36C24420Q0590-001.docx

36C24420Q0590

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1. REQUISITION NO.

2. CONTRACT NO.

3. AWARD/EFFECTIVE DATE

4. ORDER NO.

5. SOLICITATION NUMBER

6. SOLICITATION ISSUE DATE

a. NAME

b. TELEPHONE NO. (No Collect Calls)

8. OFFER DUE DATE/LOCAL

TIME

9. ISSUED BY

CODE

10. THIS ACQUISITION IS

UNRESTRICTED OR

SET ASIDE:

% FOR:

SMALL BUSINESS

HUBZONE SMALL

BUSINESS

SERVICE-DISABLED

VETERAN-OWNED

SMALL BUSINESS

WOMEN-OWNED SMALL BUSINESS

(WOSB) ELIGIBLE UNDER THE WOMEN-OWNED

SMALL BUSINESS PROGRAM

EDWOSB

8(A)

NAICS:

SIZE STANDARD:

11. DELIVERY FOR FOB DESTINA-

TION UNLESS BLOCK IS

MARKED

SEE SCHEDULE

12. DISCOUNT TERMS

13a. THIS CONTRACT IS A

RATED ORDER UNDER

DPAS (15 CFR 700)

13b. RATING

14. METHOD OF SOLICITATION

RFQ

IFB

RFP

15. DELIVER TO

CODE

16. ADMINISTERED BY

CODE

17a. CONTRACTOR/OFFEROR

CODE

FACILITY CODE

18a. PAYMENT WILL BE MADE BY

CODE

TELEPHONE NO.

DUNS:

DUNS+4:

PHONE:

FAX:

17b. CHECK IF REMITTANCE IS DIFFERENT AND PUT SUCH ADDRESS IN OFFER 18b. SUBMIT INVOICES TO ADDRESS SHOWN IN BLOCK 18a UNLESS BLOCK BELOW IS CHECKED

SEE ADDENDUM

19.

20.

21.

22.

23.

24.

ITEM NO.

SCHEDULE OF SUPPLIES/SERVICES

QUANTITY

UNIT

UNIT PRICE

AMOUNT

(Use Reverse and/or Attach Additional Sheets as Necessary)

25. ACCOUNTING AND APPROPRIATION DATA

26. TOTAL AWARD AMOUNT (For Govt. Use Only) 27a. SOLICITATION INCORPORATES BY REFERENCE FAR 52.212-1, 52.212-4. FAR 52.212-3 AND 52.212-5 ARE ATTACHED. ADDENDA

ARE

ARE NOT ATTACHED.

27b. CONTRACT/PURCHASE ORDER INCORPORATES BY REFERENCE FAR 52.212-4. FAR 52.212-5 IS ATTACHED. ADDENDA

ARE

ARE NOT ATTACHED

28. CONTRACTOR IS REQUIRED TO SIGN THIS DOCUMENT AND RETURN _______________

29. AWARD OF CONTRACT: REF. ___________________________________ OFFER

COPIES TO ISSUING OFFICE. CONTRACTOR AGREES TO FURNISH AND

DATED ________________________________. YOUR OFFER ON SOLICITATION

DELIVER ALL ITEMS SET FORTH OR OTHERWISE IDENTIFIED ABOVE AND ON ANY

(BLOCK 5), INCLUDING ANY ADDITIONS OR CHANGES WHICH ARE

ADDITIONAL SHEETS SUBJECT TO THE TERMS AND CONDITIONS SPECIFIED

SET FORTH HEREIN IS ACCEPTED AS TO ITEMS:

30a. SIGNATURE OF OFFEROR/CONTRACTOR 31a. UNITED STATES OF AMERICA (SIGNATURE OF CONTRACTING OFFICER) 30b. NAME AND TITLE OF SIGNER (TYPE OR PRINT) 30c. DATE SIGNED 31b. NAME OF CONTRACTING OFFICER (TYPE OR PRINT) 31c. DATE SIGNED

AUTHORIZED FOR LOCAL REPRODUCTION

(REV. 2/2012)

PREVIOUS EDITION IS NOT USABLE

Prescribed by GSA - FAR (48 CFR) 53.212

7. FOR SOLICITATION

INFORMATION CALL:

STANDARD FORM 1449

OFFEROR TO COMPLETE BLOCKS 12, 17, 23, 24, & 30

SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS

36C24420Q0590 05-06-2020 William Schlobohm 878 271 6639 05-20-2020 11:59pm EST 00244 Department of Veterans Affairs Network Contracting Office 4

X X 621399 $8 Million N/A X VISN 4 VAMCs (See Performance Work Statement)

00244 Department of Veterans Affairs Network Contracting Office 4

Refer to VAAR: 852.233-72 (Electronic Submission of Payment Req) https://www.fsc.va.gov/einvoice.asp

(877) 353-9791

(512) 460-5429 See CONTINUATION Page Contractor to provide Pharmacy Fill Services for VISN 4 in accordance with the Performance Work Statement.

Award is intended to be a 5-year Firm Fixed Priced IDIQ.

The IDIQ will serve as an Indefinte Delivery Vehicle and funding and authorization to proceed will be provided via task orders placed against this IDIQ, contingent upon the availability of VA funding.

