Attachment 1 - Perfomance Work Stateent - Part A.pdf

PERFORMANCE WORK STATEMENT FOR DEPARTMENT OF VETERANS AFFAIRS,

OFFICE OF ASSET ENTERPRISE MANAGEMENT PROGRAMMATIC MANAGEMENT

SUPPORT SERVICES FOR ENHANCED USE LEASE PROGRAM (EUL) PROGRAM

A. GENERAL INFORMATION

1. Title of Project: Enhanced Use Lease (EUL) Program Management - Technical and Strategic Support (PMTSS) Indefinite Delivery/Indefinite Quantity (IDIQ) - Part A.

2. Scope of Work: The contractor shall provide all resources necessary to accomplish the deliverables described in this Performance Work Statement (PWS). The Office of Asset Enterprise Management (OAEM) is the program office responsible for administering the Department of Veterans Affairs (VA) enhanced use lease (EUL) program.

The contractor shall be responsible for providing EUL program management support and technical and reporting deliverables to help ensure EUL projects are accomplished efficiently and effectively. The contractor shall provide and apply expertise in EUL program topics and project-specific challenges to develop the draft and final deliverables identified in this PWS.

For most EULs, VA enters into separate contracts with firms that provide day-to-day transaction support to help support EUL projects as they progress through the due diligence phase, performing such tasks as obtaining appraisals, environmental site assessments, title reports, National Environmental Policy Act (NEPA) and Section 106 compliance documents, and participating in regular conference calls.

The purpose of this contract is also to obtain program wide oversight support functions, guidance, and program support to ensure that the EUL supports the strategic objectives of VA.

3. Background: VA’s EUL authority which allows VA to out-lease real property to non-Federal public entities and private parties for terms of up to 75 years, was enacted in August 1991 and codified in §§ 8161- 8169 of title 38 U.S.C. VA’s EUL authority expired on December 31, 2011, and then was reauthorized under section 211 of Public Law 112-154 on August 6, 2012. VA’s current EUL authority is restricted to VA out- leasing land and improvements for the development of “supportive housing” (as that term is defined in 38 U.S.C. § 8161) for Veterans and/or their families who are homeless or at risk of homelessness.

EUL projects contribute to the Department’s objective of ending Veteran homelessness and contribute to VA cost savings by eliminating the operations and maintenance costs that VA previously incurred on underutilized or vacant capital assets. Examples of supportive housing may include transitional housing, single-room occupancy, permanent housing, congregate living housing, independent living housing, assisted living housing, Memory Care, and other modalities of housing. Co-locating housing for homeless and at-risk Veterans on VA campuses reduces Veteran emergency room visits, duration of hospital stays and similar types of acute medical care. This represents cost avoidance to VA in terms of bed days of care and similar health care services. The values of these savings are reported to Congress annually via VA’s EUL Consideration Report.

(Note: There are some projects that were executed under the old EUL authority that may be amended and may require strategic and advisory assistance).

VA is also pursuing amended legislation to expand the scope of the current authority to include both supportive housing projects and projects that provide services and/or mixed uses, which incorporate other important benefits to Veterans.

4. Performance Period: The period of performance for this IDIQ is for five years (1,825 calendar days).

5. Type of Contract: This is anticipated to be a single award IDIQ contract. Firm Fixed price task orders will be generated with a detailed PWS and issued by a Contracting Officer. The maximum (ceiling) amount is estimated at $5,000,000.00 over a five-year performance period. The contract has a onetime minimum of $2,500.00. The contractor must demonstrate it possesses both general and specialized capability, knowledge, and skills.

6. Place of Performance: The primary place of performance will be at the contractor’s facilities.

7. IDIQ Title: Enhanced Use Lease (EUL) Program Management - Technical and Strategic Support (PMTSS) Indefinite delivery, indefinite quantity (IDIQ).

8. CONTRACT AWARD MEETING

The contractor shall not commence performance on the tasks in this PWS until the CO has conducted a Post-Award Conference (PAC).

