SOW Fort Harrison Anatomic Pathology Amended 0001.docx

Statement of Work Anatomical Pathology Services

1.0 Background

The purpose of this Statement of Work (SOW) is to procure Anatomical Pathology Services from a qualified Reference Laboratory (hereafter Contractor) for the Montana Veterans Affairs Medical Center (MTVAMC), Pathology and Laboratory Medicine Services (P&LMS) 3687 Veterans Drive Fort Harrison MT 59636. The period of service is July 1, 2026, to June 30, 2031. Services will be provided by the Contractor at the Contractor’s facility.

MTVAMC currently lacks an additional Histopathology Technician to cover duties when the primary technician is unavailable. As a result, contractor services are needed to handle the fixation, embedding, staining, cutting, and coverslipping of specimens to prepare tissue slides for the pathologist's final diagnosis. Additionally, contractor services must include access to a licensed consulting pathologist for the processing and interpretation of surgical and cytological specimens, as required.

The Contractor shall provide all labor, supplies, equipment, maintenance, information technology, and supervision necessary to provide reference laboratory services to the MTVAMC described herein.

A. Reference laboratory services include, but are not limited to:

a. Specimen preparation and storage.

b. Grossing description

c. Fixation, embedding, staining, cutting and coverslipping of specimens.

d. Consultative services.

e. Quality control activities.

B. All Contractor’s testing shall be executed in accordance with standard industry practices. It is preferred that test methods are FDA approved. Any non-FDA approved method being performed shall have a disclaimer and documented validation plan. Upon request, the validation plan and validation results shall be made available to the POC or designee.

C. The Contractor shall ensure the accurate and timely performance of anatomical pathology and cytology testing services on all biomedical materials.

2.0 Specimen Testing

A. The Contractor shall, process, fix, embed, stain, cut, and coverslip the specimens, provide pathological analysis, and report findings in a reasonable time frame, as noted below.

B. Surgical and cytological specimens shall be processed 24 hours upon receipt. If need pathologist interpretations for surgical and cytology specimens shall be reported in less than or equal to two (2) days. Procedures include, but are not limited to, the following (by CPT code) performed at the Contractor’s laboratory:

a. 88321: Basic Consultation slides

b. 88323: Basic Consultation Blocks

c. 88312: Acid Fast/Gram/Fungus/PAS with Diastase

d. 88313: Congo Red/GMS

e. 88300: Surgical Path Level I Gross Exam only

f. 88302: Surgical Path Level II Gross/Micro

g. 88304: Surgical Path Level III Gross/Micro

h. 88305: Surgical Path Level IV Gross/Micro

i. 88307: Surgical Path Level V Gross/Micro

j. 88309: Surgical Path Level VI Gross/Micro

k. 88312: Special Stains Group 1, including Interpretation and Report

l. 88313: Special Stains Group 2, including Interpretation and Report

m. 88342: Immunohistochemistry or Immunocytochemistry + Immunoperoxidase Stain

n. 89060: Crystal Identification by Light Microscopy

o. 88173: Eval of FNA; Interpretation &Report

p. 88311: Decalcification C. Histology. The contractor shall process, perform preliminary gross examination (either submitted entirely or as representative sections as necessary, fix, embed, stain, cut, and coverslip to the specimens and then return the specimen to MTVAMC.

D. Staining. Upon receipt of tissue specimens, the Contractor shall embed, perform a Hematoxylin & Eosin (H&E) stain, perform a single cut of the specimen, and affix it to a slide with coverslip.

NOTE: The Contractor must offer the Technical Component separately form the Professional Component on both their test menu and the bill of charges.

NOTE: New tests not listed must be added to the contract though modification by the Contracting Officer prior to the specimen being tested. The Contractor shall notify the Contracting Officer and the Point of Contact (POC) or designee of any test information modifications no earlier than two weeks prior to the desired implementation date of the test change.

3.0 Specimen Preparation, Storage and Retention for Reference Testing Specimens A. The Contractor shall provide necessary material involved in processing the specimens.

