By Abigail Smith,

Last year at this time, the FedHealthIT team made three bold predictions for the Federal Health IT market in 2016, related to the delays on CMS SPARC, transparency at DHA, and the challenging environment we expected 18F and VA Digital Service would face – you can see our predictions from last year by clicking here.

This year, our crystal ball is a bit hazier… as few have much insight into how the new administration will operate, but here goes with our team’s three predictions for 2017.

#1 – Workarounds will be developed for the VA’s  “Rule of Two”

No, there will not be any Supreme Court reversal on Kingdomware and the Rule of Two is not going anywhere, but the current environment where nearly every RFP is set aside for SDVOSBs will slow. Leaders from both government and large business continue to identify, evaluate, and test a range of acquisition strategies to help get around this rule, and once a weakness is identified the flood gates will open. There are too many smart people involved and there is too much money on the line for many of the established firms to walk away. The first half of 2017 at VA will continue to be dominated by SDVOSBs.

#2 – Agile acquisition approaches will only increase

We can hear the groans now from Baltimore to DC as many wish these approaches would be swept out with the new administration. That is unlikely. With a slew of former commercial sector business leaders taking lead roles across the government, there will be little patience for the arcane and convoluted acquisition processes in place today. The FAR is not going to be thrown out anytime soon, but with ample air cover from the highest levels we expect these leaders to push forward with aggressive agendas and to work with the acquisition organizations, contract vehicles and leaders that can help make their ideas a reality. If 18F can hang on, this group, or some of the remaining disciples, are well positioned to support these efforts.

#3 – The Fed Health IT market will slow way down… before really heating up

Outside of a few bright spots in DHA and the T4NG bubble, FY 2017 will be a tough year for many Federal Health IT and consulting firms as the transition creates a level of paralysis for both government and industry leaders until a new agenda is set. Smaller firms and those not committed to the Federal Health market will look elsewhere and even established firms will limit investment and focus on organic growth until a new direction is set. The good news is that the lull will be short-lived and things will start to pick up the last few months of 2017, before really taking off again in early FY2018.

While there will be great turmoil this year during the transition, we do expect much to get settled as key vehicles such as CMS SPARC, CIO-SP3 SB On Ramp, and Alliant 2 all get awarded. With a new set of contractors and vehicles finally in place, the opportunity to have some level of continuity over the next 5-10 years will be appreciated by government and industry.

One reminder is that G2Xchange is hosting a set of four transition working groups for industry focused on HHS, VA, CMS, and DHA. If you are a G2X member and are interested in participating, send an email to to be added to the list. These groups will kick off in January.

Have a great holiday and prepare to buckle up as 2017 is going to be a bumpy, but entertaining ride.

Disagree with our predictions? Like what we had to say? Comment below.



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