DRAFT Performance Work Statement.pdf

03/18/2026 – DRAFT DOCUMENT

PERFORMANCE WORK STATEMENT (PWS)

Title: Medical Terminology and Coding Training

1. BACKGROUND

The Financial Services Center (FSC), located in Austin, Texas, is a franchise fund (fee-for-service) organization in the Department of Veterans Affairs (VA). Under the authority of "The Government Management Reform Act of 1994" and "The Military Quality of Life and Veterans Affairs Appropriations Act, 2006, Public Law 109-114." The VA FSC offers a wide range of financial and accounting products and services to the VA and Other Government Agencies (OGA).

VA FSC’s dedicated staff continuously delivers world-class customer service, ensuring superb results and customer satisfaction. The breadth and depth of expertise and experience are key ingredients to our high product quality and customer service. FSC is divided into five departments (called Services) that are organized around revenue centers and product lines to better focus on service delivery and accountability.

FSC eCommerce Solutions applies the latest technological advancements in medical claims processing that includes secure automated claims adjudication. By offering HIPPAA compliant, fully automated payment solutions, the VA FSC ensures federal guidelines are met while streamlining the medical claims payment process. The flexible, cost-effective payment solution delivers quality service and accurate, dependable results.

2. SCOPE OF WORK

The Department of Veterans Affairs, Financial Services Center (VA-FSC) requires medical terminology and coding training for Government employees and supervisors processing medical claims. The course shall:

Provide a fundamental understanding of the o various medical terminology and medical codes, and o essential core competencies detailed in Section 4 below

Effectively apply to Government employees and supervisors with little or no previous experience with medical terminology and medical coding.

Be set in a culture designed to promote innovative ways to develop employees’ understanding of basic medical terminology requirements.

Promote knowledge retention and include innovative strategies for effective learning and continuous application, accounting for human memory, learning processes, and adult learning styles.

Maintain and develop a Government employee and supervisor workforce capable of effectively processing customers’ medical claims.

Be inclusive per training session/ curriculum, program materials, and a certificate upon successful completion of training for each VA-FSC attendee.

3. CONTRACT TYPE

The Government anticipates awarding a Firm-Fixed-Price (FFP) contract for this requirement. Under an FFP arrangement, the contractor shall provide all services, materials, labor, and deliverables described in this Performance Work Statement (PWS) at a fixed total price. The contractor is responsible for managing costs and performance to meet the Government’s stated requirements.

The Government may consider alternative contract types (e.g., Time-and-Materials or Labor-Hour) only if determined to be in the Government’s best interest based on responses to the Request for Information (RFI) and the nature of the proposed training solution.

4. PERIOD OF PERFORMANCE

The base period of performance shall be October 1, 2026, through September 30, 2027, with one (1) Option Period. The Base Period shall include four (4) training classes and two (2) optional training classes. The Option Period shall include up to (4) training classes. The duration of the classes will depend on the Contractor’s class schedule;

however, each class should not be more than five (5) days. The Contractor shall provide the number of days for each class.

Note: Class shall begin at 8:00 am Central time and end by 4:00 pm Central time.

There will be one (1) hour for lunch, 11:30 am to 12:30 pm. Each class will include up to twenty (20) students. The instructor shall provide this training on site, with participants in the classroom and virtually online simultaneously, and have the training session ready to begin at the class start time.

5. PLACE OF PERFORMANCE AND TRAINING FORMAT

Training sessions shall be conducted in-person and virtually for remote participants and in-person trainings take place at the Financial Services Center, 8000 Metropolis Drive, Building B: Austin Texas 78744.

6. TRAVEL

The Government shall not reimburse travel expenses.

7. TASK STATEMENT AND DELIVERABLES

Tasks performed shall be of a non-personal nature. VA organizations will not provide supervision of contractor personnel. Contractor personnel shall at no time allow an employer-employee relationship to develop with VA organizations or their staff. VA organizations will refrain from any activities that create the appearance of such a relationship.

