veterans affairs outlook fy 2017 -...

Veterans Affairs OutlookFY 2017

Angie Petty

Sr. Principal Research Analyst, Federal Industry Analysis

Ashley Sanderson

Manager, Research, Federal Information Solutions

November 10, 2016

Agenda

2 ©2016 Deltek, Inc. All Rights Reserved

Agency Overview

Budgetary Trends

Agency Spending Trends

Keys to Success

Agency Overview

11/10/20163 CONFIDENTIAL ©Deltek, Inc. All Rights Reserved

Strategic Goal #1

Empower veterans to improve their well-

being.

Objectives:

• Improve veteran wellness and economic

security.

• Increase customer satisfaction through

improvements in benefits and services

delivery policies, procedures and interfaces.

Strategic Goal #2

Enhance and develop trusted

partnerships.

Objectives:

• Enhance VA’s partnership with DOD.

• Enhance VA’s partnerships with federal,

state, private sector, academic affiliates,

Veterans Service Organizations, and non-

profit organizations.

• Amplify awareness of services, and benefits

available to veterans through improved

communications and outreach.

Mission and Strategic Goals

Strategic Goal #3

Manage and improve VA operations to deliver

seamless and integrated support.

Objectives:

• Make VA a place where people want to serve.

• Evolve VA information technology capabilities to

meet emerging customer service/empowerment

expectations of both VA customers and employees.

• Build a flexible and scalable infrastructure through

improved organizational design and enhanced

capital planning.

• Enhance productivity and improve efficiency of the

provision of veteran benefits and services.

• Ensure preparedness to provide services and

protect people and assets continuously and in time

of crisis.

VA’s Mission: To fulfill President Lincoln’s promise - “To care for

him who shall have borne the battle, and for his widow and his

orphan” by serving and honoring the men and women who are

America’s Veterans.

Component Organizations


Office of the

Secretary

Office of the

Asst Sec for

Mgt/ Interim

CFO

Office of the

Chief of Staff

Office of Govt

Relations

Office of Public

Affairs

Office of the

Asst Sec for

HR & Admin

Office of the

Asst Sec for

IT/CIO

Office of the Asst

Sec for Ops,

Security &

Preparedness

Office of

Inspector

General

Office of the

Asst Sec for

Policy &

Planning

Office of the

General

Counsel

Office of the

Under Sec for

Benefits (VBA)

Office of the

Under Sec for

Health (VHA)

Office of the

Under Sec fro

Memorial

Affairs (NCA)

Office of

Acquisition,

Logistics &

Construction

Federal Employment Trends

6

The total number of VA employees has grown dramatically since FY 2011 (49,100 people, a 16% increase). VA’s growing budget is driving the increase.

White collar positions dominate the job categories at VA.

88% of VA’s employees reside within the Veteran’s Health Administration.

57% of VA’s personnel perform medical, hospital, dental or public health job role.

Observations:

Total Employment, FY 2011 – 2015 Top 5 Occupations (as of December 2015)

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Budget and Contracting


Amount of potential or planned spending on vendors or

contractors in a company’s market space.

Contractual commitment made by the government for the

payment of goods and services. Payment may be made

immediately or in the future.

Portion of the budget that the president requests and

Congress controls through annual appropriation acts.

Discretionary Budget and Contracting –A 10-Year View


VA’s discretionary budget has been rising since FY 1996, to match expanding mission areas and increases in the number of

veterans and beneficiaries.

Most of the discretionary increase from FY 2015 to FY 2016 is due to the increase in medical services, specifically from the

Veterans Access, Choice and Accountability Act which allows veterans to receive medical care in the community where they

reside.

VA has remained consistently dependent on contractors over the last 10 years.

Observations:

Discretionary Budget Outlook, FY 2015-2017

9 CONFIDENTIAL ©Deltek, Inc. All Rights Reserved

Discretionary Budget, FY 2015 - 2017

Discretionary Budget by Bureau, FY 2017

The proposed VA discretionary budget totals $78.7B including $3.6B in medical care collections, a 4.9% increase over FY 2016 enacted levels and 5.0% increase when medical care collections are not included ($75.1B).

VA high level priorities include strengthening veterans’ benefits programs and eliminating the claims backlog, increasing access to health care including mental health services, simplifying the appeals process, enhancing cybersecurity, and modernizing information systems.

Most of the discretionary increase is due to the increase in medical services specifically the Care in the Community initiative to facilitate and streamline the ability for veterans to receive medical care in the community where they reside.

