By Daniel Beaird
Navigating government healthcare contracts
Government contracts can be big and bulky, and the processes can be lengthy. But the product is pretty much the same as it is in the commercial healthcare equipment marketplace.
“And people are people,” said Bob Charron, vice president, government and contractor sales, CME Corp. “They all have different angles about how they buy and why they want to buy, but the biggest challenge of the federal marketplace, specifically, is the contracting rules and regulations.”
The sales cycle is longer because there’s more administrative work to be done and rules to follow. But the VA is a lot like other hospital systems. All healthcare providers want to buy a product that’s going to work for their patients, their staff and bring them good overall value.
“If you can get in front of a customer, you’ve got a much better shot at selling something in the VA space than if you don’t get in front of a customer, just like in a commercial hospital system,” he said.
Like a commercial health system, there’s consistent engagement between the sectors involved on the needs and wants in every department.
“Physicians and nurses communicate with their civilian counterparts on best practices to search for solutions to patient problems,” said Parker Bigley, executive vice president, Optimal and MedPro Associates. “And that doesn’t come in a vacuum.”
The federal government’s spend on medical supplies was $8.2 billion in fiscal year 2021 and $5.5 billion in fiscal year 2022. Nearly 98% of that falls within four departments – Defense (DoD), Veterans Affairs (VA), Health and Human Services (HHS) and Homeland Security (DHS).
“There are some similar structures to commercial hospitals with value groups and clinicians involved,” Bigley said. “But once a decision is made that a product is as good or equal to what’s being sought out and it fits a certain pricing criteria, it becomes about how to move it through the system.”
Getting in the system
“You have a price that gets you in the game,” Bigley said. “When they do large volume purchases, they are very keen on pricing and it’s very important. But there are contracting rules around how you set prices with the federal government.”
The VA Federal Supply Schedule (FSS) establishes long-term government-wide contracts that allow VA facilities and other government agencies to acquire a vast array of medical equipment, supplies, services and pharmaceuticals directly from commercial suppliers.
VA Schedules are indefinite delivery/indefinite quantity type contracts awarded to pre-approved vendors using full and open competition. The FSS negotiates firm-fixed pricing based on a commercial “most favored customer” pricing concept, including an option for economic price adjustments.
With approximately $19 billion in annual sales, the FSS provides federal customers with access to over 1 million commercial products and services.
Entities like the Small Business Association’s (SBA) socioeconomic classifications for business have set asides for doing business with the federal government. For example, an opportunity might arise for a service-disabled and veteran-owned small business where only those businesses can submit an offer to a particular request. So, there are many different things to consider.
“You must be detail oriented and understand the contract requirements to some degree,” Charron said. “You must understand what the federal acquisition regulation (FAR) is and what they’re looking for. Often, it’s more about best value, which could include technical, pricing and other considerations that may not be clearly stated.”
He says you need to understand how you can build an offer that brings the government value that’s more than just the lowest price. According to the VA, some important questions to consider before preparing a solicitation include:
- Do the products and/or services we offer fit under a VA Schedule solicitation?
- Can we compete with current Schedule contractors?
- Do we have the time and resources to dedicate towards submitting a package and administrating and marketing the contract after award?
- Are my products trade agreements clause compliant?
- Can we offer our best value to the government?
Factors considered for a best value determination include price, past performance record, trade-in considerations, delivery terms, socioeconomic status, special features of the supply/service required for effective performance, quality of the proposed solutions and cost differentials, warranty policy, return goods policy and expertise of the offeror.
To qualify for a VA FSS contract, a firm should:
- Be able to demonstrate that your firm is responsible.
- Meet all the requirements of the solicitation.
- Be able to fulfill all contract obligations outlined in the solicitation.
“If you’re doing things correctly with how you’re billing and how you’re working, the U.S. government is the best payer in the world,” Bigley said.
A great customer
They pay and they pay on time, according to Bigley. If they don’t have the funding for it, they can’t have a purchase order for it legally. “They’re a great customer once you figure out how to navigate it,” he said. “Whatever they’re committed to, they’re consistent with it.”
Projects can be long and there can be a “hurry up and wait” factor but once the decision is made by the U.S. government to buy product or services then it’s just about finding a way to move through the system efficiently.
But being a VA Schedule contractor doesn’t guarantee sales. Awarded contractors are expected to market their company and Schedule contract to the federal marketplace while competing with other Schedule contractors for requirements issued by ordering activities.
“There are contracting rules around how you set prices with the federal government,” Bigley said. “And that has to be organized and compliant with the federal acquisition regulation.”
MedPro actively sells into the DoD, VA, Indian Health Service and Federal Bureau of Prisons for its manufacturer partners. They are able to provide elevated product awareness at both the nationwide and end user levels. They have security requirements to access facilities and the ability to move new products through committees.
Navigating protocols
Bigley says his connections in the federal government are often in touch with him seeking different data points from different healthcare suppliers to determine how they want to propose an RFP when they’re researching a new area.
“You have to navigate the contracting structure and at the same time, cultivate clinical acceptance and thought to have your products in position to be considered,” he said.
“There are a lot of similarities to calling on the commercial healthcare sector once you get in front of the customer,” he added. “But there’s a protocol on how to get on a military base, for example.”
That involves being registered and credentialed and having an appointment, and depending on the base or facility, having limited access to certain areas.
“You can’t just drive by and show up,” Bigley said. “You have to plan out your call and coordinate with somebody inside the facility to get in and then present your opportunity.”
The Federal Acquisition Regulation (FAR)
The Federal Acquisition Regulation (FAR) is a set of rules and procedures that govern how the government buys goods and services. It ensures uniformity and transparency in the acquisition process, aiming to provide the government with the best value for its money. The FAR is jointly issued and maintained by the DoD, the General Services Administration (GSA) and the National Aeronautics and Space Administration (NASA).
The full text of the FAR is available on the acquisition.gov website. It can also be found in the Code of Federal Regulations (CFR).
Executive Order and the FAR
President Trump signed an executive order in April pertaining to federal procurement arguing “the FAR has swelled to more than 2,000 pages of regulations, evolving into an excessive and overcomplicated regulatory framework and resulting in an onerous bureaucracy.” It sets to reform the FAR within 180 days of the executive order that was signed on April 15, 2025. The order includes:
- Within 15 days of the order, each agency exercising procurement authority pursuant to the FAR shall designate a senior acquisition or procurement official to work with the Administrator and the FAR Council to ensure agency alignment with FAR reform and to provide recommendations regarding any agency-specific supplemental regulations to the FAR.
- Within 20 days, the director of the Office of Management and Budget, in consultation with the Administrator, shall issue a memorandum to agencies that provides guidance regarding the implementation of this order.
- The memorandum shall propose new agency supplemental regulations and internal guidance that promote expedited and streamlined acquisitions.
- The Administrator and the FAR Council shall issue deviation and interim guidance, as appropriate and consistent with applicable law, until final rules reforming the FAR are published.