TL;DR: The VA alone obligates an estimated $44 billion+ per year in contracts. The Defense Health Agency manages a $40 billion budget. Between medical supplies, health IT, staffing, and telehealth, federal healthcare procurement spans dozens of NAICS codes and contract types. Browse healthcare tenders to see current opportunities.

The Federal Healthcare Market

Federal healthcare spending is enormous, and most of it flows through contracts to private companies. Three agencies dominate:

Department of Veterans Affairs (VA) operates 1,300+ health facilities and is the largest integrated healthcare system in the US. The VA awarded an estimated $44 billion+ in prime contracts in FY2024, covering everything from pharmaceuticals to EHR systems to clinical staffing. (Source: VA OSDBU)

Defense Health Agency (DHA) manages the Military Health System, serving 9.6 million active-duty personnel, retirees, and dependents through TRICARE. The Defense Health Program budget for FY2025 is $40.3 billion. TRICARE's 13 managed care contracts are collectively valued at approximately $168 billion including all option years. (Source: GAO-25-107370)

Department of Health and Human Services (HHS) — which includes NIH, CDC, CMS, and FDA — spent approximately $40 billion per year in contracts between FY2021-FY2024. Small businesses received 24.83% of HHS prime contract dollars in FY2024, exceeding the 22% target.

What the Government Buys

Healthcare procurement isn't just medical devices. The federal government contracts for:

Medical Supplies and Equipment

Disposable surgical instruments, respiratory equipment, PPE, hospital beds, imaging equipment, and lab supplies. The VA and DLA (Defense Logistics Agency) are the primary buyers. DLA Troop Support handles medical supply distribution for the entire military.

Pharmaceuticals

Drugs and biologicals were the #1 product category purchased by civilian agencies in FY2024, according to the GAO contracting snapshot. The VA negotiates drug prices through its Federal Supply Schedule and buys in bulk. AmerisourceBergen held a $6 billion contract for the DLA TRICARE Pharmacy Program.

Health IT Systems

EHR modernization, cybersecurity, claims processing (CMS), telehealth platforms, and data analytics. HHS alone spent $559.9 million on custom computer programming (NAICS 541511) across 280 awards. The VA's Oracle Cerner EHR implementation is one of the largest health IT contracts in federal history.

Clinical Staffing

VA Schedule 621 I covers contract staffing for physicians, nurse practitioners, EMT paramedics, dental services, respiratory therapists, physical therapists, and nursing assistants. This is a significant market for healthcare staffing agencies.

Telehealth Services

Telehealth grew rapidly post-pandemic and remains a growing procurement category. Contracts cover virtual care platforms, remote patient monitoring, and telemedicine equipment under NAICS 621999.

Research and Consulting

NIH funds billions in research contracts. AHRQ (Agency for Healthcare Research and Quality) contracts for health services research and evidence reviews. Professional advisory services span health policy, quality improvement, and program evaluation.

NAICS Codes for Healthcare Contracting

Medical Devices and Supplies

NAICS Code	Description
339112	Surgical and Medical Instrument Manufacturing
339113	Surgical Appliance and Supplies Manufacturing
339114	Dental Equipment and Supplies Manufacturing
423450	Medical and Hospital Equipment Wholesalers

Healthcare Services

NAICS Code	Description
621111	Offices of Physicians
621999	All Other Ambulatory Health Care (including telehealth)
622110	General Medical and Surgical Hospitals
561320	Temporary Staffing Services (healthcare staffing)

Health IT

NAICS Code	Description	Federal Spending
541511	Custom Computer Programming	$5.85 billion government-wide
541512	Computer Systems Design	$2.62 billion government-wide
541519	Other Computer Related Services	$7.57 billion government-wide
511210	Software Publishers	$1.1 billion at HHS alone

For a complete guide to selecting the right codes, see Understanding NAICS Codes.

Small Business Opportunities

The VA is the most veteran-friendly agency for small business contracting — by a wide margin.

Key fact: The VA awarded $10.2 billion to service-disabled veteran-owned small businesses (SDVOSBs) in FY2024 — 23% of all VA prime contract dollars. That's nearly five times the 5% statutory goal. (Source: VA OSDBU)

The VA's "Veterans First" contracting program (VAAR Subpart 819.70) mandates that VA contracting officers give priority to verified SDVOSB and VOSB firms before opening competition. If you're a veteran-owned healthcare company, the VA should be your primary target.

Beyond the VA, HHS exceeded its small business goal across all programs in FY2024. Healthcare small business set-asides exist for:

8(a) — socially and economically disadvantaged firms
HUBZone — businesses in underserved areas
WOSB/EDWOSB — women-owned businesses
SDVOSB — service-disabled veteran-owned businesses

For certification details, read our set-aside contracts guide.

How to Find Healthcare Contracts

SAM.gov

Search by healthcare-specific NAICS codes (listed above) or use Product Service Codes:

PSC	Description
6515	Medical and Surgical Instruments
6530	Hospital Furniture and Equipment
6532	Hospital and Surgical Clothing
Q201	Medical — General Healthcare
Q301	Medical — Pharmaceuticals

GovBid

Browse healthcare tenders — GovBid classifies opportunities into the Healthcare & Medical industry category automatically. You can also set up free daily alerts filtered to healthcare.

VA-Specific Resources

VA OSDBU — va.gov/osdbu publishes forecasts, upcoming opportunities, and small business events
VA Federal Supply Schedules — pharmaceutical and medical supply schedules have dedicated solicitation processes
VA PTAC counseling — PTAC offices offer free guidance on VA contracting

Getting Started: A Practical Path

Register on SAM.gov with your healthcare-relevant NAICS codes. If you're a SDVOSB, complete VetCert — it's mandatory.
Start with supplies or staffing. Medical supply contracts and staffing task orders are more accessible entry points than large IT system implementations.
Target contract values under $350,000. These use simplified acquisition procedures (the threshold was raised to $350,000 in October 2025) — shorter proposals, faster evaluations.
Consider subcontracting first. Prime contractors on large VA and DHA contracts have small business subcontracting goals. Reach out to primes in your specialty.
Set up monitoring. Healthcare contracts appear on SAM.gov, VA eBuy, and DLA's internet bid board. Or use GovBid to receive daily matched alerts.

Common Mistakes

Ignoring VA-specific rules. The VA has its own acquisition regulation (VAAR) with provisions that don't exist in other agencies. The Veterans First program, for example, is unique to the VA.
Pricing without understanding FSS. If you sell medical products, research the VA's Federal Supply Schedule pricing before bidding. FSS prices are typically 24% below commercial rates.
Not attending industry days. VA and DHA regularly host events for small businesses. These sessions reveal upcoming procurements before they're posted.
Underestimating compliance requirements. Healthcare contracts often require FDA registration, ISO 13485 certification, HIPAA compliance, or accreditation. Verify requirements before investing in a proposal.

The Bottom Line

Federal healthcare is one of the largest procurement markets in the world. The VA, DHA, and HHS collectively spend over $100 billion annually on contracts. The small business opportunity is real — the VA alone directed $10.2 billion to veteran-owned firms in a single year. If you provide healthcare products, IT, or services, federal contracts should be part of your revenue strategy.

Government Contracts for Healthcare & Medical Suppliers