Budget Priorities:

% Change

FY 2016-2017

VHA (w/o collections) +6.4%

IT +3.4%

VBA +4.4%

Construction/Grants -44.7%

Other +19%

Contractor-Addressable Budget Outlook, FY 2015-2017

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Contractor Addressable Budgets, FY 2015 - 2017

Contractor-Addressable Budget -Top 5 Segments

Contractor and vendor dependence will

continue to remain strong from FY 2015

– FY 2017.

Look for contract spending in areas such

as medical care, mental health care,

telehealth, improving claims backlogs,

enhancing disability claims processing,

information technology enhancements,

and improved business processes.

Management and administrative

support, followed by consumables, and

medical services account for a large

portion of VA’s spending.

Budget Priorities:

Agency Spending Trends


Top VA Buying Organizations


Observations:

The Veterans Health Administration is responsible for

slightly more than half, 57%, of all spending from FY 13

to FY 16.

4 out of 5 of the top spending offices reside under the

Veterans Health Administration or Management.

Over the 4 year period the VA has spent a total of $80B

and seen an overall increase of a 5% CAGR.

Source: Deltek GovWin IQ Agency Profile

$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000

OFFICE OF THE INSPECTOR GENERAL

VETERANS BENEFIT ADMINISTRATION

NATIONAL CEMETERY SYSTEM

MANAGEMENT

VETERANS HEALTH ADMINISTRATION

Reported Obligations ($M)

FY 2013 - FY 2016 Top Agency Spending

FY 2016 FY 2015 FY 2014 FY 2013

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

VHA MEDICAL CENTERS ACQUISITION, LOGISTICS, ANDCONSTRUCTION

VA LEARNINGUNIVERSITY/OFFICE OFEMPLOYEE EDUCATION

ADMINISTRATION FINANCE

Rep

ort

ed O

blig

atio

ns

($M

)

FY 2013 - FY 2016 Top Office Spending

Top Agency Spending Categories

13

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Top PSCs Top NAICS

Drugs and Biologicals 325412 – Pharmaceutical

Preparation Manufacturing

Medical and Surgical Instruments,

Equipment, and Supplies

236220 – Commercial and

Institutional Building Construction

IT and Telecom- Other IT and

Telecommunications

541512 – Computer Systems

Design Services

Medical - Other 541519 – Other Computer

Related Services

Construction Of Hospitals and

Infirmaries

621111 – Offices of Physicians

(except Mental Health Specialists)

Source: Deltek

GovWin IQ Agency

Profile

Observations:

Medical & Scientific Equipment accounts for nearly half, or

43% of all spending from FY 13 to FY 16. Information

Technology and Heath Services are responsible for a

combined 30%, or $24B of spending.

Among our top 3 categories all have seen growth from FY

2013 to FY 2016. Medical & Scientific Equipment and IT

have seen a 5% CAGR, while Health Services saw

dramatic growth at 22% CAGR.

0 2,000 4,000 6,000 8,000 10,000 12,000

Professional Services

Architecture Engineering and Construction

Health Services

Information Technology

Medical & Scientific Equipment


FY 2013 - FY 2016

FY 2016 FY 2015 FY 2014 FY 2013

FY 2013 – FY 2016 Small Business Contracting

14 ©2016 Deltek, Inc. All Rights ReservedSource: Deltek GovWin IQ Agency Profile, FPDS

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

Unrestricted Restricted

Rep

ort

ed O

blig

atio

ns

($M

)

FY 2013 - FY 2016 Unrestricted Award Dollars

2013 2014 2015 2016

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

SDVOSB Small Business Not Reported Veteran 8(a) HubZone WOSB

Rep

ort

ed O

blig

atio

ns

($M

)

FY 2013 - FY 2016 Restricted Competition Award Dollars

2013 2014 2015 2016

3% Sole Sourced

2% Partial SB

Set Asides

7% Sole

Sourced26%

Competed2% Sole

Sourced

22% Economically

Disadvantaged

Observations:

From FY 13 to FY 16 $44B was spent through the use of VA Contract Vehicles. In contrast, only $9B was spent through the use of

GSA. 22% of the business spent through GSA schedules is for medical equipment through Schedule 65.

46%, or $20B, of the total spent so far on VA contract vehicles went towards the Pharmaceutical Prime Vendor vehicle from FY 2013 to

FY 2016.