9. GENERAL REQUIREMENTS

The following general requirements apply to this task order:

a. The contractor shall identify its proposed technical approach in writing. The contractor’s task order quote shall include its proposed labor categories, rates, and number of hours by task, together with associated delivery dates and sub-milestone dates (if any) and proposed key personnel résumés if not on file. Résumés are not required for clerical personnel.

b. All written deliverables shall be phrased in layperson language. Statistical and other technical terminology shall not be used without providing a glossary of terms.

c. Unless otherwise specified in an individual task order, the following schedule requirements apply: Where a written milestone deliverable is required in draft form, the VA will complete its review of the draft deliverable within 12 calendar days from date of receipt. The contractor shall have 12 calendar days to deliver the final deliverable from date of receipt of the Government’s comments.

d. The contractor shall provide, via email, minutes of all Government-contractor meetings. The contractor shall provide these minutes within one calendar day after completion of the meeting unless otherwise specified in an individual task order.

e. Except for proprietary information in company quotes identified and marked in accordance with FAR 52.215-1(e), the contractor shall not deliver to the OAEM any proprietary products or information of any type in completing the requirements of each task order PWS. The contractor’s internal development tools (that is, those development tools not developed for OAEM work and not required by OAEM to install, use, or revise the deliverables) are exempted from this requirement. If the contractor believes an exception to this requirement is necessary for the effective or efficient execution of a task order, the contractor shall request a specific exception, in writing, to the CO, and shall not use the proprietary tools or information in OAEM work until approval is received from the CO.

f. The contractor shall ensure contract employees maintain an open and professional communication with the staff at the VA facilities. For transparency purposes, email to the CO shall not be blind carbon copied (BCC) to other Government personnel.

g. Complaints or violation validated by the COR or VA staff will be reported in writing to the CO for action. If the contractor fails to correct validated complaints raised by the COR and or CO, it will be considered a failure in performance.

h. The CO may require the contractor to meet with the CO, contract administrator, and other Government personnel at least quarterly, and as often as deemed necessary. The contractor may request a meeting with the CO when deemed necessary.

10. SPECIFIC MANDATORY TASKS AND ASSOCIATED DELIVERABLES

Description of Tasks and Associated Deliverables: The contractor shall provide the specific deliverables (and make sure they are 508 compliant, as requested by the COR) described below within the performance period stated in Section A.4 of this PWS.

Task One: PMP and Briefing The contractor shall provide a PMP and briefing for the project team, which presents the contractor's plan for completing the task order. The contractor's plan shall be responsive to this PWS and describe, in further detail, the approach to be used for each aspect of the task order as defined in the technical proposal. The contractor shall keep the PMP up to date throughout the period of performance.

Deliverable One: Draft and Final PMP and Briefing.

Task Two: Financial review and analysis of the EUL portfolio Contractor shall maintain project management (PM) report files (VA will provide the original format to be developed for each new project) on up to 15 active EUL projects. Within these reports, Contractor shall review and provide comments on portfolio strategy to allow VA staff to make appropriate decisions. Review should include analysis of the business terms, financial performance, and development strategy of EUL projects within the portfolio as well as measuring and proposing mitigation strategies for project risk.

Contractor shall further support VA in securing project-based HUD VASH vouchers for EULs by advising on relative need scoring methodologies.

Financial Pro-Forma review includes:

• Using comparative analysis of like kind commercial real estate development projects to validate operating and development pro-forma to more fully understand and measure risk

• Making recommendations regarding project financial viability

• Analyzing and maintaining updates on the status of the developer’s acquisition of sufficient capital and operating funding for each project

• Identifying risks associated with securing those funding sources based on best practices from prior successful projects

• Providing third party review of business and financial terms for consistency among all projects

• Identifying potential risks to VA on a project-by-project basis

• Providing project risk mitigation recommendations

• Calculating returns, including net present value of EULs to VA.

Deliverable Two: Project Management Report Files (up to 15), including status of HUD VASH vouchers on applicable projects

Task Three: Briefing and Correspondence Support Contractor shall provide technical materials and language to support major programmatic issues for each project or generally, such as lease business terms, Congressional reports, draft press releases, executive briefings, and rapid responses to specialized inquiries.

Deliverable Three: Briefing and Correspondence Support Documents to include a monthly Summary Program Correspondence and Briefing Support Tracker; press releases, executive briefings, and rapid responses as necessary.

Task Four: EUL Handbook and Directive Contractor shall coordinate updates to the EUL Handbook and Directive and all related EUL template and guidance documents (related to the EUL Formulation and Execution phases) with VA EUL project managers and service director to ensure they reflect the latest best practices. Some examples of template documents include capital contributions commitment agreement and EUL lease template.