Contractors shall not perform inherently governmental functions including: decision-making; supervision of Government employees; supervision of other contractors on other contracts; and activities that create the appearance of performing such functions.

Section 7.2 describes detailed task activities associated with the scope of work.

7.1. REPORTING REQUIREMENTS

The Contractor shall provide the VA POC and VA course attendees with certificates of completion for each participant who successfully completes the training and an end of course survey.

Deliverables:

- Course Agenda and Syllabus (submitted prior to delivery)

- Student Training Materials

- Instructor Qualifications

- Instructional Delivery

- Daily Attendance Records

- Knowledge Assessment

- Certificates of completion

- Post course surveys and evaluation summary

The Contractor shall provide all training/course materials for retention by the attendees.

Training/course materials must be delivered to a VA FSC Point of Contact (POC) at least three (3) business days, but no more than five (5) business days, before the training event date (to allow FSC to upload these materials to the network for virtual training; to allow clearance of materials by security for in-person training). The Contractor shall contact the COR and the VA FSC POC at least five (5) business days in advance to coordinate any logistical and final details.

The instructor shall email VA FSC POC training certificates for all attendees participating and successfully completing all of the objectives of the training course no greater than five business days after each training event. The Contractor shall also provide a course summary/description and list of attendees showing course completion status via email to the VA FSC POC.

In-Person Training:

The instructor will be able to connect their laptop or computer to the VA FSC Guest Wi- Fi only. The instructor will not be able to connect to the VAFSC Network or intranet. The instructor will use the FSC's audio visual equipment to conduct the in-person training.

The instructor will work with VA FSC onsite IT for connection. The contractor is expected to arrive no less than one hour prior to presentation start time to set up for the event. The contractor will provide in-person training materials no less than three business days prior to the in-person training (this includes, but is not limited to, handouts & supplemental materials).

Virtual Training:

The instructor will coordinate with the VA FSC POC and VA FSC IT to setup up to conduct virtual training via Microsoft Teams or Cisco Webex. The instructor is expected to be available for setup no less than one hour prior to training start time to set up and test all functionality that will be used during training.

The contractor will coordinate with a VA FSC POC that will be designated at the time of award. The contractor will need to provide a POC, their contact information (name, email address, phone number)

7.2. TASK

The essential core competencies/end results listed below are the minimum requirements that shall be met in the medical terminology and coding training instruction:

(a) Overview and purpose of medical coding; knowledge of medical terminology, to include prefixes, suffixes and root words.

(b) Knowledge of medical terminology to determine meaning based on word parts.

(c) Knowledge of medical and directional terminology as it relates to the human body in health and disease.

(d) Knowledge of medical and directional terminology as it relates to the skeletal system, muscular system, cardiovascular system, lymphatic and immune systems, respiratory system, digestive system, urinary system, integumentary system, and the endocrine system.

(e) Knowledge of medical terminology as it relates to diagnostic procedures, general surgery, radiology, pathology, and laboratory.

(f) Knowledge of medical coding as it relates to Common Procedural Terminology (CPT) and evaluation and management coding.

(g) Knowledge of medical coding as it relates to anesthesia and modifiers coding.

(h) Knowledge of medical coding as it relates to medicine and HCPCS Level II

National Codes and modifiers.

(i) Understand how medical coding supports billing, reimbursement, claims processing, and documentation accuracy.

(j) Knowledge of medical coding as it relates to ICD-10-CM.

(k) Knowledge of medical coding relates to third party reimbursement issues, including: Medicare, DRGs, PROs, APCs, managed care, and Fraud, Waste & Abuse.

(l) Coding guidelines, conventions, and basic error-prevention concepts.

(m) Hands‑on practice applying introductory coding principles.

7.3. DELIVERABLES

The Contractor shall provide training certificates for all students participating and successfully completing all of the objectives of the training course. Deliverables shall include:

(a) Course summary/description and list of attendees showing course completion status.