B. The Contractor shall be responsible for storing specimens in such a manner to ensure the integrity of the specimen.

C. All Anatomic Pathology materials (e.g., histology blocks, slides, diagnostic and remaining tissues, specimen containers and reports) generated by the VA shall be returned within 2 days after processed or final diagnosis is reported.

D. The Contractor shall be responsible for storing specimens in such a manner to ensure the integrity of the specimen.

Contractor shall provide supplies for biomedical materials to be transported from the originating facility to the Contractor’s laboratory. These supplies shall include, but may not be limited to:

a. Test request forms.

4.0 Specimen Retention

A. All Anatomic Pathology materials (e.g., histology blocks, slides or other diagnostic material) generated by the VA shall be returned within 2 days after processed or final diagnosis is reported.

5.0 Reporting Results

A. The results of testing if applicable shall be reported within the prescribed turnaround times provided by MTVAMC as part of the test information.

B. The Anatomic Pathology report must be issued as Secure Fax or paper final copy.

C. Each test report shall, at least, include the following information:

a. Patient's full name

b. Patient’s identification number, e.g. social security number (SSN)

c. Physician’s name (if supplied)

d. Government laboratory accession number (if supplied)

e. Submitting facility name

f. Submitting facility account number

g. Test(s) ordered

h. Date/time of specimen collection

i. Collection site

j. Brief patient history that is provided

k. Date/time test completed

l. Test result

m. CPT code

n. SNOMED code

o. Reference laboratory accession number if applicable

p. Name and address of testing laboratory

q. Any other information the laboratory has that may indicate a questionable validity of test results.

r. Specimen inadequacy shall be reported with documentation supporting its unsuitability for testing.

6.0 Customer Service

1. The Contractor shall provide customer service that is accessible by telephone service Monday through Friday, 8:00 am – 4:00 pm Mountain Time, to assist Government staff for tracking and resolving related issues/problems that may arise in the performance under this contract.

1. Upon award, the Contractor shall provide the name(s) and telephone number(s) of contractor employees who will address the following customer services throughout the contract performance period:

1. Telephone Inquiries – Telephone inquiries are divided into four major categories with additional subcategories defining the type of inquiry and the Government’s minimum time expectation for meeting this service.

1. Specimen Collection

1. Routine inquiries, questions and clarifications regarding collection requirements shall be addressed at the time of the initial call.

1. Esoteric inquiries, questions and clarifications regarding collection requirements that require further research shall be addressed within ½ hour of the initial call.

1. Testing

2. Inquiries regarding the status of pending orders shall be addressed at the time of the initial call.

2. Esoteric inquiries when information is requested regarding methodology, correlation, interferences, reflex tests, etc. shall be addressed within two hours of the initial call.

1. Technical Expertise

3. Test utilization inquiries where information is required as to the most appropriate test to be ordered shall be addressed within two business hours of initial call.

3. Result interpretation inquiries shall be addressed within four business hours of initial call.

1. Consultative services where information is required regarding the clinical significance of tests shall be addressed within twenty-four business hours of the initial call.

1. Account follow-up

5. Information general in nature yet specific to the account, e.g. test pricing, equipment repair, supply ordering, etc. shall be addressed within four hours of the initial call.

1. The Contractor shall notify the originating laboratory by telephone of specimens cancelled due to unacceptability for reasons relating to volume, specimen container, identification, loss of specimen, etc.

7.0 Consultative Services/Utilization Reports

1. Contractor shall prove consultative services that are consistent with the services offered to other contracted customers without compensation. These services may include consultations by laboratory professionals or experienced physicians on test or methodology selection or test result interpretation.

1. Contractor shall provide a statistical analysis of the Government facilities’ workload testing volumes to assist in the monitoring of ordering trends and utilization patterns and will make recommendations to the facilities on mechanisms to reduce their costs.

1. Contractor shall provide a cumulative workload summary report of tests performed. The summary must include the test name/description, monthly test volume, year-to-date test volume, unit test cost, monthly test expenditures and year-to-date test expenditures.

2. The report shall be delivered electronically to the POC or designee by the 10th of the month following the close of the reporting month.

