I remember my first experience with government medical record digitization. While I was in the Army, all of our medical records were digitized, but for some reason, none of the vaccination history was transferred. The powers that be made the decision that it was easier to re-vaccinate everyone than try to recreate their shot records from scratch. Our unit spent the next two days in line getting shots.
The VA is looking to modernize its health records (again). As part of the Trump administration’s proposed budget (which is in the news for entirely different reasons), the VA is asking for an IT budget of $12.2 billion, which is a 62% increase over its last request. Included in this budget is $4.2 billion for the VA’s Electronic Health Records Modernization initiative. Also looking to significantly increase IT spend are the Departments of Justice and Treasury. In total, the administration is requesting $7.7 billion more in civilian agency IT spending than the expected 2026 IT expenditures.
It is unlikely that the final budget for 2027 will look the same as the administration’s proposed budget. However, the inclusion of a significant increase in IT spending is good news for government contractors. A concerted effort to modernize government IT systems means significant opportunities for companies positioned to take advantage.
How should government contractors position themselves? First, they should identify the type of contracts they would be competitive for. This includes an analysis of past performance, representative engagements, and other qualifications. This should also include compliance requirements that the contractor can meet, such as CMMC or any ISO certifications.
Second, contractors should make sure that they have access to the contracting vehicles that the government will use to spend the money that the administration is requesting. This includes the GSA Schedule, NASA SEWP, OASIS, and others. Some of these vehicles are open now. Others are not, but partners are available. Government contractors should identify the appropriate vehicles and either apply or seek out partners that already have access.
Third, contractors should make sure they have capabilities that the government will seek. This does not mean bleeding edge technology, although there will be a need for that. Many government systems are of legacy vintage and there will be opportunities to modernize those, as well.
If you are a government contractor, or even a commercial IT vendor, with questions on how best to position yourself for these opportunities, reach out to the author at bgraves@centrelawgroup.com, or any other Centre attorney.