(b) Training Completion Certificate for each virtual and in-person attendee within (5) five days post-class.

(c) The Offeror shall submit training materials, brochures, and other materials as well as a detailed technical quote addressing the PWS itemized by the specific tasks and deliverables inclusive of the essential core competencies/end results minimum requirements for the medical terminology and coding training instruction.

(d) The contractor shall:

a. Provide a qualified instructor with current certifications such as CPC, CCA, CCS, RHIT, RHIA, or equivalent.

b. Provide all course materials (slides, manuals, workbooks, coding examples).

c. Include case studies, sample documentation, and practical exercises.

d. Ensure course content is current, aligned with recognized industry standards, and compliant with HIPAA considerations related to training materials.

e. Provide all Student Materials with:

1) Course workbook or electronic equivalent

2) Glossary of foundational medical terminology

3) Coding references appropriate to an introductory level

4) Practice exercises and answer keys

f. Administer a short assessment or knowledge check at the end of the course.

(e) Interactive and engaging methods to facilitate learning for both virtual and in-person attendees, for example:

a. Real-time quizzes and knowledge checks.

b. Interactive discussions and Q&A sessions.

c. Hands-on practice exercises and case studies.

d. Virtual breakout rooms for group activities (for virtual attendees).

e. Use of multimedia resources to enhance understanding, such as:

f. Educational videos and tutorials that demonstrate key concepts.

g. Audio recordings for listening exercises and verbal explanations.

h. Animations to visually represent complex processes.

i. Interactive simulations and digital tools that allow learners to apply knowledge in a practical setting.

j. Infographics and diagrams that visually summarize information.

k. A participant feedback mechanism to assess the effectiveness of the training and identify areas for improvement.

Note: Deliverables and requirements may adjust based on market research results.

7.4. DELIVERABLE SCHEDULE

Deliverable Description Due Date

Student Training Materials All course materials for in-person and virtual attendees.

Electronic or printed course materials, including:

Workbook or manual Glossary of medical terms Introductory coding reference materials Practice exercises and sample scenarios

3-5 business days prior to course delivery

Course Agenda and Syllabus

Outline of daily topics, learning objectives, instructional methods, and required materials.

Minimum 10 business days prior to course delivery

Instructional Delivery 3-5 day instructor‑led training course covering medical terminology and introductory medical coding concepts.

Delivery format as specified by the Government.

Daily Attendance Records A roster documenting student attendance for each day of training and completion status.

Within 5 business days post event

Knowledge Assessment A short quiz or knowledge check administered at the end of the course to assess learner understanding of key concepts.

Graded results provided within 5 business days post-event.

Training Certificates of completion

Certificates for all attendees who successfully completed the course.

Certificates must include course title, dates, provider name, and participant’s name.

Within 5 business days post event

Post-course Evaluation Summary & Surveys

Summary/description of each course delivered, including surveys.

Recommendations for course improvement.

Within 10 business days post event

8. OTHER DIRECT COSTS

None.

9. GOVERNMENT FURNISHED EQUIPMENT AND MATERIAL

VA-FSC will provide the training facility, including audiovisual equipment, virtual platform (to engage and train virtual attendees) and a whiteboard with markers for the instructor’s use. The Contractor shall provide the presentation on the instructor’s laptop, which will be connected directly to the audio/visual equipment.

Note: The contractor shall not connect his/her computer to the VA FSC intranet network and there will only be Guest WiFi availability. The contractor shall not connect to other VA FSC internet/intranet networks.

10. QUALITY ASSURANCE SURVEILLANCE PLAN

Performance Standards define required performance for specific tasks. The Government performs surveillance to determine if the contractor exceeds, meets or does not meet these standards. The Government may utilize the Performance Based Service Assessment Survey, provided as Attachment E, or other methods to compare contractor performance to the Acceptable Levels of Performance (ALPs).

