VA Awards ASM Research a Health IT Contract Triple the Price of Competitors’ Bids

The Veterans Affairs Department awarded ASM Research a $162.5 million contract to improve the user experience for VA’s electronic health record system, a price more than triple two competitive bids, Nextgov has learned. The Sept. 30 contract award is for improvements to the Veterans Health Information Systems and Technology Architecture, known as VistA.

HP Enterprise Services and Triple-I of Overland Park, Kansas, each submitted bids under $50 million on the contract won by ASM, two independent sources told Nextgov. The companies competed for the VistA work through task orders issued under a $12 billion IT umbrella contract known as Transformation Twenty-One Total Technology, or T4. The T4 contract, awarded to 16 companies in June 2011, is an indefinite delivery, indefinite quantity contract that gives the department considerable flexibility in awarding technology deals.

The VistA enhancement contract calls for a new graphical user interface that will display a wide range of patient information. It also calls for other tasks one source described as so general it would allow the department to use ASM for a wide range of work without further competition.

On Oct. 28, a month after VA awarded the contract to ASM, David Waltman, a senior program officer within the Veterans Health Administration’s Office of Information and Analytics who had done preliminary work on that contract, sent an email to colleagues at VA and the Defense Department telling them he would leave government service Nov. 2 to take a job as chief strategy officer for ASM. In his email, Waltman said, “At ASM, I will be able to help ensure that the government receives the highest quality product possible for the VistA 4 User Experience. Team ASM has incredible partners in this effort, including Agilex, Inc., who have a great track record of delivering quality software for VA. It will be a privilege to work with them.”

Joanne Veto, a spokeswoman for Accenture Federal Services, which acquired ASM Research on Sept. 13, said in a emailed statement that, “We asked for and received an ethics opinion from the VA’s Ethics Office before hiring Mr. Waltman.”

She provided Nextgov with a letter from Christopher Britt, a deputy ethics official at VA, to Waltman that states “there is nothing in relevant ethics law to preclude Mr. Waltman from joining ASM Research.”

Britt’s Oct. 8 letter to Waltman, a GS-15 senior supervisor, acknowledged that Waltman “provided technical advice to the program manager developing the performance work statement (PWS) for the VistA 4 User Experience (VistA UX) contract.”

That advice included recommendations about the type and scope of deliverables included in the work. Britt’s letter noted, “this was your only involvement with the VistA 4 UX contract.”

After the contract was awarded, Britt noted ASM offered Waltman “a position as a technical lead, which would require you to interact with government project managers, engineers, and clinical subject matter experts for execution on the VistA 4 UX contract. Regarding your current supervisory responsibilities, you are not responsible for the VistA4 UX contract and none of your subordinates have participated in the VistA4 UX contract or are assigned to that contract.”

Britt went on to explain that ethics laws do not prevent Waltman from taking a position with ASM. “Further, the procurement integrity restrictions prohibiting the acceptance of compensation from entities with which you had certain involvement in procurement in excess of $10 million do not apply,” Britt wrote.

VA spokeswoman Jo Schuda said Waltman was not part of the source selection evaluation, nor was he the source selection decision authority on the ASM contract award. Asked why VA would award the contract to the highest bidder, Schuda replied in an email that, “VA conducted a standard competitive best value process for awarding this contract where cost is one of many consideration in determining the best proposal to fill the Department’s requirement.”

In February 2012, VA abruptly canceled a $102.6 million contract with ASM to develop middleware for a planned integrated electronic health record with the Defense Department. The decision to cancel the contract stemmed from a potential organizational conflict of interest with subcontractors who had worked for the Military Health System when that contract went out for bid.

Sources told Nextgov that ASM has tapped Agilex as its key subcontractor for the VistA user experience contract. Roger Baker, who served as VA chief information officer from May 2009 through March of this year, joined Agilex as its chief strategy officer on April 3.

In an email statement, an Agilex spokesman said, “In accordance with federal law and policy, Roger Baker has played absolutely no role in our proposal activities at the U.S. Department of Veterans Affairs. As with all [President] Obama political nominees, Mr. Baker is subject to, and has fully complied with, the most stringent post-employment restrictions in government history. Furthermore, Mr. Baker’s prospective employment with Agilex was fully reviewed and approved by VA’s Ethics Office. Finally, Agilex has put in place and maintains additional firewalls to prevent Mr. Baker’s participation in any prohibited activities. This includes a conflict-of-interest (COI) mitigation plan that was presented to VA’s Technology Acquisition Center.”