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GovWin Federal Agency Planner Update – Veterans Affairs

Published: December 26, 2018

Architecture Engineering and ConstructionBudgetFederal Agency Account PlannerHealth Information TechnologyInformation TechnologyMedical & Scientific EquipmentPurchase or Lease of Facilities & EquipmentVA

BACKGROUND:

Account Planners are published on 100 select GovWin Federal Agency Profiles. The Planners serve as an overview of an agency’s complete profile, providing a high-level summary of the organization’s structure, budget and spending information, employment data, and strategic goals and objectives (when made available). The Planners are updated annually or if there is a significant change to an agency’s structure or strategic mission.  The following blog highlights notable differences observed when the Planner was last updated. In order to access any links below, a subscription that includes access to Deltek’s GovWin Federal Agency Profiles and Company Profiles is necessary.

Veterans Affairs:

Changes in Total Discretionary Budget – Deltek’s Agency Profiles use the President’s Budget Authorization, as opposed to the budget appropriations, to measure discretionary budget requests. The budget authorization specifies the total amount an agency is authorized to spend, while the budget appropriations signify the amount Congress will actually make available for any agency’s program during the budget authorization process. Because Congressional budget negotiations have resulted in continuing budget resolutions (funding agencies at the same appropriation level as the previous year) for well over 20 years, the Budget Authorization provides the best indication of the budget request changes from one year to the next.

Deltek measures changes in discretionary budget growth from the last full fiscal year which, in this case, FY 2017, through the budget request year, FY 2019.  During this period, the Veterans Affairs’ (VA) budget request increased 11.7%, growing from $77 billion in 2017 to $83 billion in 2019. The Veterans Health Administration (VHA) accounts for the majority of VA’s total budget over the three year budget period and was $75 billion of the $83 billion requested in 2019. FY 2019’s request is a 9% increase over 2017’s $67 billion actual budget authorization of 2017.

Growth in VA’s budget request is led by the Construction, Major Projects account which increased an astonishing 268% from $306 million in 2017 to $1.1 billion in 2019. The Construction, Major Projects account covers construction, alterations, extensions, and improvements to VA facilities. In 2019, major construction projects include medical facility projects at – St. Louise, MO; Canandaigua, NY; Dallas, TX; North Chicago, IL; and Oklahoma City, OK. The agency is also planning national cemetery expansion projects in Rittman, OH; Mims, FL; and Holly, MI.

At $1 billion, VHA presented the largest Construction, Major Projects request in FY 2019, followed by the National Cemetery Administration at $117 Million. The General Administration – Staff Offices requested $6 Million while the Veteran Benefits Administration did not request any major project authorization but did request minor construction funding.

Source: Deltek, OMB - President’s FY 2019 Budget Authorization

Changes in Contract Spending – Overall prime spending increased nearly 16% at VA from $24 billion to $27 billion in FY 2016 and FY 2017 respectively (the last two complete government fiscal years)*. Together, spending on Medical & Scientific Equipment and Health Services accounted for 66% of VA’s total prime spending, totaling $18 billion.

From a growth perspective, VA’s Purchase or Lease of Facilities & Equipment significantly outpaced all other spending categories, growing 171%. However, from a dollar perspective, reported prime spending for this category was just $15 million in 2017, far below the $10 billion reported in the Medical & Scientific Equipment category.

The Pharmaceutical Prime Vendor contract held by McKesson Corp., was the single largest contributing contract to the VA’s Medical & Scientific Equipment prime spending, which was $5.6 billion in 2017, approximately 56% of the Medical & Scientific Equipment total.

Health Services spending was driven by the Patient Centered Community Care (PCCC) contract out of the VHA. The contract is held by Health Net Federal Services and Triwest Healthcare Alliance Corp. PCCC accounted for 59%, approximately $5 billion, of 2017 total Health Services spending.

These two contracts made up 57%, approximately $10 billion, of total prime spending in the Medical & Scientific Equipment and Health Services spending categories, which as mentioned above were the largest spending categories for VA.