2. All reports shall be submitted in electronic spreadsheet format.

8.0 Special Contract Requirements

A. Services

a. Monitoring of contractors’ performance shall be demonstrated through clinical and administrative reviews. The POC will be responsible for verifying contract compliance. The POC will monitor services through one or a combination of the following mechanisms:

b. The POC will monitor Contractor performance to ensure that services called for in the SOW have been received by VA in a timely manner. Any incidents of Contractor noncompliance as evidenced by the monitoring procedures will be forwarded immediately to the Contracting Officer.

c. Documentation of services performed will be reviewed prior to certifying payment. The POC will perform periodic spot checks on all documents and record all findings. VA will pay only for services provided. Contract monitoring and recordkeeping procedures will be sufficient to ensure proper payment and allow audit verification of the services provided.

d. The POC will provide a written statement annually to the Contracting Officer to include a summary of Contractor actions and a statement that all requirements of the contract have been fulfilled as agreed. This summary evaluation will be submitted 45 days prior to expiration of contract (and/or prior to election of option year renewals, if applicable).

e. The Contractor shall not, under any circumstances, furnish reports directly to patients.

f. The Contractor shall be CLIA certified and confirm that they are a covered entity. In accordance with VA Directive and Handbook 6500.6, Appendix A, a Business Associate Agreement is required.

g. The Contractor must comply with all Joint Commission, College of American Pathologists, and VHA Handbook 1106.01 requirements.

B. Qualifications/Requirements of Laboratory & Contractor Personnel

a. Laboratory

i. The Contractor must comply with all Joint Commission, College of American Pathologists, and VHA Handbook 1106 requirements.

ii. The Contractor shall continuously hold a Certificate of Compliance or Certificate of Accreditation from the Centers for Medicare & Medicaid Services as meeting the requirements of the Clinical Laboratory Improvement Amendments of 1988 or must demonstrate accreditation by a regulatory agency(s) with deemed status from the Centers for Medicare & Medicaid Services, e.g. The College of American Pathologists, and/or other state regulatory agencies, as appropriate, and as mandated by federal and state statutes. The Contractor must maintain valid certifications during the entire performance period of this contract.

iii. The Contractor shall maintain safety and health standards consistent with the requirements set forth by the Occupational, Health, and Safety Administration (OSHA), and the Center for Disease Control (CDC) and Prevention.

b. Personnel

i. The Contractor shall ensure all testing and supervisory personnel at the reference laboratory assigned to work under this contract meet and maintain the applicable personnel qualifications set forth under the Clinical Laboratory Improvement Amendments (CLIA) of 1988 regulations, the College of American Pathology (CAP) accreditation standards, or other accrediting organizations and State standards.

ii. The Contractor shall ensure its employees can perform the applicable duties consistent with their license and certification.

iii. Any new requirements for mandatory education and/or competency reassessment, which occur during the contract period, must be completed by the individual contractor employee(s) within VA established timeframes.

iv. The work will be performed at the contractor’s location of business, excluding any specialized testing requiring specimens to be sent out.

c. HIPAA Compliance

i. Contractor shall adhere to the provisions of Public Law 104-191, Health Insurance Portability and Accountability Act (HIPAA) of 1996 and the National Standards to Protect the Privacy and Security of Protected Health Information (PHI). As required by HIPAA, the Department of Health and Human Services (HHS) has promulgated rules governing the security and use and disclosure of protected health information by covered entities, including the Department of Veterans Affairs (VA). The Contractor shall prove to the MTVAMC that they are identified as healthcare providers and that the PHI is being disclosed and/or used for treatment. BAA is required for Contractor Services.

d. Contract Performance Monitoring

i. Monitoring of contractors’ performance shall be demonstrated through clinical and administrative reviews. The POC will be responsible for verifying contract compliance. POC will monitor services through one or a combination of the following mechanisms:

ii. The POC will monitor Contractor performance to ensure that services called for in the SOW have been received by VA in a timely manner. Any incidents of Contractor noncompliance as evidenced by the monitoring procedures will be forwarded immediately to the Contracting Officer.

