have an integrated healthcare system • Focus on CONUS facilities by the end of 2020 • OCONUS by the end of 2021
DHA Pharmaceutical Issues • While MHS reorganization is ongoing, pharmaceuticals was completed by October 2018 • Other issues the Coalition is following: • Access at DoD Facilities • New Regulation – Tier 4 formulary exclusion status • DHA engaging in more robust formulary management with a focus on standardization and centralization
The Latest in Acquisition PolicyGovernment-wide and Agency specific developments
Government-wide Trends • Cybersecurity and supply chain risk • Congress, DoD, and DHS are actively looking to improve the security for all devices that connect to networks • Coalition has started a Cybersecurity and Supply Chain Committee to address these issues • e-Commerce • GSA is leading the effort for the adoption of a Government-wide e-commerce portal (initial rollout by October 2019) • Increases in the MPT could drive growth in e-commerce
Government-wide Trends (Con’t) • Regulatory freeze slowed down the pace of new acquisition regulations • Category Management on-going and agencies encouraged to use Best-in-Class contracts and move their spend under management • Government-wide reorganization on-going for agencies like GSA, VA, and DoD
Federal Budget • Budget is on-time and increasing • 75% of the funding for FY2019 has been appropriated • This is the first time in more than 10 years that DoD has received its funding on time • Most agencies have received an increase in funding • Expect an 8.7% increase (about $33 billion) • Continuing resolution through December 7 for the remaining agencies • As a comparison, last fiscal year the Government was under a continuing resolution until March
Federal Budget • Who’s funded? • Defense, Military Construction, VA, Energy, Labor, HHS, Education, Legislative Branch • Who’s under CR? • Interior*, EPA*, Treasury*, Transportation*, HUD*, Agriculture*, State, USAID, DHS, Commerce, Justice, NASA * Indicates that appropriations bill has passed House and Senate and awaiting Conference
Thank YouRoger WaldronPresidentrwaldron@thecgp.org202-331-0975Heather TarpleyVice President of Business Development & Saleshtarpley@thecgp.org202-315-1055