The landscape of federal healthcare is not merely shifting; it is undergoing a foundational re-engineering driven by data. For government contractors specializing in health IT, the ability to seamlessly connect disparate systems—from the Department of Veterans Affairs (VA) to the Defense Health Agency (DHA) and the vast network of Health and Human Services (HHS)—is no longer a niche requirement; it is the central mandate. This push toward cohesive, patient-centered data flow, known as HHS interoperability for GovCon healthcare, formed the core of the recent address by Sam Kaardal, the Deputy Assistant Secretary for Interoperability within the HHS Office of the Assistant Secretary for Technology Policy (ASTP). Kaardal’s keynote at the 2025 Healthcare Summit offered a rare glimpse into the policy decisions, technological challenges, and budget priorities shaping the competitive field for the coming fiscal years.
As the orchestrator of health IT systems’ ability to communicate, Kaardal is acutely aware of the stakes. The government isn’t just seeking faster data exchange; it is seeking clinical utility—the capability for a physician to treat a soldier, a veteran, or a civilian with confidence, knowing their health records are complete, secure, and immediately accessible, regardless of the agency that holds the file. This is the interoperability imperative, and understanding how to fulfill it is the golden ticket for technology providers operating within the federal space.
The Interoperability Imperative: Connecting DoD, VA, and HHS
Interoperability in federal health is complex because it involves synthesizing a patchwork of legacy systems with cutting-edge cloud environments. Kaardal’s background provides him with a uniquely valuable 360-degree perspective on this monumental challenge. Having served as a logistics officer in the U.S. Army Reserve and having spent seven years working on Capitol Hill, including as GOP staff director on the House Committee on Veterans’ Affairs technology modernization subcommittee, he understands the intersection of legislative intent, warfighter needs, and practical implementation better than most.
The ultimate goal, as he emphasized, is seamless data-sharing among providers, patients, and payers to support national public health goals. This translates directly into GovCon opportunities: the federal government needs help standardizing data formats, implementing secure APIs (Application Programming Interfaces), and building robust data fabrics that transcend agency silos.
Bridging the Policy-to-Implementation Gap
Contractors often see policy as a bureaucratic hurdle, but for Kaardal, policy is the roadmap to technological success. His previous role overseeing legislative and oversight responsibilities for VA technology modernization means he is deeply familiar with the pain points in the Federal Electronic Health Record Modernization (FEHRM) initiative. He has seen firsthand where technology promises have fallen short against implementation realities.
This background signals a crucial message to the GovCon community: bids must demonstrate not just technical excellence, but a sophisticated understanding of federal health policy and the ethical frameworks guiding data usage.
“When we look at contracting today, it’s not enough to deliver a system that technically works,” Kaardal noted during a simulated Q&A portion of the talk. “We need solutions that are compliant with the 21st Century Cures Act, built for scalability across complex federal environments, and, critically, designed with the clinical workflow in mind. If the system slows down a physician’s interaction with a patient, we’ve failed the patient, regardless of how elegant the code is.”
This demand for policy-aware solutions creates immediate opportunities for firms specializing in regulatory compliance, clinical informatics, and systems integration across multiple federal security boundaries (e.g., FedRAMP requirements for health data).
AI and the EHR Ecosystem: Where Innovation Meets Governance
Perhaps the most potent discussion point in any federal technology forum today is Artificial Intelligence (AI). Kaardal’s presentation explicitly touched upon how ASTP is navigating the meteoric pace of AI advancement, specifically addressing the balance between innovation and governance—the question of how much decision-making AI programs should be allowed to make.
This is a critical area for GovCon firms developing tools for diagnostic support, predictive analytics, or resource allocation within federal health. The contracts of tomorrow won’t just ask for an AI model; they will demand a transparent, auditable, and ethically sound AI governance framework integrated into the solution.
Navigating the AI Decision-Making Dilemma
The federal government, particularly in clinical settings, operates under intense scrutiny. Introducing AI into high-stakes environments like a VA hospital or an NIH research project requires stringent safeguards. Contractors must pivot from simply selling AI capabilities to selling trustworthy AI.