Changes in Employment – Between 2017 and 2018, VA’s civilian employee population decreased slightly, just under 1%. The agency reported having 382,602 civilian employees midway through the middle of fiscal year 2018. The Professional occupation category contained 334,232 employees, approximately 44% of VA’s total employee population. The Nurse subcategory, with 70,817 employees, made up approximately 42% of the Professional category.    

Nursing was the leading sub-occupation within the Professional occupation to add employees having added 1,170 employees, followed by Medical Officer and Social Work which added 191 employees each between 2017 and 2018. Blue Collar, Other White Collar, and Unspecified occupations, when combined, accounted for 4,374 agency losses between 2017 and 2018. The Blue Collar occupation accounted for 3,996 of these losses alone. However, led by Professional Services, Technical, Administrative, and Clerical added 6,664 employees resulting in a gain of 2,290 VA employees.

Changes in IT Budget Request – Beginning in FY2019, OMB instituted a change in reporting guidance for IT spending that resulted in the removal of certain grants from the IT budget request. This applied to grants awarded to state and local governments for IT systems used to administer Federal benefits because it is the State or local government that is responsible for development and maintenance of the systems, not the federal agency. While VA does provide some programs funding via grants, IT projects are funded via direct appropriations. Thus, no spending is absent from this year’s VA IT budget request.

VA’s largest program based on total investment is the Electronic Health Record Modernization. With a request of $1,214 million in 2019, the program is defined as - An EHR system that will serve Veterans as one common system providing a single, accurate lifetime health record. The Program was introduced on a limited basis last year with a budget of $7 million. In 2019, investment in the program has increased tremendously. VA requested $1,207 million, in Development, Modernization, and Enhancement – or vendor addressable money.      

Exhibit 53 (The President's Annual Information Technology Budget Request) is divided into two pools of money. Operation and Maintenance (O&M) is money requested for existing programs, while Development, Modernization, and Enhancement (DME) is money requested for new programs, and indicates the addressable market for IT vendors. In FY 2019, VA’s top DME programs are as follows.

  • Electronic Health Record Modernization - DME: $1,207 Million     Total: $1,214 Million
  • Health Management Platform – DME: $104.29 Million    Total $163.42 Million
  • Financial Management – DME: $85.98 Million    Total $94.53 Million
  • Enterprise Security Services – DME: $80.42 Million    Total: $428.22 Million

Changes in the Leading Contractors – With the exception of three contractors, the layout of VA’s top contractor landscape completely shifted between FY 2016 and 2017. The top two contractors, McKesson Corp, and Triwest Healthcare Alliance held the top spots in both years respectively. Leidos also maintained its position having reported the fourth most VA prime spending both years. Of the remaining top contractors, Four Points Technology, Accenture, Fresenius USA Marketing and Dell did not rank amongst the top vendors in 2016.

The third-ranked contractor, Health Net only moved up two spots, but its VA reported spending grew a whopping 330% between 2016 and 2017, from $442 million to $1.8 billion. The remaining contractors Booze Allen Hamilton and Total Renal Care Holdings also improved their positions compared to the previous year with VA reported spending increasing 45% and 50% respectively.

The reported prime obligations of the top 10 vendors totaled $12.5 billion in 2017, which accounted for approximately 46% of VA’s 2017 total and was nearly level with 53% of the total in 2016.  Combined, McKesson Corp. and Triwest Healthcare Alliance accounted for $8.5 billion, 31%, of VA’s total reported spending.

Source: Deltek, FPDS

To explore more in-depth federal spending and budget data as well as opportunities, contracts, and task orders specific to this agency please visit the Veterans Affairs Federal Agency Profile or download the entire Veterans Affairs  Agency Planner.

* This report uses fiscal years 2016 and 2017 as the last complete fiscal years. OMB rules allow DOD agencies a 90-day grace reporting period following each fiscal quarter thus complete spending data for the fiscal year 2018 will not be available until early in the new calendar year.