A competitive procurement is currently in progress for the next iteration of FSC’s software development contract. The solicitation was posted on February 6, 2025 and is anticipated to be awarded in April 2025. To ensure there is adequate time to award a new contract and allow for transition (if necessary), the Department of Veterans Affairs (VA) Technology Acquisition Center announced plans to issue a short term task extension.
VA has proposed a sole source action is for a four month extension to task order 36C10B20N10060036 issued under Transformation Twenty-One Total Technology Next Generation (T4NG) Contract VA118-16-D-1006 for Financial Services Center (FSC) Software Development Services with Favor TechConsulting, LLC (FTC)[acquired by Tria Federal in January 2022].
VA requires a four-month extension for the current FSC Software Development Services task order in order to avoid a gap in service and provide the time necessary to transition services to a new competitive contract. The current task order supports FSC’s ability to provide the necessary Information Technology (IT) infrastructure, software engineering, Electronic Commerce, and system support services required to provide high-quality financial services for VA and Other Government Agencies (OGAs). The scope of the task order includes project management, research and assessment, development guidelines, technical services, software development and deployment support to the FSC including software engineering, software development, and system solution architect expertise to perform system development life cycle (SDLC) tasks in the development of applications and systems. The Contractor also provides Tier 3 system sustainment support, production and analytical support for the over 100 in-house applications developed to support VA FSC initiatives.
FSC began working on the requirements for a competitive procurement to recompete the current task order, and submitted its initial draft acquisition package in April 2024. However, due to a significant cybersecurity attack targeting Optum Change Healthcare Systems that was ongoing from February 2024 through October 2024, FSC was unable to definitize the technical requirements for the recompete effort. Specifically, Optum Change Healthcare processes between 50% and 65% of U.S. healthcare claims, and the cybersecurity attack which occurred on February 21, 2024 resulted in a complete shutdown of operations across their clearinghouse platforms. This unprecedented disruption profoundly impacted personnel, claims submission, payment processing, and overall revenue cycle management for VA, as Optum Change Healthcare is integral to processing VA healthcare claims. While FSC worked diligently to restore the necessary financial and operational interfaces, which included identifying the breach, isolating affected systems, and conducting a thorough investigation to understand the scope and impact, system reconstruction and recovery efforts ultimately took over seven months. During this time, the Performance Work Statement (PWS) for the new procurement could not be finalized, as the scope and technical requirements for future FSC Software Development Services were dependent on this resolution. Specifically, the requirements for the follow-on procurement would have needed to be expanded significantly to include the development of an in-house clearinghouse solution as an alternative to Optum, if the restoration efforts were not successful.
Additionally, a new 508 compliance directive (VA and NCA Directive 6221). was issued in October 2024. FSC was required to validate that the PWS for the new procurement fully conformed with this new Directive, which requires all enterprise financial management systems to meet Section 508 accessibility standards before being deployed into production. As a result of the need to ensure compliance with this new Directive, the PWS scope and technical requirements required additional changes and reviews prior to being finalized. Furthermore, on November 6, 2024, FSC received a request from the Deputy Assistant Secretary for Financial Management Business Transformation Service (FMBT) to revise the requirements for the new Software Development Services procurement to include additional services to support new requirements for FMBT implementation and migration. While FSC immediately created draft requirements language for the PWS, it was also necessary to revise acquisition documentation to support this change to the requirements. Due to these events that directly impacted the scope and technical requirements for the new competitive FSC Software Development Services procurement, the acquisition package was not finalized until December 10, 2024. As a result, the release of the solicitation was delayed and the anticipated award of the new contract will not occur prior to the expiration date of the current task order, as was originally anticipated when the acquisition package was submitted in April 2024.
The current task order was awarded with a 12-month base period with four (4) 12-month option periods. The last option period is set to expire on March 9, 2025. Furthermore, once the competitive award is executed, the transition of services is expected to take at least 60 days for a new vendor to onboard its staff, including at least 30 days to receive the necessary access and obtain Government Furnished Equipment (GFE) as well as an additional 30 days to assume the ongoing development work, which is required for performance of the contract.
As a result, VA faces a gap in service for this critical support if the current task order expires on March 9, 2025. A break in service for FSC Software Development Services would be disastrous, not only for VA but also for OGAs, that utilize these IT systems in order to provide financial services and payments to Veterans. The period of performance for this extension will be March 10th 2025 through July 9th 2025.
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