Intended Award effective date: 8/1/20 Intended Award expiration date: 7/31/2025 This is a FAR Part 13 procurement. Any questions shall be emailed to William.Schlobohm2@va.gov no later than 3 days prior to solicitation due date.

Refer to "Additional Instructions to Offerors" for important information as it pertains to this soliciation.

$0.00 See CONTINUATION Page Determined at Task Order level X X Table of Contents

See attached document: Attachment A - Locations.

See attached document: Attachment B - Pharm First Fill - QASP DRAFT.

See attached document: Attachment C Pharm First Fill.

See attached document: Attachment D RECORDS MANAGEMENT OBLIGATIONS - First Pharm Fill.

SECTION B - CONTINUATION OF SF 1449 BLOCKS

B.1 CONTRACT ADMINISTRATION DATA

1. Contract Administration: All contract administration matters will be handled by the following individuals:

a. CONTRACTOR:

b. GOVERNMENT: Contracting Officer 36C244 Department of Veterans Affairs Network Contracting Office 4

2. CONTRACTOR REMITTANCE ADDRESS: All payments by the Government to the contractor will be made in accordance with:

3. INVOICES: Invoices shall be submitted in arrears:

4. GOVERNMENT INVOICE ADDRESS: All Invoices from the contractor shall be submitted electronically in accordance with VAAR Clause 852.232-72 Electronic Submission of Payment Requests.

Refer to VAAR: 852.233-72 (Electronic Submission of Payment Req) https://www.fsc.va.gov/einvoice.asp ACKNOWLEDGMENT OF AMENDMENTS: The offeror acknowledges receipt of amendments to the Solicitation numbered and dated as follows:

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B.2 PERFORMANCE WORK STATEMENT

Description of Service

The VISN 4 Veterans Affairs Medical Centers is seeking a Contractor to provide pharmacy benefit management first fill services. Contractor shall fill first time prescriptions for VISN 4 VA patients seen at the associated Community Based Outreach VA Clinics (CBOCs/Clinics), VA Emergency Rooms within VISN 4 VA Medical Center catchment areas (Attachment A) and VA Choice Program as required by the Department of Veterans Affairs. Will also provide medication counseling per Omnibus Budget Reconciliation Act of 1990 requirements (OBRA-90).

Locations Covered

See Attachment A of solicitation

Additional geographic areas may be added to this contract by mutual agreement, as services are needed for new CBOCs/Clinics in the service areas covered. Contract requirements and rates will be as stated in the proposal and subsequent contract.

Scope of Work

Contractor shall provide a list of potential pharmacies that fit the demographic requirements (within five (5) miles of the CBOCs/Clinic and Emergency Departments listed in the attached). From this list, the VA will choose which pharmacies they would like to use for the services based on location, parking, and other veteran convenience factors as determined by the VA Health Care System

After a selection has been made, the Contractor shall create custom networks such that only the chosen pharmacies for each CBOC can be used for prescriptions from the providers from that CBOC/Clinic. The CBOCs/Clinics operating hours are normally 8:00 a.m. to 4:30 p.m. Eastern Standard Time, Monday-Friday, excluding federal holidays.

Federal holidays are:

· New Year’s Day

· Martin Luther King Jr Birthday

· President’s Day

· Memorial Day

· Independence Day

· Labor Day

· Columbus Day

· Veterans Day

· Thanksgiving Day

· Christmas Day

In addition, the services outlined above will be provided for patients of the noted VA facilities. These services shall be provided for patients seen in the VA Emergency Department. Unless prior approval is requested by VA Pharmacy Management members, these services shall be available ONLY from 7:30am to 08:30pm Eastern Standard Time - with the exception that on Saturdays and Sundays, these services will be available 24 hours a day.

As outlined above, the Contractor shall provide a list of potential pharmacies within five (5) miles of the VA Health Care facilities noted in Attachment A. From this list, the VAMC will choose which pharmacy they would like to use for the services based on location, parking and other veteran convenience factors. After a selection has been made, the Contractor shall create a custom network such that only the chosen pharmacy.

General Requirements

Prescription Fill Process

Contract pharmacy will fill and dispense original prescriptions that are written by VA providers assigned to the VISN 4 VA Health Care System and CBOCs/Clinics.

Prescriptions to be filled will be presented to the contract pharmacy on a consult form for non-controlled substances. This form will have the certificate information listed at the top and the prescription information to follow. This consult will have a "wet" signature from the VA provider. For controlled substances (CII – CIV) the consult will also be accompanied by a hand-written prescription on VA Form 10-2577F. Pharmacists will be able to provide a verbal prescription in urgent situations (non-controlled substances). Should the state in which the dispensing pharmacy operate require other than the VA Form 10-2577F, Security Prescription Form, it will be the Contractor’s responsibility to provide the facility VA Health Care, Chief of Pharmacy, with the proper security form. The successful Contractor may obtain a sample of each VA Form from the COR.

VA has developed a list of prescription drug products that are pre-approved to be sent to contract pharmacy for veterans. This list is known as the “Emergent Drug List" (EDL) and designates the days supply amount allowable for the given drug. The facility VAs will be responsible for updating, maintaining, and providing copies of the EDL to the Contractor. The EDL will be updated no more often than every six (6) months in an attempt to minimize database maintenance efforts by the Contractor.

