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Coalition for Government Procurement Update

This update from the Coalition for Government Procurement covers the advocacy efforts for sensible policies in federal acquisition, with a focus on VA, GSA, and DoD. Discover key healthcare market trends and the Coalition's recommendations for improvements in the federal healthcare market and supply chain security. Get insights into VA healthcare initiatives, pharmaceutical reforms, and the future of Federal Supply Schedules. Learn about the Medical/Surgical Prime Vendor Program, strategic sourcing developments, and the impact of the recent court rulings on procurement programs. Stay informed about the Congressional outlook and the ongoing consolidation efforts in the Military Health System.

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Coalition for Government Procurement Update

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  1. Coalition for Government Procurement Update 2018 AMSUS Annual Meeting November 28, 2018

  2. 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

  3. State of Federal Healthcare Market

  4. Federal Healthcare Market

  5. Federal Healthcare Market – Agency Buyers in 2017

  6. Segmentation of contractor-addressable federal market Source: BirchGrove analysis of GFY 2019 PB Direct Obligations, Indirect Obligations, and PB Addendum

  7. 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

  8. VA Healthcare – Big Picture • Standardization • Increased clinical input • Increasing the micro-purchase threshold • Streamlining • FSS reform • Reorganization……

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. Medical/Surgical Prime Vendor Spending

  16. VA Purchase Card Spending

  17. VA Purchase Card Spending Categories

  18. 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

  19. DHA – Big Picture • MHS Consolidation ongoing • Shared Services with VA • Standardization • Centralization • Increasing Efficiencies

  20. 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

  21. 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

  22. The Latest in Acquisition PolicyGovernment-wide and Agency specific developments

  23. 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

  24. 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

  25. Budget and Federal Market Update

  26. 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

  27. 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

  28. Thank YouRoger WaldronPresidentrwaldron@thecgp.org202-331-0975Heather TarpleyVice President of Business Development & Saleshtarpley@thecgp.org202-315-1055

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