10.1. METHODS OF SURVEILLANCE

Various methods exist to monitor performance. The COR shall use any or several of the surveillance methods listed below in the administration of this QASP.

a. 100% Inspection (evaluates all outcomes) - Each month, the COR shall review all of the contractor’s performance/generated documentation and document results accordingly. This assessment shall be placed in the COR’s QA file.

b. Random Sample - The COR shall review a random sampling of the contractor’s performance/generated documentation and document your results accordingly. This assessment shall be placed in the COR’s QA file.

c. Validated Customer Complaint or Validated Below Average ALP in a Specific Area - Each month, the COR shall review the contractor’s performance/generated documentation corresponding to a validated customer complaint or validated inability to perform in accordance with the ALP in a specific area and document your results accordingly. This assessment shall be placed in the COR’s QA file.

10.2. FREQUENCY OF MEASUREMENT

During task order performance, the COR will periodically analyze whether the negotiated frequency of surveillance is appropriate for the work being performed, and at a minimum shall be once a week.

10.3. MEASURABLE PERFORMANCE STANDARDS

a. On-Time Delivery of Materials: 100% of materials delivered 3–5 business days before class.

b. Adherence to Training Schedule: 98% compliance with published start/end times.

c. Knowledge Assessment Results: Class average ≥ 80% on post-training assessments.

d. Competency Demonstration: 90% of participants meeting core competency proficiency.

e. Participant Satisfaction: Minimum average of 4.0/5.0.

f. Virtual Delivery Effectiveness: 95% positive technical feedback.

g. Credential Submission Timeliness: 100% submitted 5 business days prior.

h. Instruction Quality: No more than one substantiated complaint per class.

i. Certificate Delivery: Certificates issued within 5 business days post-training.

10.4. ACCEPTABLE PERFORMANCE LEVELS (APLs)

Performance

Objective Performance

Standard Surveillance Method Outcome

TRAINING

STARTS/ENDS

ON SCHEDULE

Class begins at 8:00 am and ends by 4:00 pm

Random COR observation

No more than five incidents of performance schedule slippage

KNOWLEDGE

ASSESSMENTS

Class average score ≥ 80%

Review of assessments

Contractor must submit corrective plan if below

APL.

PARTICIPANT

SATISFACTION

Average rating ≥ 4.0/5.0

Anonymous surveys < 3.5 triggers remedial action.

CERTIFICATE

ISSUANCE

Certificates delivered within 5 business days

COR verification Withhold invoice until corrected.

INSTRUCTOR

PROFESSIONA

LISM

No more than 1 validated complaint per class

Participant survey / COR report

Remedy: Require instructor replacement.

VIRTUAL

DELIVERY

QUALITY

95% of virtual attendees report functional audio/video

Post-class questionnaire

Remedy: Contractor must fix issues before next class.

PROJECT

MANAGEMENT

MILESTONES,

AND

SCHEDULE

a. Notifies customer of potential problems 90% of the time.

100% Inspection of agreed upon milestones per the approved PMP

Notification occurs within two business days of potential issue when known in advance or within 24 hours of urgent problems, where less than two business days exist

b. Submits Deliverables in accordance with the deliverable schedule within (+/-) five business days with no more than five incidents of performance slippage

100% Inspection of deliverables

No more than five incidents of performance schedule slippage

ACCURACY

AND

COMPLETENE

SS OF COURSE

CONTENT

Content aligns with required topics; no material omissions or factual errors

Government review of materials; spot checks during training

100% compliance; no more than 1 minor correction per delivery

INSTRUCTOR

QUALIFICATIO

NS

Instructor holds required certifications and experience

Verification of credentials before course start

100% compliance

WRITTEN

COMMUNICATI

ON

Uses correct English grammar, punctuation, and spelling 95% of the time;

communicates information in a succinct and organized

Random Sampling Written communication is consistently error-free and clear and concise so that the message is easily understood by others manner, produces written information that is appropriate for the intended audience

CUSTOMER

SUPPORT /

RESPONSIVEN

ESS TO

GOVERNMENT

INQUIRIES

Courteou s and professio nal interactio ns to receive and fill task order deliverabl es and in providing order status.