Prescriptions filled and dispensed through emergent fill contracts will be limited to medications of urgent need as determined by VA clinical staff and will follow safe and effective formulary management principles practiced within the VA. This may include adjudication of medications on a case-by-case basis as defined by local medical center procedure. VA will maintain an emergent drug list of medication the contractor may fill without prior authorization. The Chief of Pharmacy or designee will email this “emergent drug list” to the Contractor at the time of contract award and provide updates to the list as necessary. There shall be a mechanism in place, provided by the Contractor, to provide real-time messaging and hard edits to the pharmacies in order to limit dispensed medications to the specified “emergent drug list” and to prevent medications that require prior authorization from being dispensed. Medications not on the “emergent drug list” will not be filled and dispensed without prior approval by authorized VA pharmacy personnel.

Non-emergent medications (i.e., Viagra, any expendable stock/supply items [non-drug products], cosmetics, over-the-counter medications, nutritional supplements, vitamins or herbal supplements) as identified by not being on the provided VA Formulary are not to be dispensed by the pharmacy.

This process is only for new, on-time prescriptions. No refills will be authorized.

Reimbursement shall be determined by the average wholesale price (AWP) discounted by the applicable Contractor percentage plus the applicable dispensing fee as specified in B.3 Price Schedule. The total price charged to the VISN 4 VAs shall not exceed that AWP charged to the general public and shall not exceed the price charged by the Contractor’s lowest third-party reimbursement plan.

Prescriptions shall be filled with generic drugs to the extent permitted by law. Generic drugs shall be dispensed if in the professional judgment of the pharmacist, the substitute product is available, safe, effective, and to the greatest extent possible, contains the same chemical ingredients of the same strength, quantity, and dosage of the brand name.

All generic products used must be in compliance with Federal and State requirements. Brand name drugs will only be reimbursed if no AB rated generic form of the drug exists in the marketplace.

“AB rated” means that drugs that have been proven to meet the necessary bioequivalence requirements through in vivo and/or in vitro testing compared to a reference standard that is currently approved. AB is the most common designation. Drugs coded as AB under a specific product heading are considered therapeutically equivalent only to other drugs coded as AB under that heading. Thus, products in this category are considered to be generic drugs. However, an AB-rated product may carry an individual brand name. Under no circumstances may an AB-rated generic product use the patented brand name of the reference standard.

VA beneficiaries will pick up their own prescriptions at the dispensing pharmacy. No prescriptions are to be mailed. No prescriptions are to be delivered. Prescription should be filled within two (2) hours with no more than a twenty-four (24) hour delay if necessary to obtain the drug. The prescription must be picked up by the patient and may not be mailed. Veterans will not be charged a prescription or medication co-pay.

In the event of a circumstance that requires a telephone order to be taken, the Pharmacist taking the order shall Repeat the Order (also known as Read Back) to the prescriber and assure their concurrence with the repeated order. All changes or clarifications to a prescription order which required communication with the patient’s provider shall be confirmed by “REPEATING THE ORDER”, the change or clarification, to assure accuracy.

In a disaster situation, if a patient presents with a prescription from a VA provider, can have said prescription filled within a 30-day period.

If the contract pharmacy is having difficulty with any claim or any other situation, they will contact the contractor. The contract pharmacy will not contact employees of the noted VA. If it is determined that a claim for a non-EDL medication was not approved, the contract pharmacy will refer the veteran to contact their VA healthcare provider.

Updates of providers (additions/deletions) will typically take from 24 to 48 hours, depending on when the changes are entered into the system and the system update cycle. However, the contractor will attempt to expedite the process whenever possible.

The contractor shall not make authorizations to the contracted pharmacies for prescriptions that fall outside of the normal constraints as stated within. If this occurs, the contractor will be responsible for reimbursing the local pharmacy for the prescription.

VA reserves the right to fill any prescription through the use of its own resources and/or personnel.

Medications shall be dispensed with a maximum 14-day supply (unless repackaging is not an option, example: insulin, oral inhalers, etc.

Specific Requirements:

The contractor shall offer patients counseling from a Pharmacist for each prescription filled. Counseling offered shall be consistent with the Board of Pharmacy requirements to ensure appropriate use and optimal outcomes from drug therapy. The counseling shall include, but is not limited to:

1. Name, description and use of medication.

2. Dose, dosage, form and route

3. Special directions and precautions

4. Common side effects and action required if side effects occur

5. Techniques for self-monitoring drug therapy

6. Action to be taken if a dose is missed

7. Proper storage

8. What the patient can expect from the medication

9. The balance of the patient’s prescribed medication shall be mailed from the VA Pharmacy.

Pharmacy hours shall be furnished by the contractor. The minimum allowable hours are Monday through Friday, 8:00 a.m. to 6:00 p.m. Pharmacy hours will preferably be each day from 8:00 a.m. to 9:00 a.m.

The contractor shall provide Registered Pharmacists who shall collect, synthesize, and interpret patient prescription, and disease data.

