JA - Actuarial Svc_Redacted.pdf

DEPARTMENT OF VETERANS AFFAIRS

Office of Procurement, Acquisition and Logistics (OPAL)

Strategic Acquisition Center (SAC) 10300 Spotsylvania Ave, Suite 400

Fredericksburg, VA 22408

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

(1) Identification of the agency and the contracting activity, and specific identification of the document as a "Justification for Other Than Full and Open Competition."

This Justification and Approval (J&A) for Other Than Full and Open Competition is executed by the Strategic Acquisition Center (SAC), on behalf of the Department of Veterans Affairs (VA), Veterans Health Administration (VHA), Chief Strategy Office

(CSO).

(2) Nature and/or description of the action being approved.

This activity intends to award a new firm-fixed price bridge contract to the incumbent contractor, Milliman, Inc., on a sole source basis to provide continued Actuarial Support Services and to prevent a lapse in critical services in support of the Veterans Health Administration (VHA), Chief Strategy Office (CSO) while the follow-on acquisition is competitively procured. The current contract will expire on March 31, 2025. The proposed bridge of the Actuarial Support Services contract will support the Chief Strategy Office (CSO) which requires a wide range of health care actuarial expertise to project Veteran enrollment, demand for VA health care, and associated expenditures to support the VA medical care budget, strategic, capital, and workforce planning, and policy analysis. The period of performance for this action covers a four-month base period from April 1, 2025, through July 31, 2025, and includes four additional optional periods of performance covering from, Option 1, August 1, 2025 through October 31, 2025 (Three months), Option 2, November 1, 2025, through December 31, 2025 (Two months), Option 3, January 1, 2026 through February 28, 2026 (Two months), and Option 4, March 1, 2026 through March 31, 2026 (One month), if needed.

The contractor shall provide actuarial consulting, modeling, and analytical services to assess the impact of an evolving VA health care system and broader environment on Veteran demand for VA health care. These services promote twenty-year projections of Veteran enrollment, utilization, and expenditures at a very detailed level for each fiscal year. The resulting projections are central in the development of the VA medical care budget, strategic planning, capital and workforce planning, and policy analysis.

(3) A description of the supplies or services required to meet the needs (including the estimated value).

The purpose of the current Actuarial Support Services contract held by Milliman is to provide actuarial consulting, modeling, and analytical services to assess the impact of an evolving VA health care system and broader environment on Veteran demand for VA health care. The VA Enrollee Health Care Projection Model (EHCPM) produces twenty-year projections of Veteran enrollment, utilization, and expenditures at a very detailed level for each fiscal year. The cost estimates are fundamental to the development of approximately 90 percent of the VA Medical Care Budget. The resulting projections are central in the development of the VA medical care budget, strategic planning, capital and workforce planning, and policy analysis. Tasks that support development of the EHCPM involve collaboration between VHA, program offices, and contracted actuaries to maintain, enhance, and annually update the EHCPM with new data from the most recently completed fiscal year and other newly available data.

The CSO and the actuarial consultants serve the quantitative and analytical needs related to Veteran enrollment and demand for VA health care to support the requirement of various local/regional, national, and federal stakeholders, including but not limited to VA health care facilities, Veteran Integrated Service Networks (VISNs), the VHA Under Secretary for Health, VHA Office of Finance, VHA program offices, the Secretary of Veterans Affairs, VA Office of Management, Office of Management and Budget, Department of Health and Human Services, Indian Health Service, Congressional members, staff and committees, Government Accountability Office, includes producing model projections that provide critical support to the federal budget process, VHA strategic, capital, workforce planning, and the ad hoc requests of stakeholders.

The estimated value of the four-month base period of performance and additional four option periods for a total of one year is approximately $16 million. This estimated value represents the anticipated contractual usage in the four-month base period, and the additional four option periods, which is based upon the IGCE prepared for the re-competition that analyzed spend in the current contract. The current Actuarial Support Services contract total dollar value is $59,168,291.10 for a Base and Four Option Years, totaling five years and 6 months of performance, and the estimated value for the follow-on contract is approximately $94 million.

(4) An identification of the statutory authority permitting other than full and open competition.

The statutory authority permitting other than full and open competition is 41 U.S.C.

§3304(a)(2), as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-

(5) Rationale Justifying Use of Cited Statutory Authority:

Milliman has been providing these services to VHA for the past twenty years (2004-current), most recently under contract award 36C10G20C0004 issued on October 1, 2019.

Contract follow-up competition efforts began in September 2023 with an initial anticipated award date of August 2024, but based on a number of unforeseen delays in the pre-solicitation phase, the updated anticipated award date is now estimated around May 2025 which is well beyond the end date of the current final extension period of March 31, 2025. With the follow-up solicitation efforts progressing slower than originally anticipated, and with less than 90 calendar days left in the current Actuarial contract life, this produces a risk of having gaps of coverage in providing projections that are central in the development of the VA medical care budget, strategic planning, capital and

Establishing a bridge contract will enable continued actuarial support to VHA until a new contract is in place.