iii. Documentation of services performed will be reviewed prior to certifying payment. The POC will perform periodic spot checks on all documents and record all findings. VA will pay only for services provided. Contract monitoring and recordkeeping procedures will be sufficient to ensure proper payment and allow audit verification of the services provided.

iv. The POC will provide a written statement annually to the Contracting Officer to include a summary of Contractor actions and a statement that all requirements of the contract have been fulfilled as agreed. This summary evaluation will be submitted 45 days prior to expiration of contract (and/or prior to election of option year renewals, if applicable).

e. Quality Control Program

i. The Contractor shall maintain a Quality Control Program related to Reference Laboratory services covered under this contract. This program must minimally address the quality aspects representative to the testing process, i.e. pre-analytical, analytical and post-analytical variables and include a description of monitoring and evaluation activities. The contractor will meet or communicate with the MTVAMC staff for process review and improvement of contract performance on an as needed basis.

ii. The Contractor will notify the performing provider and MTVAMC Laboratory Leadership for all new malignancies within 2 business days. The new malignancy report will contain all required SNOMED and CPT codes in accordance with VA Handbook 1106.

iii. The Contractor will provide monthly quality assurance reports.

iv. The Contractor will provide an annual evaluation of statistical data to include:

1. Cytology cases examined.

2. Specimens are processed by specimen type.

3. Patient cases reported by diagnosis.

4. Gynecologic cases where cytology and histology are discrepant.

f. Security Requirements

i. Contractor shall adhere to the provisions of Public Law 104-191, Health Insurance Portability and Accountability Act (HIPAA) of 1996 and the National Standards to Protect the Privacy and Security of Protected Health Information (PHI). As required by HIPAA, the Department of Health and Human Services (HHS) has promulgated rules governing the security and use and disclosure of protected health information by covered entities, including the Department of Veterans Affairs (VA). The Contractor shall prove to the MTVAMC that they are identified as healthcare providers and that the PHI is being disclosed and/or used for treatment.

C. Government-Furnished Equipment (GFE)/Government-Furnished Information (GFI).

a. MTVAMC will provide the Health Record for issuing pathology reports.

b. Other Pertinent Information or Special Considerations.

c. Specimens may require additional specialized staining.

d. Identification of Possible Follow-on Work:

i. Community Hospital Pathologists may encounter the need to order follow-on testing and have tissue blocks and/or slides sent to another reference laboratory for additional analysis.

e. Identification of Potential Conflicts of Interest (COI).

i. None identified

f. Identification of Non-Disclosure Requirements.

i. All correspondence must be encrypted. The contractor must not disclose pricing to other vendors or entities outside of the MTVAMC contracting and laboratory departments.

ii. Contractor shall provide all necessary supplies for biomedical materials to be transported from the originating facility to the Contractor’s laboratory. These supplies shall include, but may not be limited to:

1. Test request forms.

D. Inspection and Acceptance Criteria.

a. The POC is responsible for certifying that the work done under the contract is performed to time and standard. They are also responsible for assure the inspection and acceptance of products provided incidental to services. A demo period or trial is not inspection of a product.

E. Rick Control

a. The contractor may be exposed to hazardous chemicals. The contractor is responsible for keeping up to date on Safety Data Sheets and procedures for mitigation of exposure.

F. Place of Performance.

a. July 1, 2026, to June 30, 2031. This will be a five-year blanket purchase agreement.

G. Delivery Schedule.

a. Task 1: Surgical specimens. Following receipt of material/tissue, specimens should be processed in less than or equal to two (2) days.

b. Task 2: Non-GYN Cytology Specimens. Following receipt of material/tissue, specimens should be processed in less than two (2) business days.

c. Task 3: GYN Cytology Specimens. Following receipt of material/tissue, specimens should be processed in less than two (2) days.