Customer

(VA)

support satisfactio n, having no more than 2 incidents of dissatisfa ction.

Contracto r responds within required timeframe (typically 2–3 business days)

Customer Feedback and Complaints based on interactions with the contractor

Email/commun ication logs

Customer problems are resolved within the same business day;

no more than 2 incidents spent by Government personnel in providing corrective feedback on unacceptable customer service/professi onalism

95% of responses on time

11. DOCUMENTING PERFORMANCE

Acceptable Performance

The Government shall document acceptable performance in accordance with the chart above. Any report may become a part of the supporting documentation for any contractual action.

Unacceptable Performance When unacceptable performance occurs, the COR shall inform the CO. This will always be in writing although when circumstances necessitate immediate verbal communication, that communication will be followed in writing. The COR shall document the discussion and place it in the COR file.

When the CO determines formal written communication is required, the COR shall prepare a Contract Discrepancy Report (CDR) and present it to the contractor's program manager.

The contractor shall acknowledge receipt of the CDR in writing to the CO. The CDR will state how long after receipt the contractor has to take corrective action. The CDR will also specify if the contractor is required to prepare a corrective action plan to document how the contractor shall correct the unacceptable performance and avoid a recurrence.

The CO shall review the contractor's corrective action plan to determine acceptability.

Any CDRs may become a part of the supporting documentation for any contractual action deemed necessary by the CO.

12. SECURITY AND PRIVACY REQUIREMENTS

The Certification & Accreditation (C&A) requirements do not apply, and a Security Accreditation Package is not required.

12.1. POSITION/TASK RISK DESIGNATION LEVEL(S)

Position Sensitivity

Background Investigation (in accordance with Department of Veterans Affairs 0710 Handbook, “Personnel Suitability and Security Program,” Appendix A)

Low / Tier 1 Tier 1 / National Agency Check with Written Inquiries (NACI) A Tier 1/NACI is conducted by OPM and covers a 5-year period. It consists of a review of records contained in the OPM Security Investigations Index (SII) and the DOD Defense Central Investigations Index (DCII), Federal Bureau of Investigation (FBI) name check, FBI fingerprint check, and written inquiries to previous employers and references listed on the application for employment. In VA it is used for Non-sensitive or Low Risk positions.

Moderate / Tier 2

Tier 2 / Moderate Background Investigation (MBI) A Tier 2/MBI is conducted by OPM and covers a 5-year period. It consists of a review of National Agency Check (NAC) records [OPM Security Investigations Index (SII), DOD Defense Central Investigations Index (DCII), FBI name check, and a FBI fingerprint check], a credit report covering a period of 5 years, written inquiries to previous employers and references listed on the application for employment; an interview with the subject, law enforcement check; and a verification of the educational degree.

High / Tier 4 Tier 4 / Background Investigation (BI) A Tier 4/BI is conducted by OPM and covers a 10-year period. It consists of a review of National Agency Check (NAC) records [OPM Security Investigations Index (SII), DOD Defense Central Investigations Index (DCII), FBI name check, and a FBI fingerprint check report], a credit report covering a period of 10 years, written inquiries to previous employers and references listed on the application for employment; an interview with the subject, spouse, neighbors, supervisor, co-workers; court records, law enforcement check, and a verification of the educational degree.

The position sensitivity and the level of background investigation commensurate with the required level of access for the following tasks within the Performance Work Statement are:

Position Sensitivity and Background Investigation Requirements by Task Task Number Tier 1 / Low / NACI Tier 2 / Moderate /

MBI

Tier 4 / High / BI

0001 ☒ ☐ ☐

The Tasks identified above, and the resulting Position Sensitivity and Background Investigation requirements identify, in effect, the Background Investigation requirements for Contractor individuals, based upon the tasks the particular Contractor individual will be working. The submitted Contractor Staff Roster must indicate the required Background Investigation Level for each Contractor individual based upon the tasks the Contractor individual will be working, in accordance with their submitted proposal

