In 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act (PPACA), commonly referred to as the Affordable Care Act or ACA. ACA brought significant changes to workers, employers and government agencies across the country at the federal, state and local level. With over 20 million Americans having secured coverage under ACA by mid-year 2014, we looked into the Onvia database to understand the impact ACA has had on state and local government procurement and identify which industries have experienced the most opportunity growth as a result of the new law.

State & Local Affordable Care Act Contract Volumes by Year

For our research, we looked at a bundle of specific terms around the Affordable Care Act, specifically "PPACA", "Affordable Care Act", "Patient Protection and Affordable Care Act" and "Obamacare." At the state and local level, bid & RFP activity started showing up in 2012. The number of mentions of ACA-related terms by year is broken out below:

ACA related state and local bids chart

Industries with the Highest Volume of Affordable Care Act Opportunities

When we looked at the break down of Affordable Care Act contracts by type of work, we started to see an interesting shift in the type of work associated with ACA over the three year period. Most notable is that IT/telecommunications was not one of the top six industry categories in 2012, but became the 4th most popular category in 2013 and the 3rd most popular category in 2014. Similarly, construction services and architecture & engineering services were popular industries for ACA procurement in 2012, but have become less common as ACA adoption has progressed. This is a logical finding; most of the capital improvements related to new construction or facility improvements were done early on in ACA adoption. Now the market is shifting to the management and operations phases of ACA program implementation which requires a greater share of consulting services, IT/telecommunications and business services. Readers can see the top six categories of work for each year in the chart below.

Top six industries of ACA related state and local contracts chart

Examples of Projects for the Top Six ACA Industries

To help paint a picture of the ACA related procurement in state & local government, we identified six examples of projects, one from each of the top industries mentioned above over the three year span.

1) Affordable Care Act exchange marketing and outreach

Industry: Business & Consulting Services
Agency: State of Nevada, Department of Administration

The State of Nevada released a RFP in September 2012 “seeking proposals from integrated marketing and advertising firm(s) to facilitate the Exchange’s Marketing and Outreach Campaign and meet the goals of awareness and enrollment listed herein,” going on to state, “Historically, many individuals and families who are eligible for the largest federal subsidies have not responded to traditional advertising and outreach methods. A portion of this RFP will be evaluated on the vendor’s ability to reach the greatest percentage of eligible Nevadans in the most efficient and fiscally responsible manner. Special provisions are included in the ACA for Nevada’s Native American population; reaching out to and inclusion of all 27 federally recognized tribes in Nevada is a requirement of this RFP.”

The contract was awarded for $6,000,000 to KPS3, Inc.

2) Risk adjustment actuarial services

Industry: Financial Services & Insurance
Agency: State of Oregon, Department of Administrative Services

The State of Oregon’s Department of Consumer and Business Services (DCBS) published an RFP in December 2011 “seeking proposers to provide actuarial services, exclusively related to health insurance. The purpose for this Solicitation is to provide consulting services in conjunction with health rate filings. The successful proposer will conduct a study of the Affordable Care Act (ACA) impact on Oregon's health insurance market and develop models for risk adjustment and reinsurance and apply Oregon specific data to determine impact.”

The contract was awarded to Wakely Consulting Group on 4/6/2012 for $400,000.

3) Professional Services Related to Addition and Reovation of Yakima Neighborhood Health Services Facilities

Industry: Architectural & Engineering Services
Agency: Yakima Neighborhood Health Services, Yakima, WA (Special District)

In June 2012, Yakima Neighborhood Health Services (YNHS) requested: “Statements of Qualifications (SOQ) from qualified Architectural & Engineering firms to provide professional services related to drawings and specifications for an approximate 9,000 SF addition and minor renovation project of an existing facility (6,200 SF) located in Sunnyside, Washington.” The agency was seeking vendors who had experience with medical services and, specifically, community health centers.

According to the RFP, the project was funded by a federal grant award under the Affordable Care Act.