Deliverable Four: Draft and Final update to the EUL Handbook and Directive as requested.

Deliverable Five: Draft and Final Updates to approximately five Exhibit documents per year.

Task Five: EUL Quarterly Newsletter Contractor shall assist VA in updating its quarterly EUL newsletter to reflect the most current program information. Contractor shall make the report 508-compliant.

Deliverable Six: Draft and Final Quarterly Newsletter

Task Six: EUL Program Dashboard and Ongoing Portfolio Monitoring and Annual EUL Program Reporting (including charts and graphs to illustrate general portfolio data) Contractor shall prepare and maintain an EUL Program Dashboard (using existing program templates) that accurately tracks requirements and graphically presents the status of the EUL program and portfolio for senior VA leadership. Contractor shall produce and update charts and graphs that illustrate general portfolio data to support Dashboard.

Contractor shall work with OAEM to create reports (and update bi-monthly as needed) to present data to management or other stakeholders, including reports to track EUL Project; VA Capital Contributions; and Capital Uses. Other reports should be developed as necessary to ensure transparency to internal and external stakeholders.

Dashboard topics include:

• Total EUL Projects by status and project type.

• Total EUL housing units by status and housing type.

• Aggregated funding sources and uses for program (capital and operating).

• Key upcoming project milestones.

• Key program initiatives compared to housing and building repurposing needs

• Construction progress.

• Project timelines.

• Other topics identified upon review of Project Manager Project Report files for projects.

Deliverable Seven: EUL Program Dashboard, updated bi-monthly (including up to 60 Charts/Graphs to support Dashboard).

Deliverable Eight: Draft and Final Up to six unique reports annually.

Task Seven: Project meetings Contractor shall participate in meetings with various stakeholders (for instance, PMs, IEDS Director, Lessees, Lessees Legal Counsel, OGC and/or DVR) as necessary to help clarify project-specific information and determine next steps to help project progress; or to discuss critical lease issues and business terms for specific projects.

De l i ve ra ble Nine: Meeting minutes for each meeting provided within 5 calendar days, including action items and highlighting issues to be addressed.

Performance Standards and Methods as specified in each task. Past performance will be documented in accordance to IL 001AL-10-03, dated February 22, 2010.

11. SCHEDULE FOR DELIVERABLES

See Attachment A Schedule of Deliverables for each Task Order

1. If for any reason the scheduled time for a deliverable cannot be met, the contractor is required to explain why (include the original deliverable due date) in writing to the CO, including a firm commitment of when the work shall be completed. This notice to the CO shall cite the reasons for the delay, and the impact on the overall project. The CO will then review the facts and issue a response in accordance with applicable regulations.

2. Any hard copy documents the Contractor provides to OAEM must be printed double-sided on recycled paper with at least 30 percent post-consumer fiber.

12. CHANGES TO PERFORMANCE WORK STATEMENT

Any changes to this PWS and all Task Orders shall be authorized and approved only by the CO in writing.

Costs incurred by the contractor through the actions of parties other than the CO shall be borne by the

Surveillance Area Performance Standards Method of Assessing Performance

Management of price and schedule

Timely delivery to the COR within the contract/order schedule Status Meetings are scheduled on time, with appropriate Vendor staff attending and issues addressed satisfactorily to

VA

Review of Monthly Status Reports and Status Meetings

100% inspection

Technical quality of deliverables

Deliverables are high quality; address required performance work statement areas and contain three or fewer defects identified in the Final deliverable submittal

Review of Final deliverables and Status Meetings

100% inspection

Quality of Project Management and Relationship Management

Timely Responses to open acquisition issues 98% of the time Corrections and Re-submittal to VA within five calendar days of rejected deliverables Low Turnover of Key Personnel

Contractor develops and maintains a staffing plan that adequately supports the requirements of the task orders 98% of the time.

Open communication between VA and Vendor

Contractor provides a single point of contact responsible for task order performance.

Ability to meet the within scope changing demands of the program as it evolves

Review of Final deliverables, Status Reports and Status Meetings Review and approval of Key Personnel changes VA customer satisfaction contractor.