The actuarial support VA obtains includes support for budget formulation, strategic analyses on new and changing laws and regulations. Delays in producing materials or failure to produce materials would have significant negative impacts on VA. Here are several examples of how VA uses the information supplied with actuarial support.

a.

outputs. Delaying or failing to provide the necessary budget scenarios to the VHA Office of Finance for budget formulation, which is submitted to OMB, would result in an inaccurate or incomplete understanding of resources needed for VA to provide allocated to VA hospitals and health care settings to provide health care; insufficient important to note that if the VA system is not resourced to accommodate the volume of care needed, it will lead to higher wait times for Veterans.

b. The actuarial support and analytical work that produces the EHCPM enables

Health Systems Planning Application (HSPA), VHA Support Service Center (VSSC), and the quadrennial Market Area Health Systems Optimization (MAHSO) process, required by the MISSION Act; workforce planning activities; and Strategic Capital Investment Plan (SCIP) processes to calculate space needs and gaps, and request new leases and construction in Prospectuses for the budget submission. The actuarial services contract is required to produce these data and deliverables through the EHCPM. Delaying or failing to provide updated strategic projections of future workload would result in an inaccurate or incomplete understanding of anticipated system needs, significantly impeding appropriate planning for the future to meet the health care needs of Veterans.

c. The EHCPM and other actuarial models are used to assess the impact of proposed new laws, regulations, or internal policies that impact Veteran enrollment, utilization of VA for health care, and the cost of that care. Without the support of the actuaries, VA would be unable to use updated and accurate actuarial models to assess these impacts. This lack of information would mean that decision-making around adopting or changing policies would be ill-informed; VA leadership needs a full and accurate assessment of system impacts to make sound decisions that can affect Veterans and their access to VA health care.

approach to budget formulation process. Key external stakeholders, including the Office of Management and Budget (OMB) as well as Congressional leaders in the House and Senate Veterans Affairs Committees and Appropriations Committees are thoroughly familiar with these approaches and expect budget submissions to reflect them, as evidence-based and analytically formed foundations for resource requirements. Absent this approach, budget submissions will be subject to serious questions and concerns from these stakeholders, jeopardizing the timely and sufficient appropriation of funds that provide resources for VHA facilities to deliver care to ability to provide and support world-

(6) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under 5.202 applies.

Notice of this J&A will be publicized in accordance with FAR Subpart 5.2. As this is a bridge contract, no efforts to solicit potential sources for this action were conducted.

However, the effort to award a fully competitive action for these services is underway within the Integrated Project Team (IPT), as it is anticipated that there are multiple vendors both interested in and capable of providing the required services.

(7) A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

Proposal analysis will be conducted in accordance with (IAW) FAR 15.404-1(b)(2)(v) - Price Analysis. Comparison of proposed prices with independent Government cost estimates; and IAW FAR 15.404-1(b)(2)(vi) - Price Analysis. Comparison of proposed prices with prices obtained through market research for the same or similar items. Prior to awarding this sole source contract, a determination will be made by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable. The Contracting Officer will utilize the historical pricing information from the current Actuarial Support Services contract.

(8) A description of the market research conducted and the results or a statement of the reason market research was not conducted.

As noted above, efforts to award a fully competitive action is underway to maximize competition. An IPT has been implemented with all stakeholders. An RFI has already been issued which closed on May 1, 2023, with multiple respondents, which was then followed up with an Industry Day Event held on September 13, 2023, in which several different vendors attended and provided presentations and their capabilities. As a result on these occurrences, there are multiple sources in addition to the existing

Based on the market research effort and market research document finalized from June 2024 from the IPT, maximum competition for the follow-on acquisition is anticipated.

(9) Any other facts supporting the use of other than full and open competition.

The Strategic Acquisition Center is actively working on a long-term follow-on contract. In the interim, a bridge contract will ensure that the continued services are provided to prevent a disruption in providing the VHA healthcare actuarial support services utilized across various agencies. These services are essential to accomplishing the VA mission

(10) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

Milliman, Inc. is currently contracted for actuarial services and has expressed interest in a bridge contract to ensure the continuity of critical services. Additional sources are interested in the follow-on competitive acquisition as indicated by ongoing market research.

(11) A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

The Government will continue to pursue efforts to compete under full and open competition and award the follow-on requirement. This will incorporate communications and competition efforts to include multiple businesses as applicable.

(12) Evidence that any supporting data that is the responsibility of technical or requirements or other rationale for an exception to fair opportunity) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.

I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

(13) Contracting officer certification that the justification is accurate and complete

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Approval four above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition. As this action does not exceed $75M, the certification below required by FAR 6.304 serves as approval.