Checks for factual and potential drug related problems, including (but not limited to):

1. Therapeutic duplication

2. Drug-disease contraindications

3. Drug-drug interactions (including interactions with over the counter drugs)

4. Incorrect drug dosage

5. Drug-allergy interactions’

Identify, clarity and resolve drug related problems with the prescriber and patient.

Be available to answer any drug related questions that a patient may have after the prescription is filled. Treat all patients with dignity, courtesy and respect. Waiting times for prescription dispensing shall be 30 minutes on average but shall not exceed two hours.

Government Responsibilities:

Government shall be responsible for quality assurance and monitoring of the contractor performance. This may include, but not limited to: Kickoff meeting, quarterly meetings and/or site visits. If quarterly meetings are required, this will be accomplished vial teleconference. Contractor will be notified at least 10 days prior to the meeting.

The VAMC will provide contractor designee with all the provider names for each VA facility location and their respective DEAs that are being used (or will notify if a provider does not use a DEA). VA DEA numbers may be utilized for some providers at some locations.

Reporting Requirements:

Contractor shall provide monthly summary (for each contracted Pharmacy or VA CBOC/Clinic) via encrypted email to VA Pharmacy Service detailing the following information for services provided:

1. Patient name and address

2. Medication name and strength

3. Quantity dispensed

4. NDC (National Data Code)

5. Prescription Number

6. Prescription Cost

7. Prescriber Name

8. Days’ Supply

9. VA Location

10. Number of patients utilizing contract

Monthly reports must be sent electronically encrypted to the COR no later than the 14th of the following month.

Contractor will be available to provide quarterly telephone conference calls to review monthly reports, trends, provider data, prescription totals, etc.

Contractor will be available to provide a yearly in-person meeting or telephone conference call to review the prior fiscal year data.

Quality Assurance

The contractor shall provide for quality control/performance improvement purposes the following information:

(a) All medication errors and medication related incidents will be recorded and investigated and reported to the VA on a quarterly basis. Medication errors or events that result in required hospitalization, clinical intervention, or significant negative events will be reported to the VA immediately.

(b) Customer complaints/suggestions/compliments shall be recorded and reported to the VA on a quarterly basis (or more frequently) if a significant problem occurs.

Billing Audits

Pharmacy Service at the VA facility shall review the monthly statements provided by the contractor regarding fills at the local emergent fill pharmacies. Should the VAMC find discrepancies in the billing, a request will be made by the VA to the contractor to provide a copy of the consult in question. If the consult in question is not able to be produced within 10 calendar days, the contractor will adjust the statement by the amount in question. This review process will only be available for 90 days after the date of the prescription fill in question. Thus, the contract pharmacies will only be required to keep the hard copies available for 90 days.

Labeling

All prescriptions must have proper auxiliary labels attached and appropriate counseling and drug interaction sheets provided to VA beneficiaries.

Privacy Requirements

The contractor shall comply with the requirements of the Federal Privacy Act of 1974 (Public Law 93-579), HIPAA (Public Law 104-191), and the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1972 (Public Law 83-255), as well as other statues regarding confidentiality of patient information during and after the execution of the IDIQ.

The contractor and the contracted pharmacies shall keep all information concerning VA beneficiaries confidential and shall not release or disclose information to any person, except as authorized in writing and according to all applicable laws.

The contractor shall not store patient information on a mobile device. A verbal contact is sufficient to obtain prior authorization when needed. The contactor is prohibited from transferring Personnel Health Information (PHI) by fax or email to and/or from a VA facility.

The contracted pharmacies including subcontracted pharmacies that are authorized to fill prescriptions must agree to the following conditions:

1. All information concerning VA beneficiaries shall be kept confidential and shall not be disclosed to any person, except as authorized in writing from VA, and according to all applicable laws.

2. Representatives of VA are authorized to visit the contractor’s sites and the premises of any pharmacy filling VA prescriptions during regular business hours for the purposes of auditing and evaluation, which may include the inspection of clinical records.

3. The contractor shall report all adverse drug events reported by VA beneficiaries to the VISN 4 VA facility Health Care System Chief of Pharmacy, VA Contracting Officer, VA Contracting Officer’s Representative (COR), and to the prescribing CBOC/Clinic provider, or Emergency Room provider.

4. Pharmaceutical services provided to VA beneficiaries shall meet all standards applicable to Medicaid recipients in the State where services are provided, and standards set forth in the current version of The Joint Commission accreditation manual for Ambulatory Care/Pharmaceutical Services.

Licensing and Qualification Requirements

Pharmacies utilized by the contractor shall be in good standing with their respective State Board of Pharmacy in Pennsylvania, New Jersey, Delaware and Ohio.

Pharmacies utilized by the contractor shall have a current Drug Enforcement Administration (DEA) license, controlled substance license, and license from the respective State Board of Pharmacy.

Pharmacists Requirements:

· Graduate of an Accreditation Council for Pharmacy Education (ACPE) College of Pharmacy

· Licensed in the States of Pennsylvania, New Jersey, Delaware and Ohio and in good standing with the State Board of Pharmacy.

Pharmacy Requirements:

· Licensed pharmacy in the States of Pennsylvania, New Jersey, Delaware and Ohio

· Current DEA, controlled substance license

Business Associate Agreement

BAA will be required for this contract since the contractor will have access to PHI and the services are not related to treatment. The Privacy Officer will need to be notified once the contract is awarded so it can be determined if a National BAA exists or we need to execute a local BAA.