VA HANDBOOK 6500.6

APPENDIX B

VA ACQUISITION REGULATION SOLICITATION PROVISION AND CONTRACT CLAUSE

1. SUBPART 839.2 – INFORMATION AND INFORMATION TECHNOLOGY SECURITY REQUIREMENTS

839.201 Contract clause for Information and Information Technology Security:

a. Due to the threat of data breach, compromise or loss of information that resides on either VA-owned or contractor-owned systems, and to comply with Federal laws and regulations, VA has developed an Information and Information Technology Security clause to be used when VA sensitive information is accessed, used, stored, generated, transmitted, or exchanged by and between VA and a contractor, subcontractor or a third party in any format (e.g., paper, microfiche, electronic or magnetic portable media).

b. In solicitations and contracts where VA Sensitive Information or Information Technology will be accessed or utilized, the CO shall insert the clause found at 852.273-75, Security Requirements for Unclassified Information Technology Resources.

2. 852.273-75 - SECURITY REQUIREMENTS FOR UNCLASSIFIED INFORMATION TECHNOLOGY RESOURCES (INTERIM- OCTOBER 2008) As prescribed in 839.201, insert the following clause:

The contractor, their personnel, and their subcontractors shall be subject to the Federal laws, regulations, standards, and VA Directives and Handbooks regarding information and information system security as delineated in this contract.

(END OF CLAUSE)

(End of Appendix B)

VA HANDBOOK 6500.6

APPENDIX C

VA INFORMATION AND INFORMATION SYSTEM SECURITY/PRIVACY LANGUAGE FOR INCLUSION INTO CONTRACTS, AS APPROPRIATE

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/subcontrator 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 COTR.

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 COTR 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 COTR. 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/subcontractorowned 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 VAapproved 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 time of purchase.

(4) Due to the highly specialized and sometimes proprietary hardware and software associated with medical equipment/systems, if it is not possible for the VA to retain the hard drive, then;

(a) The equipment vendor must have an existing BAA if the device being traded in has sensitive information stored on it and hard drive(s) from the system are being returned physically intact; and

(b) Any fixed hard drive on the device must be non-destructively sanitized to the greatest extent possible without negatively impacting system operation. Selective clearing down to patient data folder level is recommended using VA approved and validated overwriting technologies/methods/tools. Applicable media sanitization specifications need to be preapproved and described in the purchase order or contract.

(c) A statement needs to be signed by the Director (System Owner) that states that the drive could not be removed and that (a) and (b) controls above are in place and completed. The ISO needs to maintain the documentation.

6. SECURITY INCIDENT INVESTIGATION

a. The term “security incident” means an event that has, or could have, resulted in unauthorized access to, loss or damage to VA assets, or sensitive information, or an action that breaches VA security procedures. The contractor/subcontractor shall immediately notify the COTR and simultaneously, the designated ISO and Privacy Officer for the contract of any known or suspected security/privacy incidents, or any unauthorized disclosure of sensitive information, including that contained in system(s) to which the contractor/subcontractor has access.

b. To the extent known by the contractor/subcontractor, the contractor/subcontractor’s notice to VA shall identify the information involved, the circumstances surrounding the incident (including to whom, how, when, and where the VA information or assets were placed at risk or compromised), and any other information that the contractor/subcontractor considers relevant.

c. With respect to unsecured protected health information, the business associate is deemed to have discovered a data breach when the business associate knew or should have known of a breach of such information. Upon discovery, the business associate must notify the covered entity of the breach. Notifications need to be made in accordance with the executed business associate agreement.

d. In instances of theft or break-in or other criminal activity, the contractor/subcontractor must concurrently report the incident to the appropriate law enforcement entity (or entities) of jurisdiction, including the VA OIG and Security and Law Enforcement. The contractor, its employees, and its subcontractors and their employees shall cooperate with VA and any law enforcement authority responsible for the investigation and prosecution of any possible criminal law violation(s) associated with any incident. The contractor/subcontractor shall cooperate with VA in any civil litigation to recover VA information, obtain monetary or other compensation from a third party for damages arising from any incident, or obtain injunctive relief against any third party arising from, or related to, the incident.