4) Consulting Services for the Affordable Care Act

Industry: Healthcare & Medical Equipment
Agency: State of Ohio, Department of Administrative Services (on behalf of Ohio Department of Health)

In August 2013, the State of Ohio sought a vendor to “perform professional services to work with ODH leadership to identify the programmatic and financial impacts of the Affordable Care Act (including impact of adopting or not adopting Medicaid Expansion) in regard to public health and the programs currently being supported by ODH.” The RFP also requests that the vendor work with ODH contract managers to research the Affordable Care Act with regard to citizen healthcare such as the state’s “Help Me Grow” program and programs focused on children with medical handicaps, HIV/AIDS, breast and cervical cancer, immunizations, etc.

No maximum contract value was specified in the RFP.

5) Building and Site Improvements for Pullman Health Center Facility

Industry: Construction Services & Building Supplies
Agency: Chicago Family Health Center (a community-based Federally qualified health center)

In February 2012, Chicago Family Health Center published a bid with a scope of work for  “a new 21,780 SF, two-story primary care facility, site improvements including a new off-site parking lot, demolition of the existing facility and new on-site parking and landscaping. All of the work will be performed to comply with the USGBC Leadership in Energy & Environmental Design (LEED) program at the Silver level. Positive efforts shall be made by the general contractor to utilize small businesses, minority-owned firms and women's business enterprises and to employ residents of the South Chicago neighborhoods.”

Construction costs were expected to be under $6,600,000 and the bid stated, “Major funding for this project is provided by the US Department of Health and Human Services, Health Resources and Services Administration through a $6,257,249 grant from the Affordable Care Act.”

6) Affordable Care Act Workforce Tracking and Reporting Solutions

Industry: IT/Telecommunications
Agency: State of Nevada, Department of Administration

Frederick County Public Schools has 66 schools serving 40,000 students and over 8,000 employees and, in April 2014, published a solicitation requesting “services of a qualified vendor to provide services and software associated with eligibility tracking, cost and risk modeling, unintended impact monitoring, compliance reporting, and ongoing support as it pertains to the Affordable Care Act.” It went on to say, “FCPS is seeking a software solution to assist our staff in understanding the options, impacts, as well as, quantify potential consequences of impending decisions. The services and software will need to be flexible in order to allow for FCPS existing business practices and any legislation changes that may occur.”

Four companies submitted bids on the project and agency staff recommended in June 2014 to award the contract to eThority (Equifax) for a two-year period expiring in 2016 with an option to renew for an additional two-year period. Funding source was the Board of Education’s self-insurance fund, funded by the Board of Education and employee/retiree contributions.

Contract value was approximately $33,000.00 in Year 1 and $18,900.00 in Year 2. eThority was the lowest-cost proposal of the four submitted bids.

A Varied Set of Projects Await Vendors in this Market

With such sweeping implications of the Affordable Care Act, vendors who are seeking out opportunities in this market should have ample projects for years to come. Over the three year period, Onvia tracked projects mentioning the Affordable Care Act in 40 states across the country, but most states had five or fewer projects put out for bid. The most active states were New York, California, Massachusetts, Illinois and Florida, averaging 29 projects each, showing the growth potential in contract volume as additional states move from early to more mature adoption and management of ACA practices within their state.

Vendors looking to participate in ACA-related contracting opportunities should be actively monitoring agency budgets for mentions of upcoming work before projects are put out to bid and tracking expiration dates of existing term contracts that are coming up for renewal. Many of the project specifications that we examined expressed preference for vendors with expertise around the Affordable Care Act and many others looked for vendors with knowledge about the geography or district affected by the work – both signals that vendors would be best served by having adequate time to research and propose tailored solutions to government buyers. Government vendors seeking Affordable Care Act contracting opportunities can leverage Project Center to discover past awards and active contracts in this market, Term Contract Center to track active term contracts coming up for expiration and Spending Forecast Center to identify agency capital expenditures budgeted for the years ahead that are related to Affordable Care Act spending.