The Health Insurance Portability and Accountability Act of 1996 (HIPPA) requires that patient lists, names of patients, and any information concerning patients, are considered privileged information and shall not be disclosed or revealed in any way for use outside the VA. The Contractor is subject to the same penalties and liabilities for unauthorized disclosures of such information as the VA. Patient confidentiality will be adhered to at all times.

As Contractor personnel will potentially have access to any patient information related to their performance of duties under this contract, Contractor shall make its personnel aware that any such information that they might become aware of during the course of their performance is considered privileged information and shall not be disclosed or revealed in any way outside communications with VISN 4 facility COR and pharmacists.

Service Contract Labor Standards Requirements

Work performed by the following personnel related to Contractor and contract pharmacies is applicable to FAR Subpart 22.10 (Service Contract Labor Standards) and such shall follow U.S Department of Labor Wage Determinations:

12250 – Pharmacy Technician CONTRACTOR IS RESPONSIBLE FOR CORRECT WAGE TITLE CLASSIFICATIONS OF THEIR EMPLOYEES AND COMPLIANCE WITH ALL APPLICABLE WAGE AND HOUR LAWS.

AWP Pricing Methodology

The Contractor’s pricing shall be based on MediSpan, one of the leading national drug-pricing systems used in the pharmaceutical industry. A contractor’s pricing methodology/system is based on the IT platform of its PBM (Pharmacy Benefits Management) claim adjudication system. The contractor’s claim system is linked to MediSpan, which allows them to monitor and adjust to pharmaceutical industry pricing on a daily basis, thereby providing the VA with the most current pricing available.

B.3 PRICE SCHEDULE (OFFEROR SHALL COMPLETE ALL PRICING FILLABLE INFORMATION BELOW) (A CO may designate representatives and alternate representatives to place orders against this contract. Ordering officers (OOs) will be authorized to place orders against this contract. The Contracting Officer (CO) will furnish the Contractor with the names of individuals authorized as OOs, by separate memorandum upon issuance of the contract. When OOs are added after award, the CO will furnish the Contractor with the names of individuals authorized as OOs, by memorandum upon OO appointment. OOs are responsible for issuing and administering orders placed under this contract. OOs have no authority to modify any term of this basic contract. Any deviation from the terms of the basic contract must be approved in writing by the CO responsible for this contract. The Contractor shall accept orders against this contract only from the CO and/or authorized OOs. Fulfilling orders from persons other than the CO or OO may result in loss or delay in payment for supplies/services provided under such orders.)

Note: The Government shall order the below specified guaranteed minimum contract value of services and shall order up to and including the below specified maximum contract value of services through task orders under this basic IDIQ contract during the duration of the contract to include all periods. The maximum amount under this contract is not guaranteed.

IDIQ contract Minimum $ 1,000.00 IDIQ contract Maximum $8,000,000.00 *Note 1 –refer to Attachment C of this solicitation for estimated number of claims per VA facility. These claims are not fixed and are simply an estimate and are subject to change. Also, within Attachment C, both Wilmington and Coatesville estimated number of claims are combined.

*Note 2 – Pricing evaluation will be based off of the dispense fee and discounts off the Average Wholesale Price (AWP) (3 fillables below).

DISPENSE FEE - $______ (FILLABLE SHALL BE COMPLETED BY OFFEROR, REQUIRES A DOLLAR FIGURE) AWP % DISCOUNT FOR BRAND NAME - %______ (FILLABLE SHALL BE COMPLETED BY OFFEROR, REQUIRES A % FIGURE) AWP % DISCOUNT FOR GENERIC - %______ (FILLABLE SHALL BE COMPLETED BY OFFEROR, REQUIRES A % FIGURE)

ITEM/CLIN INFORMATION

Pharmacy fill services for VISN 4 VA Clinics and Community Hospitals in accordance with the Performance Work Statement

SECTION C - CONTRACT CLAUSES

C.1 IT CONTRACT SECURITY

VA INFORMATION AND INFORMATION SYSTEM SECURITY/PRIVACY

1. GENERAL

Contractors, contractor personnel, subcontractors, and subcontractor personnel shall be subject to the same Federal laws, regulations, standards, and VA Directives and Handbooks as VA and VA personnel regarding information and information system security.