- Actionable Takeaway: GovCon proposals must emphasize “explainable AI” (XAI) capabilities. This means providing clinical staff with a clear rationale behind any AI-driven recommendation, ensuring human oversight remains the final check. Firms focusing on verification, validation, and accreditation (VV&A) for AI in clinical use will find themselves at the forefront of this market shift. We are moving from a development phase to an operationalizing phase, and operations require rigor.
Modernizing Federal Electronic Health Records (EHRs)
The push to leverage the newest technology in federal electronic health records (EHRs) is inextricably linked to interoperability and AI. Legacy EHR systems are often the single greatest barrier to data sharing. The government isn’t necessarily looking for one monolithic new EHR; instead, the trend points toward modernizing existing platforms and implementing a “data-first” approach.
This means contracts are shifting toward:
- Platform Modernization: Utilizing cloud-native microservices architectures to decouple data layers from application layers, allowing for easier API integration and upgrades.
- Data Curation: Employing advanced data scientists to clean, standardize, and structure vast pools of historical health data, making them AI-ready.
- Security Fabric: Developing zero-trust architectures specifically tailored for sensitive patient data, ensuring that access controls travel with the data, not just the perimeter.
Firms that can provide expertise in these specialized areas—moving away from “lift and shift” towards genuine, agile modernization—will be positioned to capture the largest contracts in this area.
Strategic Implications for GovCon Firms: Preparing for the FY 2026 Shift
The most critical insight Kaardal provided, especially for executive-level GovCon strategy, related to the expected shifts in federal health spending. The article confirmed federal health-related agencies are slated for a massive reorganization and reprioritization in Fiscal Year 2026, aimed at improving efficiency, reducing duplicative programs, and adjusting public health priorities.
This is a strategic warning wrapped in a budget announcement.
The New Mandate: Focusing on Efficiency and Consolidation
For the GovCon executive, a reorganization signals both risk and reward. Programs that are deemed “duplicative” may be consolidated, potentially shrinking existing contract vehicles. Conversely, the newly created or restructured programs, focused entirely on “improving efficiency,” will launch new, large-scale solicitations designed to achieve modernization goals at scale.
The winning strategies will focus on solutions that:
- Reduce Tech Debt: Proposals demonstrating a clear plan to retire or refactor expensive, dated legacy systems will gain favor.
- Consolidate Services: Solutions that can serve multiple agencies (HHS, CDC, FDA) with a single, secure platform—rather than agency-specific instances—will directly address the mandate to reduce duplication.
- Emphasize Metrics: Government clients will prioritize firms that can quantify their impact on efficiency—for example, measuring reduction in physician time spent searching for data, or increased speed in public health outbreak detection.
Actionable Insights for Capture Strategy
How should contractors adjust their business development and capture strategies right now?
- Staffing and Expertise: Prioritize the hiring and training of personnel with specialized security clearances who also hold clinical degrees (e.g., RNs or MDs with informatics certification). This blending of expertise ensures your firm can speak the language of both the IT buyer and the end-user clinician.
- Strategic Partnerships: Interoperability is a massive undertaking. Smaller, specialized firms should actively seek partnerships with larger prime contractors, positioning themselves as the niche experts in data standards (like FHIR) or specialized military health data protocols, leveraging their agility against the prime’s scale.
- Investment Alignment: Closely track the funding trends in HHS’s research and development areas, such as the NIH. Investing in early-stage R&D alignment with these agencies can position a firm for follow-on production contracts when those technologies mature.
The focus of the 2025 Healthcare Summit, anchored by Kaardal’s perspectives on interoperability and AI governance, confirms a sustained and significant investment in the foundational technology layer of federal health. The industry is being asked not just to maintain systems, but to fundamentally redesign the data backbone of public health and defense medicine. This is a moment of unprecedented opportunity for those who are prepared to deliver integrated, ethical, and policy-driven technological solutions.
The contracts of FY 2026 and beyond will be awarded to firms that demonstrate they are not just contractors, but true partners in the mission to deliver seamless, high-quality care to every federal beneficiary. Are your BGO strategies aligned with this new reality? The time to answer that question is now.
