Cerner, Leidos, Accenture Win $4.33 Billion DoD EHR Contract
By Christine Kern, contributing writer
The contract provides service to 55 hospitals and 600 clinics and must be interoperable with other EHRs.
The Department of Defense (DoD) has awarded a highly-anticipated and lucrative $4.33 billion EHR contract to the bidding team of Cerner, Leidos, and Accenture. The contract’s initial piece, valued at $4.3 billion, calls for the team to provide “an electronic health record off-the-shelf solution, integration activities and deployment across the Military Health System,” a DoD spokesperson Healthcare IT News.
The bidding war was narrowed to three contenders in March, when The Department of Defense (DoD) issued a narrowing of solicitation notice eliminating some teams from the bidding process for its lucrative $11 billion EHR modernization contract. The remaining teams included Epic Systems teamed with IBM; Allscripts aligned with Computer Sciences Corp. and Hewlett-Packard; and the winning team of Cerner, Leidos, and Accenture.
While the initial lifecycle costs of the award were anticipated at $11 billion, the actual award was for just a fraction of that amount: $4,336,822,777, according to FCW.
“Market share was not a consideration,” DoD Undersecretary for Acquisition, Technology and Logistics Frank Kendall said. “We wanted minimum modifications.”
HIT Consultant reports the total project estimate is $9 billion for the 18-year life cycle, according to Kendall. The awarded contract includes an initial two-year ordering period, a pair of three-year options, and the possibility of a two-year award term, bringing the total contract period to ten years. According to the terms of the contract, only one-third of it will be for a fixed amount, with the remainder being provided on a “cost plus” basis, typical of DoD contracts.
A crucial piece of the contract award was the requirement that the DoD EHR must be interoperable with other private sector systems, ensuring that the 60-70 percent of care that occurs outside the DoD is still communicating with government agencies.
Assistant Secretary of Defense for Health Affairs Jonathan Woodson, MD, said, “A commercial product gives up the opportunity to take advantage of the private sector innovation. This is crucially important. What we’re doing today will help advance the public preparedness. The private sector is becoming more prepared, but we’ll accelerate that work.”
Kendall also explained, “This is going to be an event-driven program, dependent on the availability of resources by the military and the contractors. We’re not going to take risks to meet a schedule.”
The project is anticipated to commence with the deployment of eight military facilities in the Pacific Northwest, going “live” by the end of 2016, with a complete implementation across the approximately 1,000 sites of the Military Health System by 2022.