$40B RFP lays groundwork for health IT market

The health IT market is on the cusp of a growth period thanks to the NIH Chief Information Officer Solutions and Partners 3 program. But don't expect an explosion of spending.

Since August 2009, NITAAC has been working to hit the marketplace with its new GWAC. The Office of Management and Budget recertified in July NIH’s latest edition of its IT services GWAC, named the Chief information Officer Solutions and Partners 3 (CIO-SP 3). NITAAC also plans to award for the first time CIO-SP 3 Small Business. The GWACs are geared for health-related IT projects throughout the government. NITAAC now has one of the two requests for proposals ready for contractors.

Editor's note: This article was corrected at 12:00 p.m., Sept. 1, 2010.

Mary Armstead wanted something new and exciting to do. And she landed that job in April when she became director of the National Institutes of Health’s Information Technology Acquisition and Assessment Center.

NITAAC is launching its new $40 billion governmentwide acquisition contract just as health IT programs are getting more attention from agencies and more money from budget leaders.

“I was looking for something dynamic,” she said.

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The contracts will bring agencies a full set of IT resources as they work on various types of technology projects. But they will have a particular emphasis on agencies that are involved in health care and clinical and biological research, such as NIH and the Health and Human Services Department. The GWACs include IT services tailored for biomedical research, health sciences and healthcare, which may prove to be of particular interest in the coming years. (See sidebar.)

CIO-SP 3 is the successor contract to NIH’s Chief Information Officer Solutions and Partners 2 Innovations (CIO-SP2i) GWAC and its Image World 2 New Dimensions (IW2nd) GWAC, which expire in December. CIO-SP 3 will continue to support government IT efforts with a focus on health and biomedical IT services as the Obama administration moves ahead with its health programs and health care reforms take shape.

NITAAC officials have been clarifying and tightening language for the RFPs as they build the 10-year GWAC program aimed at the expanding arena of federal health IT initiatives. CIO-SP 3’s contract ceiling is estimated to be $20 billion, and the CIO-SP 3 Small Business will offer another $20 billion, officials said.

NIH brought in contracting experts to help structure the contract, said Tom Keith, associate director of NIH's Office of Logistics and Acquisition Operations.

NITAAC is expected to release its request for proposals and statement of work for the full-and-open CIO-SP 3 and the RFP for small businesses in September.

In the work statement, NITAAC listed biomedical research in the RFP's first task area. A company would help biomedical researchers and clinicians by performing health care systems studies and providing technical and maintenance services for information systems. A contractor would need to offer services in the area of bioinformatics, which combines statistics, computer sciences and the field of molecular biology, according to the CIO-SP 3 RFP.

The GWACs also will offer services related to storage and analysis of image documents, systems integration, cybersecurity, digital government services, enterprise management system controls, and software development, according to the RFP. Contractors also must have services to support day-to-day IT operations for CIOs.

“Any IT requirements can be fulfilled, can be competed through this contract,” said Rob Coen, deputy program director of NITAAC.

To qualify for the contract, a company must be able to work in all 10 task areas of the GWAC. Small companies must be able to work in two or three areas depending on the task order for the CIO-SP 3 Small Business, NITAAC officials said.

Health IT has quickly become an important field for the government and contractors as a result of the passage of health care reform.

The administration has proposed that agencies invest more money on health-related initiatives, experts say. Budget officials loosened their grip on funds for HHS and the Veterans Affairs Department to make those investments, said Lauren Jones, principal analyst of federal industry analysis program at Input.

Last year, agencies received no increases in funding, which is enough to keep the lights on but do little else to advance a program, and they received little if any money to break new ground, Jones said. But that’s changing.

“The money isn’t being held as hard — fists aren’t as tight — as the year before,” she said.

However, the market isn't a gold mine of good fortune or fast money. She said companies will need to stay in the federal health IT market a long time to get a return on their investment. Agencies are planning their first steps with the distant future in mind as they build the infrastructures for the prospects of health IT.

In fiscal 2011, agencies’ budgets will again be constrained, Jones said, but agencies will be planting important seeds.

HHS officials outline three major goals in a draft strategic plan for fiscal 2010 through fiscal 2015. They intend to transform the health care system, advance knowledge and improve health.

For example, to help foster innovation, the department intends to develop “computerized geography-based inventories of patient care services” to help patients determine what services are available at each site and how far they need to travel to nearby sites, according to the strategic plan.

In addition, HHS and VA have been building their electronic health records on an old infrastructure, which they upgraded as needed, Jones said. Officials are reassessing that architecture, which supports health records networks, to ensure it’s the infrastructure that's best suited for the demands of the future.

“All the more reason to be involved right here, right now,” Jones said.

Experts said companies recognize the opportunities opening with the CIO-SP 3 and CIO-SP 3 Small Business and are going to compete hard for a place on the GWAC.

As NITAAC's director in the age of health IT reforms, Armstead has the dynamic job she wanted. The health IT market is evolving, and NITAAC is ready to move forward with its new GWAC. As the agency fills spots on the new contract, Armstead will need to get customers' orders.

But she finds that work exciting — with a dash of pressure.

“We have to sell these orders in order to eat,” she said.