VA Awards $161.4M Firm Fixed Price Task Order to Cerner for EHRM IOC Deployment in VISN 20

Contract Overview

Contract Amount: $161,398,991 ($161.4M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-09-27

End Date: 2026-01-31

Contract Duration: 2,683 days

Daily Burn Rate: $60.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF - THIS TASK ORDER, 36C10B18N0006, IS HEREBY ISSUED ON A FIRM FIXED PRICED BASIS TO CERNER GOVERNMENT SERVICES, INC. (CERNER), UNDER THE TERMS AND CONDITIONS OF THE DEPARTMENT OF VETERANS AFFAIRS (VA) INDEFINITE DELIVERY, INDEFINITE QUANTITY (ID/IQ) CONTRACT NUMBER 36C10B18D5000, TITLED ELECTRONIC HEALTH RECORD MODERNIZATION (EHRM). THIS TASK ORDER SHALL CONDUCT IOC DEPLOYMENT ACTIVITIES FOR THE FOLLOWING VISN 20 INITIAL OPERATING CAPABILITY (IOC) SITES AND ASSOCIATED FACILITIES: MANN-GRANDSTAFF VA MEDICAL CENTER (VAMC), SEATTLE VAMC, AND AMERICAN LAKE VAMC. IOC DEPLOYMENT TASKS INCLUDE PLANNING, TEST AND EVALUATION, TRAINING, PRODUCTION RELEASE, POST DEPLOYMENT SUPPORT AND SUCCESSFUL COMPLETION OF THE TASKS AND ACCOMPLISHMENT OF THE METRICS REQUIRED FOR THE DEPLOYMENT TO BE CONSIDERED COMPLETE. THE PERIOD OF PERFORMANCE OF THIS EFFORT SHALL BE A 21-MONTH BASE PERIOD

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98101

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $161.4 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: IGF::OT::IGF - THIS TASK ORDER, 36C10B18N0006, IS HEREBY ISSUED ON A FIRM FIXED PRICED BASIS TO CERNER GOVERNMENT SERVICES, INC. (CERNER), UNDER THE TERMS AND CONDITIONS OF THE DEPARTMENT OF VETERANS AFFAIRS (VA) INDEFINITE DELIVERY, INDEFINITE QUANTITY (ID/IQ) CONTRACT NUMBER 3… Key points: 1. This task order represents a significant investment in modernizing the VA's Electronic Health Record Modernization (EHRM) system. 2. The contract is awarded to Cerner Government Services, Inc. (now Oracle Health Government Services, Inc.), a key player in the health IT sector. 3. The firm fixed price structure aims to control costs for the IOC deployment activities across three major VAMC sites. 4. The scope includes comprehensive deployment phases from planning to post-deployment support, indicating a full lifecycle approach.

Value Assessment

Rating: good

The $161.4 million award for EHRM IOC deployment appears to be a substantial but necessary investment for modernizing critical healthcare infrastructure. Pricing is assessed against the overall scale and complexity of deploying an EHR system across multiple large facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This task order was issued under an existing ID/IQ contract and was not competed at the task order level. This limits price discovery and competition, potentially impacting the final cost to the government.

Taxpayer Impact: The significant expenditure of $161.4 million directly impacts taxpayer funds, with the expectation of improved healthcare delivery and efficiency for veterans as a return on investment.

Public Impact

Veterans at Mann-Grandstaff, Seattle, and American Lake VAMCs will experience the initial operational capability of the modernized EHR system. The deployment aims to improve the quality, accessibility, and efficiency of healthcare services provided by the VA. Successful implementation is crucial for the broader VA-wide EHRM initiative, impacting future healthcare IT strategies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of task-order level competition may lead to suboptimal pricing.
Potential for cost overruns if deployment complexities are underestimated.
Dependence on a single vendor for critical health IT infrastructure.

Positive Signals

Firm fixed price contract provides cost certainty.
Clear scope of work for IOC deployment activities.
Awarded under an existing ID/IQ, leveraging prior vetting.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, specifically related to large-scale health IT implementations. Benchmarks for similar EHR deployments vary widely based on system complexity and facility size, but this award is substantial.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this particular task order. The primary awardee is a large corporation.

Oversight & Accountability

The task order is managed by the Department of Veterans Affairs. Oversight will focus on ensuring the successful deployment of the EHRM system according to the defined scope, timeline, and performance metrics.

Related Government Programs

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

Risk Flags

Sole-source award limits competitive pricing.
Complexity of EHR deployment can lead to unforeseen challenges.
Potential for user resistance or adoption issues.
Long-term sustainment and maintenance costs beyond initial deployment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $161.4 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. IGF::OT::IGF - THIS TASK ORDER, 36C10B18N0006, IS HEREBY ISSUED ON A FIRM FIXED PRICED BASIS TO CERNER GOVERNMENT SERVICES, INC. (CERNER), UNDER THE TERMS AND CONDITIONS OF THE DEPARTMENT OF VETERANS AFFAIRS (VA) INDEFINITE DELIVERY, INDEFINITE QUANTITY (ID/IQ) CONTRACT NUMBER 36C10B18D5000, TITLED ELECTRONIC HEALTH RECORD MODERNIZATION (EHRM). THIS TASK ORDER SHALL CONDUCT IOC DEPLOYMENT ACTIVITIES FOR THE FOLLOWING VISN 20 INITIAL OPERATING CAPABILITY (IOC) SITES AND ASSOCIATED FACILITIES:

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 $161.4 million.

What is the period of performance?

Start: 2018-09-27. End: 2026-01-31.

What is the projected return on investment for the VA in terms of improved veteran healthcare outcomes and operational efficiencies resulting from this EHRM deployment?

The projected ROI is multifaceted, encompassing improved patient safety through better data access, reduced administrative burden on healthcare staff, and enhanced care coordination across facilities. Quantifying this ROI involves tracking metrics like reduced medical errors, decreased wait times, and improved patient satisfaction scores post-deployment. The $161.4M investment is expected to yield long-term benefits in healthcare quality and system efficiency.

What are the key performance indicators (KPIs) for the IOC deployment, and what are the consequences if these metrics are not met?

Key performance indicators likely include successful data migration, system uptime, user adoption rates among clinicians, completion of training modules, and successful integration with existing VA systems. Failure to meet these metrics could result in contract penalties, delays in full system rollout, and potential renegotiation of terms. The firm fixed price nature may also expose the contractor to financial risks if performance targets are missed.

How does this specific IOC deployment contribute to the overall success and interoperability goals of the VA's broader EHR Modernization program?

This IOC deployment is a critical foundational step for the entire EHRM program. Its success validates the chosen system and deployment strategy for subsequent phases. Effective implementation here ensures that data from these initial sites can be leveraged and integrated into the larger, enterprise-wide system, paving the way for improved data sharing and interoperability across the VA healthcare network.

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: Oracle Health Government Services Inc.

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: $177,332,836

Exercised Options: $161,398,991

Current Obligation: $161,398,991

Subaward Activity

Number of Subawards: 56

Total Subaward Amount: $16,780,541

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10B18D5000

IDV Type: IDC

Timeline