12.2. CONTRACTOR PERSONNEL SECURITY REQUIREMENTS

12.2.1 Contractor Responsibilities

VA-FSC is a secure facility located in Austin, Texas. As such, the instructor(s) will not need VA escort at all times while in the FSC facility; however, the Contractor shall provide the following no later than five (5) business days before the scheduled training:

Full Name (Last Name, First Name, Middle Name) (as listed on DL or Passport) for each instructor

Date of Birth for each instructor Driver’s License Number for each instructor Driver’s License State of Issuance for each instructor

The VA-FSC facility has secure access control; therefore, the instructor will need to clear security and receive a visitor’s badge. Upon arrival of the instructor to the FSC facility, entry control security guards will request photo identification and direct the instructor to the visitor parking. Instructor will then enter building to obtain a visitor’s badge. VA-FSC security guards will then call for someone to meet the instructor(s).

When inside any VA facility, Contractor personnel must present a professional appearance, be easily recognized as Contractor, and must wear a VA issued badge at all times.

a. The Contractor shall prescreen all personnel requiring access to the computer systems to ensure they maintain the appropriate Background Investigation, and are able to read, write, speak and understand the English language. Personnel accessing VA-FSC facility for the training classes shall have personal identification cards to present to the security guards. The ID cards will remain with the guards who will issue a temporary access badge to the facility. The badge must be turned in at the end of each day and the ID card will be returned to the Contractor.

b. The Contractor shall be responsible for the actions of all personnel provided to work for VA under this contract. In the event that damages arise from work performed by Contractor provided personnel, under the auspices of this contract, the Contractor shall be responsible for all resources necessary to remedy the incident.

c. Contractor shall be responsible for selecting an instructor who is well qualified to perform the required training and assuring that the quality of services meets Government expectations. Personnel assigned by the Contractor shall be technically competent and shall practice good standards of moral and ethical conduct that are acceptable to the Government.

d. Contractor shall not conduct business not directly related to this requirement on

Government premises.

e. Contractor shall not use computer systems and/or other Government facilities for company or personal business.

f. Contractor shall provide personnel necessary to execute the requirements in this

PWS.

12.2.2 Physical Security and Safety Requirements

The Contractor and their personnel shall follow all VA policies, standard operating procedures, applicable laws and regulations while on VA property. Violations of VA regulations and policies may result in citation and disciplinary measures for persons violating the law.

a. The Contractor and their personnel shall wear visible identification at all times while they are on the premises.

b. There is adequate parking at VA FSC. It is the responsibility of the Contractor to park in the appropriate designated parking areas. VA will not invalidate or make reimbursement for parking violations of the Contractor under any conditions.

c. Smoking is prohibited inside/outside any building other than the designated smoking areas.

d. Possession of weapons is prohibited.

e. The Contractor shall obtain all necessary licenses and/or permits required to perform the work, with the exception of software licenses that need to be procured from a Contractor or vendor in accordance with the requirements document. The Contractor shall take all reasonable precautions necessary to protect persons and property from injury or damage during the performance of this contract.

12.2.3 Confidentiality and Non-Disclosure

a. The Contractor shall follow all VA rules and regulations regarding information security to prevent disclosure of sensitive information to unauthorized individuals or organizations.

b. The VA CO will be the sole authorized official to release in writing, any data, draft deliverables, final deliverables, or any other written or printed materials pertaining to this contract. The Contractor shall release no information. Any request for information relating to this contract presented to the Contractor shall be submitted to the VA CO for response.

c. Contractor personnel recognize that in the performance of this effort, Contractor personnel may receive or have access to sensitive information, including information provided on a proprietary basis by carriers, equipment manufacturers and other private or public entities. Contractor personnel agree to safeguard such information and use the information exclusively in the performance of this contract. Contractor shall follow all VA rules and regulations regarding information security to prevent disclosure of sensitive information to unauthorized individuals or organizations as enumerated in this section and elsewhere in this Contract and its subparts and appendices.