13. TRAVEL

As required by each task order, the contractor may be required to travel to Washington, D.C., or to other VA locations. Travel and per diem shall be reimbursed in accordance with Federal Acquisition Regulation

(FAR)

31.205-46, Travel costs. Each contractor invoice must include copies of all receipts that support the travel costs claimed in the invoice. No General and Administrative (G&A) fees or costs, and no other fees or costs shall be added to travel expenses. Local travel within a 50-mile radius from the Contractor's facility is considered the cost of doing business and will not be reimbursed. This includes travel, subsistence, and associated labor charges for travel time. Local travel within a 50-mile radius from the Contractor's employee’s residence is considered the cost of doing business and will not be reimbursed.

This includes travel, subsistence, and associated labor charges for travel time. Travel performed for personal convenience and daily travel to and from work at the contractor's facility will not be reimbursed.

Travel, subsistence, and associated labor charges for travel time for travel beyond a 50-mile radius of the Contractor's facility are authorized on a case-by-case basis and must be pre-approved by the CO at least 30 calendar days in advance for the requested travel.

14. GOVERNMENT FURNISHED PROPERTY AND INFORMATION

Government Furnished Property and Information, if required, will be specified in each task order.

Except for those items or services specifically stated to be Government furnished, the contractor shall furnish everything required to perform task orders. For contractors required at VA facilities, the Government will provide office space including a desk, telephone, and computer to perform the required work.

15. CONTRACTOR EXPERIENCE REQUIREMENTS—KEY PERSONNEL

1. These skilled experienced professional and/or technical personnel are essential for successful contractor accomplishment of the work to be performed under this contract and subsequent task orders and options.

The contractor shall include in the technical proposal for each task order the résumés of all proposed professional and/or technical personnel who will perform the tasks in the task order. Résumés are not required for clerical personnel. The personnel whose résumés are submitted are defined as key personnel.

The contractor agrees that the key personnel listed in their proposal shall not be removed, diverted, or replaced from work without approval of the CO and COR (résumés do not need to be provided if it’s already in the contract file).

2. Any personnel the contractor offers as substitutes shall have the ability and qualifications equal to or better than the key personnel that are being replaced. Requests to substitute personnel shall be approved by the COR and the CO. All requests for approval of substitutions in personnel shall be submitted to the COR and the CO at least 30 calendar days prior to making any change in key personnel. The request shall be written and provide a detailed explanation of the circumstances necessitating the proposed substitution. The contractor shall submit a complete résumé for the proposed substitute, any changes to the rate specified in the order (as applicable) and any other information requested by the CO needed to approve or disapprove the proposed substitution. The CO will evaluate such requests and promptly notify the contractor of approval or disapproval thereof in writing.

Note:

a. Standards of Conduct. The Contractor shall ensure that personnel assigned to this contract comply with the Standards of Ethical Conduct specified by the Office of Government Ethics at 5 CFR 2635.

b. Personnel assigned by the Contractor to perform work on this IDIQ shall be acceptable to VA in terms of personal and professional conduct and technical knowledge. The Contracting Officer may notify the Contractor and request that a person be immediately removed from assignment on this contract should any contractor personnel be determined to be unacceptable in terms of technical competency or personal conduct during duty hours. The contractor shall immediately remove and replace the unacceptable on-site personnel at no additional costs to the Government. Replacement personnel qualifications shall be equal to or greater than those of the personnel being replaced. Employment and staffing difficulties shall not be justification for failure to meet established schedules.

c. Contractor personnel shall be able to communicate effectively in English, both written and oral.

d. The contractor shall notify the CO whenever an employee of the United States Government is utilized by the contractor in the performance of the contract. The notification shall include sufficient information for the Contracting Officer to review the matter in accordance with FAR Part 3 and Subpart 9.5.

e. The contractor shall verify employee eligibility through the E-Verify system.

J. SECURITY REQUIREMENTS

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 FAR 52.227-14(d)(1), Rights in Data – General.

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 38 U.S.C. § 5705, confidentiality of medical quality assurance records and/or 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.

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 COTR, and approved by the VA Privacy Service in accordance with Directive 6507, VA Privacy Impact Assessment.

b. The contractor/subcontractor shall certify to the COTR 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 three 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 five 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 vulnerability 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 memoranda 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/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 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 pre-approved and described in the purchase order or contract.

© 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 $37.50 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-days’ 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…