2. ACCESS TO VA INFORMATION AND VA INFORMATION SYSTEMS

a. A contractor/subcontractor shall request logical (technical) or physical access to VA information and VA information systems for their employees, subcontractors, and affiliates only to the extent necessary to perform the services specified in the contract, agreement, or task order.

b. All contractors, subcontractors, and third-party servicers and associates working with VA information are subject to the same investigative requirements as those of VA appointees or employees who have access to the same types of information. The level and process of background security investigations for contractors must be in accordance with VA Directive and Handbook 0710, Personnel Suitability and Security Program. The Office for Operations, Security, and Preparedness is responsible for these policies and procedures.

c. Contract personnel who require access to national security programs must have a valid security clearance. National Industrial Security Program (NISP) was established by Executive Order 12829 to ensure that cleared U.S. defense industry contract personnel safeguard the classified information in their possession while performing work on contracts, programs, bids, or research and development efforts. The Department of Veterans Affairs does not have a Memorandum of Agreement with Defense Security Service (DSS). Verification of a Security Clearance must be processed through the Special Security Officer located in the Planning and National Security Service within the Office of Operations, Security, and Preparedness.

d. Custom software development and outsourced operations must be located in the U.S. to the maximum extent practical. If such services are proposed to be performed abroad and are not disallowed by other VA policy or mandates, the contractor/subcontractor must state where all non-U.S. services are provided and detail a security plan, deemed to be acceptable by VA, specifically to address mitigation of the resulting problems of communication, control, data protection, and so forth. Location within the U.S. may be an evaluation factor.

e. The contractor or subcontractor must notify the Contracting Officer immediately when an employee working on a VA system or with access to VA information is reassigned or leaves the contractor or subcontractor's employ. The Contracting Officer must also be notified immediately by the contractor or subcontractor prior to an unfriendly termination.

3. VA INFORMATION CUSTODIAL LANGUAGE

a. Information made available to the contractor or subcontractor by VA for the performance or administration of this contract or information developed by the contractor/subcontractor in performance or administration of the contract shall be used only for those purposes and shall not be used in any other way without the prior written agreement of the VA. This clause expressly limits the contractor/subcontractor's rights to use data as described in Rights in Data - General, FAR 52.227-14(d) (1).

b. VA information should not be co-mingled, if possible, with any other data on the contractors/subcontractor's information systems or media storage systems in order to ensure VA requirements related to data protection and media sanitization can be met. If co-mingling must be allowed to meet the requirements of the business need, the contractor must ensure that VA's information is returned to the VA or destroyed in accordance with VA's sanitization requirements. VA reserves the right to conduct on site inspections of contractor and subcontractor IT resources to ensure data security controls, separation of data and job duties, and destruction/media sanitization procedures are in compliance with VA directive requirements.

c. Prior to termination or completion of this contract, contractor/ subcontractor must not destroy information received from VA, or gathered/ created by the contractor in the course of performing this contract without prior written approval by the VA. Any data destruction done on behalf of VA by a contractor/subcontractor must be done in accordance with National Archives and Records Administration (NARA) requirements as outlined in VA Directive 6300, Records and Information Management and its Handbook 6300.1 Records Management Procedures, applicable VA Records Control Schedules, and VA Handbook 6500.1, Electronic Media Sanitization. Self-certification by the contractor that the data destruction requirements above have been met must be sent to the VA Contracting Officer within 30 days of termination of the contract.

d. The contractor/subcontractor must receive, gather, store, back up, maintain, use, disclose and dispose of VA information only in compliance with the terms of the contract and applicable Federal and VA information confidentiality and security laws, regulations and policies. If Federal or VA information confidentiality and security laws, regulations and policies become applicable to the VA information or information systems after execution of the contract, or if NIST issues or updates applicable FIPS or Special Publications (SP) after execution of this contract, the parties agree to negotiate in good faith to implement the information confidentiality and security laws, regulations and policies in this contract.

e. The contractor/subcontractor shall not make copies of VA information except as authorized and necessary to perform the terms of the agreement or to preserve electronic information stored on contractor/subcontractor electronic storage media for restoration in case any electronic equipment or data used by the contractor/subcontractor needs to be restored to an operating state. If copies are made for restoration purposes, after the restoration is complete, the copies must be appropriately destroyed.

f. If VA determines that the contractor has violated any of the information confidentiality, privacy, and security provisions of the contract, it shall be sufficient grounds for VA to withhold payment to the contractor or third party or terminate the contract for default or terminate for cause under Federal Acquisition Regulation (FAR) part 12.

g. If a VHA contract is terminated for cause, the associated BAA must also be terminated and appropriate actions taken in accordance with VHA Handbook 1600.01, Business Associate Agreements. Absent an agreement to use or disclose protected health information, there is no business associate relationship.

h. The contractor/subcontractor must store, transport, or transmit VA sensitive information in an encrypted form, using VA-approved encryption tools that are, at a minimum, FIPS 140-2 validated.

i. The contractor/subcontractor's firewall and Web services security controls, if applicable, shall meet or exceed VA's minimum requirements. VA Configuration Guidelines are available upon request.

j. Except for uses and disclosures of VA information authorized by this contract for performance of the contract, the contractor/subcontractor may use and disclose VA information only in two other situations: (i) in response to a qualifying order of a court of competent jurisdiction, or (ii) with VA's prior written approval. The contractor/subcontractor must refer all requests for, demands for production of, or inquiries about, VA information and information systems to the VA contracting officer for response.

k. Notwithstanding the provision above, the contractor/subcontractor shall not release VA records protected by Title 38 U.S.C. 5705, confidentiality of medical quality assurance records and/or Title 38 U.S.C. 7332, confidentiality of certain health records pertaining to drug addiction, sickle cell anemia, alcoholism or alcohol abuse, or infection with human immunodeficiency virus. If the contractor/subcontractor is in receipt of a court order or other requests for the above mentioned information, that contractor/subcontractor shall immediately refer such court orders or other requests to the VA contracting officer for response.

l. For service that involves the storage, generating, transmitting, or exchanging of VA sensitive information but does not require C&A or an MOU-ISA for system interconnection, the contractor/subcontractor must complete a Contractor Security Control Assessment (CSCA) on a yearly basis and provide it to the COR.