d. Contractor shall limit access to the minimum number of personnel necessary for contract performance for all information considered sensitive or proprietary in nature. If the Contractor is uncertain of the sensitivity of any information obtained during the performance this contract, the Contractor has a responsibility to ask the VA CO.

e. Contractor shall train all of their employees involved in the performance of this contract on their roles and responsibilities for proper handling and nondisclosure of sensitive VA or proprietary information. Contractor personnel shall not engage in any other action, venture or employment wherein sensitive information shall be used for the profit of any party other than those furnishing the information. The sensitive information transferred, generated, transmitted, or stored herein is for VA benefit and ownership alone.

f. Contractor shall maintain physical security at all facilities housing the activities performed under this contract, including any Contractor facilities according to VA-approved guidelines and directives. The Contractor shall ensure that security procedures are defined and enforced to ensure all personnel who are provided access to patient data must comply with published procedures to protect the privacy and confidentiality of such information as required by VA.

g. Contractor must adhere to the following:

1) The use of “thumb drives” or any other medium for transport of information is expressly prohibited.

2) Controlled access to system and security software and documentation.

3) Recording, monitoring, and control of passwords and privileges.

4) All terminated personnel are denied physical and electronic access to all data, program listings, data processing equipment and systems.

5) VA, as well as any Contractor (or Subcontractor) systems used to support development, provide the capability to cancel immediately all access privileges and authorizations upon employee termination.

6) Contractor PM and VA PM are informed within twenty-four (24) hours of any employee termination.

7) Acquisition sensitive information shall be marked "Acquisition Sensitive" and shall be handled as "For Official Use Only (FOUO)".

8) Contractor does not require access to classified data.

a) Regulatory standard of conduct governs all personnel directly and indirectly involved in procurements. All personnel engaged in procurement and related activities shall conduct business in a manner above reproach and, except as authorized by statute or regulation, with complete impartiality and with preferential treatment for none. The general rule is to strictly avoid any conflict of interest or even the appearance of a conflict of interest in VA/Contractor relationships.

b) VA Form 0752, Confidentiality of Sensitive Information Non-Disclosure Agreement, shall be completed by all Contractor employees that receive Government furnished laptops, and shall be provided to the CO before any work is performed. In the case that Contractor personnel are replaced in the future, their replacements shall complete VA Form 0752 prior to beginning work

12.3 APPLICABLE VA INFORMATION AND INFORMATION SYSTEM

SECURITY/PRIVACY LANGUAGE (per VA HANDBOOK 6500.6, APPENDIX C, MARCH 12, 2010)

12.3.1 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.

12.3.2 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 (e.g. Business Associate Agreement, Section 3G), 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 CO 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 CO must also be notified immediately by the Contractor or Subcontractor prior to an unfriendly termination.

12.3.3 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 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 information is returned to VA or destroyed in accordance with VA’s sanitization requirements. VA reserves the right to conduct onsite 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 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 CO 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 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. 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.

h. The Contractor/Subcontractor’s firewall and Web services security controls, if applicable, shall meet or exceed VA minimum requirements. VA Configuration Guidelines are available upon request.

i. 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 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 CO for response.

j. 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 CO for response.

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

12.3.4 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 COR 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.

12.3.5 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. However, it is the policy of VA to forgo collection of liquidated damages in the event the contractor provides payment of actual damages in an amount determined to be adequate by the agency.

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.

a) based on the determinations of the independent risk analysis, the Contractor shall be responsible for paying to 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.

12.3.6 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) Successfully complete the VA Privacy and Information Security Awareness and Rules of Behavior course (TMS #10176) and complete this required privacy and security training annually; Sign and acknowledge (electronically through TMS #10176) understanding of and responsibilities for compliance with the Contractor Rules of Behavior, VA Handbook 6500.6 Appendix D relating to access to VA information and information systems.

2) 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 CO and/or the COR 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 electronically 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.