So you want to sell your product to the federal marketplace: now what?
The federal marketplace for healthcare and bioscience products is a large ecosystem. There are local, regional, and national systems, a variety of contract vehicles used, and plenty of federal stakeholders involved in the process. There is no single pathway that represents how every product is procured, but from a manufacturer’s standpoint, it is best to start with fundamentals and build out from there. The following questions are key when assessing the fundamentals for a federal marketplace strategy as an innovator of medical and bioscience products.
First, let us first define what a federal stakeholder is: any clinician, user, technician, or acquisition personnel involved in procurement of a product. We’ll go into more detail in a bit.
Next let us define the agencies under which the federal customers do business.
The Department of Veterans Affairs (VA) – Consists of 171 main VA Medical Center, 1,113 Outpatient Clinics, and growing.
The Department of Defense (DoD) – The DHA (Defense Health Agency) administers 721 MTF’s (Medical Treatment Facilities) in the United States, and 109 outside of the United States.
Indian Health Service (IHS) – Consist of 990+ main Health Care Facilities, clinics, and service stations.
There are several other agencies such as the National Institute of Health (NIH), Center for Disease Control (CDC), Department of State (DoS), Department of Justice (DoJ) that are potential buyers.
Question #1 Is there currently a demand for our products and services in the federal marketplace?
The answer might seem like a given yes, but that is not always the case. Working with the federal government involves contracts in which prices and terms are set, and amending those prices has restrictions and can take time. Because of this, there is a trade-off that exists between federal and non-federal markets for any given medical product or service. Committing to both markets is a strategic decision.
Question #2 What contracts does the federal government use to purchase the products or services in my market?
As the industry innovates over time, the federal acquisition framework also does. The federal stakeholders at the local and regional level ALL use national contracts that are not administered at their level. Two agencies to focus on at the national level are the National Acquisition Center (NAC), and the Defense Logistics Agency (DLA).
The NAC administers the Federal Supply Schedules (FSS) which include separate catalogs for MedSurg, Pharmaceutical, dental, laboratory, equipment, and patient mobility. They can order off schedule from GsaAdvantage.gov with a credit card for anything under $10,000.00, and go through a market solicitation process for anything over $10,000.00. For non-medical products, the government uses an MAS (Multiple Award Schedule) instead of the FSS.
The DLA administers the ECAT (Electronic Catalog) contract vehicle and the DAPA (Distribution and Pricing Agreement). Other DLA methods are contingency contracts, DIBBS, FedMall, and open market solicitation processes. This is a helpful matrix showing all the DLA methods.
National contracts aside, local and regional federal buyers can still use credit cards, local and regional contracts like a BPA (Blanket Purchase Agreement), or VISN regional contracts (Veteran’s Integrated Service Networks).
Using a bottom-up approach, the quickest way to find out what methods are used to buy your product is to ask both the federal stakeholders directly and distribution partners familiar with your product’s market.
Question #3 Who are the internal federal government stakeholders involved in procuring my product or service?
Who primarily uses or prescribes the product? Surgeons, physicians, pharmacists, nurses, PT/OT, and other clinicians are going to be the most direct stakeholders for your product. Other direct stakeholders might be department based like sterile processing or safe patient handling.
In addition to the primary, the secondary stakeholders can also be useful contacts. These personnel assist the primary stakeholders in the procurement process and provide the due diligence by applying the FAR (Federal Acquisition Regulations), product compliance, market research, and contract expertise
The secondary stakeholders include department business managers, logistics/acquisitions departments, contracting specialists and officers, and biomedical technicians among others.
For more information, contact:
Matt Palmieri
matt@emercymedical.com