4. INFORMATION SYSTEM DESIGN AND DEVELOPMENT

a. Information systems that are designed or developed for or on behalf of VA at non-VA facilities shall comply with all VA directives developed in accordance with FISMA, HIPAA, NIST, and related VA security and privacy control requirements for Federal information systems. This includes standards for the protection of electronic PHI, outlined in 45 C.F.R. Part 164, Subpart C, information and system security categorization level designations in accordance with FIPS 199 and FIPS 200 with implementation of all baseline security controls commensurate with the FIPS 199 system security categorization (reference Appendix D of VA Handbook 6500, VA Information Security Program). During the development cycle a Privacy Impact Assessment (PIA) must be completed, provided to the COR, and approved by the VA Privacy Service in accordance with Directive 6507, VA Privacy Impact Assessment.

b. The contractor/subcontractor shall certify to the COR that applications are fully functional and operate correctly as intended on systems using the VA Federal Desktop Core Configuration (FDCC), and the common security configuration guidelines provided by NIST or the VA. This includes Internet Explorer 7 configured to operate on Windows XP and Vista (in Protected Mode on Vista) and future versions, as required.

c. The standard installation, operation, maintenance, updating, and patching of software shall not alter the configuration settings from the VA approved and FDCC configuration. Information technology staff must also use the Windows Installer Service for installation to the default "program files" directory and silently install and uninstall.

d. Applications designed for normal end users shall run in the standard user context without elevated system administration privileges.

e. The security controls must be designed, developed, approved by VA, and implemented in accordance with the provisions of VA security system development life cycle as outlined in NIST Special Publication 800-37, Guide for Applying the Risk Management Framework to Federal Information Systems, VA Handbook 6500, Information Security Program and VA Handbook 6500.5, Incorporating Security and Privacy in System Development Lifecycle.

f. The contractor/subcontractor is required to design, develop, or operate a System of Records Notice (SOR) on individuals to accomplish an agency function subject to the Privacy Act of 1974, (as amended), Public Law 93-579, December 31, 1974 (5 U.S.C. 552a) and applicable agency regulations. Violation of the Privacy Act may involve the imposition of criminal and civil penalties.

g. The contractor/subcontractor agrees to:

(1) Comply with the Privacy Act of 1974 (the Act) and the agency rules and regulations issued under the Act in the design, development, or operation of any system of records on individuals to accomplish an agency function when the contract specifically identifies:

(a) The Systems of Records (SOR); and

(b) The design, development, or operation work that the contractor/ subcontractor is to perform;

(1) Include the Privacy Act notification contained in this contract in every solicitation and resulting subcontract and in every subcontract awarded without a solicitation, when the work statement in the proposed subcontract requires the redesign, development, or operation of a SOR on individuals that is subject to the Privacy Act; and

(2) Include this Privacy Act clause, including this subparagraph (3), in all subcontracts awarded under this contract which requires the design, development, or operation of such a SOR.

h. In the event of violations of the Act, a civil action may be brought against the agency involved when the violation concerns the design, development, or operation of a SOR on individuals to accomplish an agency function, and criminal penalties may be imposed upon the officers or employees of the agency when the violation concerns the operation of a SOR on individuals to accomplish an agency function. For purposes of the Act, when the contract is for the operation of a SOR on individuals to accomplish an agency function, the contractor/subcontractor is considered to be an employee of the agency.

(1) "Operation of a System of Records" means performance of any of the activities associated with maintaining the SOR, including the collection, use, maintenance, and dissemination of records.

(2) "Record" means any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, education, financial transactions, medical history, and criminal or employment history and contains the person's name, or identifying number, symbol, or any other identifying particular assigned to the individual, such as a fingerprint or voiceprint, or a photograph.

(3) "System of Records" means a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.

i. The vendor shall ensure the security of all procured or developed systems and technologies, including their subcomponents (hereinafter referred to as "Systems"), throughout the life of this contract and any extension, warranty, or maintenance periods. This includes, but is not limited to workarounds, patches, hotfixes, upgrades, and any physical components (hereafter referred to as Security Fixes) which may be necessary to fix all security vulnerabilities published or known to the vendor anywhere in the Systems, including Operating Systems and firmware. The vendor shall ensure that Security Fixes shall not negatively impact the Systems.

j. The vendor shall notify VA within 24 hours of the discovery or disclosure of successful exploits of the vulnerability which can compromise the security of the Systems (including the confidentiality or integrity of its data and operations, or the availability of the system). Such issues shall be remediated as quickly as is practical, but in no event longer than 3 days.

k. When the Security Fixes involve installing third party patches (such as Microsoft OS patches or Adobe Acrobat), the vendor will provide written notice to the VA that the patch has been validated as not affecting the Systems within 10 working days. When the vendor is responsible for operations or maintenance of the Systems, they shall apply the Security Fixes within 3 days.

l. All other vulnerabilities shall be remediated as specified in this paragraph in a timely manner based on risk, but within 60 days of discovery or disclosure. Exceptions to this paragraph (e.g. for the convenience of VA) shall only be granted with approval of the contracting officer and the VA Assistant Secretary for Office of Information and Technology.