7. LIQUIDATED DAMAGES FOR DATA BREACH

a. Consistent with the requirements of 38 U.S.C. §5725, a contract may require access to sensitive personal information. If so, the contractor is liable to VA for liquidated damages in the event of a data breach or privacy incident involving any SPI the contractor/subcontractor processes or maintains under this contract.

b. The contractor/subcontractor shall provide notice to VA of a “security incident” as set forth in the Security Incident Investigation section above. Upon such notification, VA must secure from a non-Department entity or the VA Office of Inspector General an independent risk analysis of the data breach to determine the level of risk associated with the data breach for the potential misuse of any sensitive personal information involved in the data breach. The term 'data breach' means the loss, theft, or other unauthorized access, or any access other than that incidental to the scope of employment, to data containing sensitive personal information, in electronic or printed form, that results in the potential compromise of the confidentiality or integrity of the data. Contractor shall fully cooperate with the entity performing the risk analysis. Failure to cooperate may be deemed a material breach and grounds for contract termination.

c. Each risk analysis shall address all relevant information concerning the data breach, including the following:

(1) Nature of the event (loss, theft, unauthorized access);

(2) Description of the event, including:

(a) date of occurrence;

(b) data elements involved, including any PII, such as full name, social security number, date of birth, home address, account number, disability code;

(3) Number of individuals affected or potentially affected;

(4) Names of individuals or groups affected or potentially affected;

(5) Ease of logical data access to the lost, stolen or improperly accessed data in light of the degree of protection for the data, e.g., unencrypted, plain text;

(6) Amount of time the data has been out of VA control;

(7) The likelihood that the sensitive personal information will or has been compromised (made accessible to and usable by unauthorized persons);

(8) Known misuses of data containing sensitive personal information, if any;

(9) Assessment of the potential harm to the affected individuals;

(10) Data breach analysis as outlined in 6500.2 Handbook, Management of Security and Privacy Incidents, as appropriate; and

(11) Whether credit protection services may assist record subjects in avoiding or mitigating the results of identity theft based on the sensitive personal information that may have been compromised.

d. Based on the determinations of the independent risk analysis, the contractor shall be responsible for paying to the VA liquidated damages in the amount of $42.00 per affected individual to cover the cost of providing credit protection services to affected individuals consisting of the following:

(1) Notification;

(2) One year of credit monitoring services consisting of automatic daily monitoring of at least 3 relevant credit bureau reports;

(3) Data breach analysis;

(4) Fraud resolution services, including writing dispute letters, initiating fraud alerts and credit freezes, to assist affected individuals to bring matters to resolution;

(5) One year of identity theft insurance with $20,000.00 coverage at $0 deductible; and;

(6) Necessary legal expenses the subjects may incur to repair falsified or damaged credit records, histories, or financial affairs.

8. SECURITY CONTROLS COMPLIANCE TESTING

On a periodic basis, VA, including the Office of Inspector General, reserves the right to evaluate any or all of the security controls and privacy practices implemented by the contractor under the clauses contained within the contract. With 10 working-day’s notice, at the request of the government, the contractor must fully cooperate and assist in a government-sponsored security controls assessment at each location wherein VA information is processed or stored, or information systems are developed, operated, maintained, or used on behalf of VA, including those initiated by the Office of Inspector General. The government may conduct a security control assessment on shorter notice (to include unannounced assessments) as determined by VA in the event of a security incident or at any other time.

9. TRAINING

a. All contractor employees and subcontractor employees requiring access to VA information and VA information systems shall complete the following before being granted access to VA information and its systems:

(1) Sign and acknowledge (either manually or electronically) understanding of and responsibilities for compliance with the Contractor Rules of Behavior, Appendix D relating to access to VA information and information systems;

(2) Successfully complete the VA Cyber Security Awareness and Rules of Behavior training and annually complete required security training;

(3) Successfully complete the appropriate VA privacy training and annually complete required privacy training; and

(4) Successfully complete any additional cyber security or privacy training, as required for VA personnel with equivalent information system access.

b. The contractor shall provide to the contracting officer and/or the COTR a copy of the training certificates and certification of signing the Contractor Rules of Behavior for each applicable employee within 1 week of the initiation of the contract and annually thereafter, as required.

c. Failure to complete the mandatory annual training and sign the Rules of Behavior annually, within the timeframe required, is grounds for suspension or termination of all physical or electronic access privileges and removal from work on the contract until such time as the training and documents are complete.

(End of Appendix C)

(End of Statement of Work)