VA awards $173.7M for EHRM functional baseline design and development to Oracle Health Government Services

Contract Overview

Contract Amount: $173,735,617 ($173.7M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-09-18

End Date: 2023-09-17

Contract Duration: 1,825 days

Daily Burn Rate: $95.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF TASK ORDER 36C10B18N0005 UNDER THE EHRM IDIQ CONTRACT 36C10B18D5000 TITLED FUNCTIONAL BASELINE DESIGN AND DEVELOPMENT,INCLUDES BUT IS NOT LIMITED TO: PROJECT MANAGEMENT; WORKFLOW, TRAINING AND CHANGE MANAGEMENT; VALUE MANAGEMENT; AND EHRM STAKEHOLDER COMMUNICATIONS.

Place of Performance

Location: KANSAS CITY, WYANDOTTE County, KANSAS, 66111

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $173.7 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: IGF::OT::IGF TASK ORDER 36C10B18N0005 UNDER THE EHRM IDIQ CONTRACT 36C10B18D5000 TITLED FUNCTIONAL BASELINE DESIGN AND DEVELOPMENT,INCLUDES BUT IS NOT LIMITED TO: PROJECT MANAGEMENT; WORKFLOW, TRAINING AND CHANGE MANAGEMENT; VALUE MANAGEMENT; AND EHRM STAKEHOLDER COMMUNICATIONS. Key points: 1. The contract focuses on critical EHRM system development, including project management, training, and stakeholder communications. 2. Oracle Health Government Services, Inc. is the sole awardee, raising questions about competition. 3. The contract's duration of 5 years and significant value present potential long-term risks if not managed effectively. 4. Spending falls within the Computer Systems Design Services sector, a key area for government IT modernization.

Value Assessment

Rating: questionable

The contract value of $173.7 million over five years for IT system design and development is substantial. Benchmarking against similar large-scale IT development contracts is difficult without more specific service details, but the lack of competition suggests potential for overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning there was no open competition. This significantly limits price discovery and may lead to higher costs for taxpayers compared to a competitively bid contract.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price for these critical IT services.

Public Impact

Impacts thousands of Veterans and VA staff who rely on the Electronic Health Record Modernization (EHRM) system. Ensures continued development and maintenance of a critical healthcare IT infrastructure. Potential for delays or cost overruns due to lack of competitive pressure. Affects the broader landscape of federal IT procurement and the use of IDIQ contracts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Long contract duration (5 years) increases risk of cost escalation.
Lack of small business participation noted.

Positive Signals

Addresses a critical need for EHRM system development.
Awarded to a known entity with potential for continuity.
Utilizes an IDIQ contract vehicle, which can streamline future task orders.

Sector Analysis

This contract falls under Computer Systems Design Services, a broad category encompassing IT infrastructure development and support. Benchmarks for similar large-scale, sole-source IT development projects are scarce, but the value suggests a significant undertaking.

Small Business Impact

The data indicates that small business participation was not a factor in this award (ss: false, sb: false). This suggests that the prime contractor is not a small business, and there's no indication of subcontracting to small businesses.

Oversight & Accountability

As a task order under an IDIQ, oversight is expected from the Department of Veterans Affairs contracting officers. However, the sole-source nature warrants close scrutiny to ensure fair pricing and effective performance management.

Related Government Programs

Computer Systems Design Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Lack of competition may lead to inflated costs.
Potential for vendor lock-in due to sole-source award.
Risk of project delays or scope creep without competitive pressure.
No small business participation noted, missing opportunities for economic inclusion.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $173.7 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. IGF::OT::IGF TASK ORDER 36C10B18N0005 UNDER THE EHRM IDIQ CONTRACT 36C10B18D5000 TITLED FUNCTIONAL BASELINE DESIGN AND DEVELOPMENT,INCLUDES BUT IS NOT LIMITED TO: PROJECT MANAGEMENT; WORKFLOW, TRAINING AND CHANGE MANAGEMENT; VALUE MANAGEMENT; AND EHRM STAKEHOLDER COMMUNICATIONS.

Who is the contractor on this award?

The obligated recipient is ORACLE HEALTH GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $173.7 million.

What is the period of performance?

Start: 2018-09-18. End: 2023-09-17.

What specific factors justified the sole-source award, and were alternatives thoroughly explored?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of competition. For this EHRM contract, the VA would need to demonstrate why only Oracle Health Government Services could fulfill the requirement. Without this justification, the lack of competition raises concerns about potential overpayment and missed opportunities for innovation from other vendors.

How is the performance of Oracle Health Government Services being monitored to ensure value for money given the sole-source nature?

Effective oversight mechanisms are crucial for sole-source contracts. This includes rigorous performance metrics, regular progress reviews, and potentially independent cost analyses. The VA must actively manage the contract to ensure deliverables meet requirements and that costs remain reasonable, mitigating the risks associated with limited price competition.

What is the long-term strategy for EHRM development, and how does this contract fit into the broader modernization goals?

This contract addresses functional baseline design and development, suggesting it's a foundational piece of the larger EHRM strategy. Understanding the long-term roadmap is essential to assess if this investment aligns with future needs and technological advancements. Without this context, it's difficult to gauge the overall effectiveness and strategic value of this specific award.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cerner Corporation

Address: 10200 ABILITIES WAY, KANSAS CITY, KS, 66111

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $181,220,605

Exercised Options: $173,735,617

Current Obligation: $173,735,617

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $73,164,473

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10B18D5000

IDV Type: IDC

Timeline