5. INFORMATION SYSTEM HOSTING, OPERATION, MAINTENANCE, OR USE

a. For information systems that are hosted, operated, maintained, or used on behalf of VA at non-VA facilities, contractors/subcontractors are fully responsible and accountable for ensuring compliance with all HIPAA, Privacy Act, FISMA, NIST, FIPS, and VA security and privacy directives and handbooks. This includes conducting compliant risk assessments, routine vulnerablity scanning, system patching and change management procedures, and the completion of an acceptable contingency plan for each system. The contractor's security control procedures must be equivalent, to those procedures used to secure VA systems. A Privacy Impact Assessment (PIA) must also be provided to the COR and approved by VA Privacy Service prior to operational approval. All external Internet connections to VA's network involving VA information must be reviewed and approved by VA prior to implementation.

b. Adequate security controls for collecting, processing, transmitting, and storing of Personally Identifiable Information (PII), as determined by the VA Privacy Service, must be in place, tested, and approved by VA prior to hosting, operation, maintenance, or use of the information system, or systems by or on behalf of VA. These security controls are to be assessed and stated within the PIA and if these controls are determined not to be in place, or inadequate, a Plan of Action and Milestones (POA&M) must be submitted and approved prior to the collection of PII.

c. Outsourcing (contractor facility, contractor equipment or contractor staff) of systems or network operations, telecommunications services, or other managed services requires certification and accreditation (authorization) (C&A) of the contractor's systems in accordance with VA Handbook 6500.3, Certification and Accreditation and/or the VA OCS Certification Program Office. Government- owned (government facility or government equipment) contractor-operated systems, third party or business partner networks require memorandums of understanding and interconnection agreements (MOU-ISA) which detail what data types are shared, who has access, and the appropriate level of security controls for all systems connected to VA networks.

d. The contractor/subcontractor's system must adhere to all FISMA, FIPS, and NIST standards related to the annual FISMA security controls assessment and review and update the PIA. Any deficiencies noted during this assessment must be provided to the VA contracting officer and the ISO for entry into VA's POA&M management process. The contractor/subcontractor must use VA's POA&M process to document planned remedial actions to address any deficiencies in information security policies, procedures, and practices, and the completion of those activities. Security deficiencies must be corrected within the timeframes approved by the government. Contractor/subcontractor procedures are subject to periodic, unannounced assessments by VA officials, including the VA Office of Inspector General. The physical security aspects associated with contractor/ subcontractor activities must also be subject to such assessments. If major changes to the system occur that may affect the privacy or security of the data or the system, the C&A of the system may need to be reviewed, retested and re- authorized per VA Handbook 6500.3. This may require reviewing and updating all of the documentation (PIA, System Security Plan, Contingency Plan). The Certification Program Office can provide guidance on whether a new C&A would be necessary.

e. The contractor/subcontractor must conduct an annual self assessment on all systems and outsourced services as required. Both hard copy and electronic copies of the assessment must be provided to the COR. The government reserves the right to conduct such an assessment using government personnel or another contractor/subcontractor. The contractor/subcontractor must take appropriate and timely action (this can be specified in the contract) to correct or mitigate any weaknesses discovered during such testing, generally at no additional cost.

f. VA prohibits the installation and use of personally-owned or contractor/ subcontractor-owned equipment or software on VA's network. If non-VA owned equipment must be used to fulfill the requirements of a contract, it must be stated in the service agreement, SOW or contract. All of the security controls required for government furnished equipment (GFE) must be utilized in approved other equipment (OE) and must be funded by the owner of the equipment. All remote systems must be equipped with, and use, a VA-approved antivirus (AV) software and a personal (host-based or enclave based) firewall that is configured with a VA-approved configuration. Software must be kept current, including all critical updates and patches. Owners of approved OE are responsible for providing and maintaining the anti-viral software and the firewall on the non-VA owned OE.

g. All electronic storage media used on non-VA leased or non-VA owned IT equipment that is used to store, process, or access VA information must be handled in adherence with VA Handbook 6500.1, Electronic Media Sanitization upon: (i) completion or termination of the contract or (ii) disposal or return of the IT equipment by the contractor/subcontractor or any person acting on behalf of the contractor/subcontractor, whichever is earlier. Media (hard drives, optical disks, CDs, back-up tapes, etc.) used by the contractors/ subcontractors that contain VA information must be returned to the VA for sanitization or destruction or the contractor/subcontractor must self-certify that the media has been disposed of per 6500.1 requirements. This must be completed within 30 days of termination of the contract.

h. Bio-Medical devices and other equipment or systems containing media (hard drives, optical disks, etc.) with VA sensitive information must not be returned to the vendor at the end of lease, for trade-in, or other purposes. The options are:

(1) Vendor must accept the system without the drive;

(2) VA's initial medical device purchase includes a spare drive which must be installed in place of the original drive at time of turn-in; or

(3) VA must reimburse the company for media at a reasonable open market replacement cost at…