Preferred Contract Vehicles


Source: Deltek GovWin

IQ Agency ProfileSource: Deltek GovWin

IQ Agency Profile

0 200 400 600 800

GSA SCHEDULE 874 MOBIS MISSION ORIENTEDBUSINESS INTEGRATED SERVICES

GSA SCHEDULE 621 I PROFESSIONAL AND ALLIEDHEALTHCARE STAFFING SERVICES

GSA SCHEDULE 36 OFFICE IMAGE AND DOCUMENTSOLUTIONS

GSA SCHEDULE 70 IT EQUIPMENT SOFTWARE ANDSERVICES

GSA SCHEDULE 65 II A MEDICAL EQUIPMENT ANDSUPPLIES


Top GSA Schedules

FY 2016 FY 2015 FY 2014 FY 2013

0 2,000 4,000 6,000

NETWORX UNIVERSAL

SEWP V - SOLUTIONS FOR ENTERPRISEWIDEPROCUREMENT V

SEWP IV - SOLUTIONS FOR ENTERPRISEWIDEPROCUREMENT IV

T4 - TRANSFORMATION TWENTY ONE TOTALTECHNOLOGY PROGRAM

PHARMACEUTICAL PRIME VENDOR


Top Contract Vehicles

FY 2016 FY 2015 FY 2014 FY 2013

0

5,000

10,000

15,000

20,000

25,000

VA797P12D0001 VA79113D0054 VA11811D1000 V797P6011B VA797P0191

Rep

ort

ed O

blig

atio

ns

($M

)

FY 2013 - FY 2016 Top Contracts

Major Contractors and Contracts


Observations:

30% of all awarded spending from FY 13 to FY 16 went to

the top five contractors. McKesson Corporation accounts

for 24% of awarded contract dollars, while the other top 4

contractors received 6% of spending from FY 13 to FY16.

The top VA vendor is also the sole contractor to hold the

top spending VA contract from FY 13 to FY 16,

Pharmaceutical Prime Vendors. The second top contract,

Patient Centered Community Care is coming up for

recompete in 2018.

Medical Surgical Prime

Vendor Program

Diagnostic X-

RayT4

Patient Centered

Community Care

Pharmaceutical

Prime Vendor

Source: Deltek GovWin IQ Agency Profile

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

MCKESSON CORPORATION LOCKHEED MARTIN CORPORATION CARDINAL HEALTH, INC. TRIWEST HEALTHCARE ALLIANCE CORP. KIEWIT-TURNER A JOINT VENTURE

Rep

ort

ed O

blig

atio

ns

($M

)

FY 2013 - FY 2016 Top Contractors

FY 2013 FY 2014 FY 2015 FY 2016

Opportunities to Watch


Requirement Type Program Name Value Solicitation Competition Type

Information Technology

Commodity Enterprise

Contract (CEC)$5.3B Mar. 2018

Service Disabled Veteran

Owned Small Business

Real Time Location

System National

Contract (RTLS)

$543M Apr. 2017Full and Open/

Unrestricted

Architecture Engineering

& Construction

Construction Services

Portland BLDG 100 and

101 Seismic Retrofit and

Renovation

$661M Oct. 2017 Undetermined

VISN MATOC IDIQ II $250M Jan. 2017Service Disabled Veteran

Owned Small Business

Health Services

Patient Centered

Community Care (PCCC)$9.4B Mar. 2018

Full and Open/

Unrestricted

Community Based

Outpatient Clinics

Southeastern Florida

$78M Jun. 2017Full and Open/

Unrestricted

Keys to Success


Prepare for uncertainty. Despite the Bipartisan Budget Act of 2015, which set top-line discretionary numbers, it remains to be seen whether the lame-duck session will produce a FY 2017 budget or another Continuing Resolution.

Plan for the transition. Support agency program managers as they prepare for the incoming administration. Align your business development strategies with the incoming administration’s policy platform.

Offer security and value. VA is expected to invest in additional cybersecurity initiatives especially to protect veteran data. Additionally, value, efficiency and effectiveness are key to winning acquisitions.

Defend your incumbency. Due to uncertain budgets, expect most spending to occur on existing programs, and operations and maintenance functions.

Team with small businesses. Veterans Affairs has one of the higher small business contracting goals at 32% and has met or come close to meeting this goal for the last five years.

Maximize Popular Contract Vehicles. Pharmaceutical Prime Vendor, T4 (T4NG), GSA Schedule 70, GSA Schedule 65 (medical equipment and supplies), and SEWP IV are VA’s most frequently used contract vehicles for goods and services.

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Insight 2016: Business Development TrackLeadership Development November 14th-17th at the

Gaylord National Harbor

Bus Dev Leadership Topics

including:

The Art of the Bid/No-Bid

Decision

Pipeline Management

IDIQ Contract Management

Building and Organizing a BD

Organization

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