VA EHRM Solution receives $37.7M for technical baseline analysis and development services

Contract Overview

Contract Amount: $37,672,578 ($37.7M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-02-04

End Date: 2021-05-31

Contract Duration: 847 days

Daily Burn Rate: $44.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF - TASK ORDER FOR TECHNICAL BASELINE ANALYSIS, DESIGN AND DEVELOPMENT SERVICES FOR THE VA EHRM SOLUTION. THIS TASK ORDER INCLUDES BUT IS NOT LIMITED TO: PROJECT MANAGEMENT, ADHERENCE TO ENTERPRISE TECHNICAL PLANS AND STRATEGIES, TECHNICAL TRAINING PLANS AND MATERIALS, REQUIREMENTS ANALYSIS, HEALTH INFORMATION EXCHANGE / VETERAN HEALTH INFORMATION EXCHANGE MODIFICATION, FORWARD-DEPLOYED HARDWARE, VA-SPECIFIC FUNCTIONALITY INTEGRATION, ADDITIONAL TECHNICAL SUPPORT.

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98108

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $37.7 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: IGF::OT::IGF - TASK ORDER FOR TECHNICAL BASELINE ANALYSIS, DESIGN AND DEVELOPMENT SERVICES FOR THE VA EHRM SOLUTION. THIS TASK ORDER INCLUDES BUT IS NOT LIMITED TO: PROJECT MANAGEMENT, ADHERENCE TO ENTERPRISE TECHNICAL PLANS AND STRATEGIES, TECHNICAL TRAINING PLANS AND MATERIALS,… Key points: 1. Contract awarded for critical IT infrastructure supporting the VA's Electronic Health Record Modernization (EHRM) solution. 2. Services encompass project management, technical planning, requirements analysis, and system integration. 3. The contract duration spans over two years, indicating a significant commitment to the EHRM project. 4. Focus on VA-specific functionality integration highlights the tailored nature of the IT services required. 5. The award was not competed, raising questions about potential cost efficiencies and market-driven pricing. 6. Oracle Health Government Services, Inc. is the sole awardee, suggesting a specialized or pre-existing relationship.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its 'not competed' status. Without competitive bids, it's difficult to ascertain if the $37.7 million represents a fair market price for the extensive technical services provided. The scope includes a wide range of IT development and support, from project management to specific VA functionality integration. A comparison to similar large-scale EHR system development contracts, especially those that underwent full and open competition, would be necessary to assess value for money. The fixed-price nature of the contract shifts some risk to the contractor, but the lack of competition limits transparency on pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgent circumstances necessitate a rapid award without a lengthy solicitation process. The absence of multiple bidders means that the government did not benefit from the price discovery and innovation that typically arises from a competitive bidding environment. This raises concerns about whether the most cost-effective solution was secured.

Taxpayer Impact: Taxpayers may not have received the best possible price for these critical IT services due to the lack of competitive pressure. The government's ability to negotiate favorable terms is diminished in a sole-source scenario.

Public Impact

Veterans will benefit from improved electronic health records through the modernization of the EHRM solution. The contract supports the delivery of essential IT services for a large-scale federal healthcare system. The geographic impact is nationwide, affecting all VA facilities and the electronic health records of millions of veterans. This contract supports a workforce of IT professionals involved in system analysis, design, and development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially increases costs for taxpayers.
Sole-source award raises questions about the justification for not seeking multiple bids.
The complexity of EHR modernization can introduce risks of cost overruns and schedule delays.

Positive Signals

Contract addresses a critical need for the VA's EHR modernization, aiming to improve veteran healthcare.
Firm fixed-price contract structure can provide cost certainty if scope is well-defined.
Oracle Health Government Services, Inc. is a known entity in the health IT space, potentially bringing relevant expertise.

Sector Analysis

The federal IT services sector is vast, with significant spending allocated to system design, development, and modernization. Contracts like this, focused on large-scale enterprise solutions such as Electronic Health Records (EHR), represent a substantial portion of this spending. The market for EHR solutions is competitive, with several major players vying for government contracts. However, specific task orders or specialized development services can sometimes lead to sole-source awards if unique expertise is required. The VA's EHRM initiative is a high-profile, multi-billion dollar program, and this contract is a component of that larger effort.

Small Business Impact

This contract was not awarded to small businesses, nor does it appear to have specific small business set-aside provisions. The prime contractor, Oracle Health Government Services, Inc., is a large entity. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the overall EHRM program may have broader subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Given the nature of IT development, regular progress reviews, performance metrics tracking, and adherence to technical milestones would be expected. The contract's fixed-price nature implies that the contractor is responsible for managing costs within the agreed-upon ceiling. Transparency would be enhanced through regular reporting requirements and potential audits by the VA's Inspector General, particularly concerning the expenditure of federal funds and the progress of the EHRM solution.

Related Government Programs

VA Electronic Health Record Modernization (EHRM)
Health Information Technology Services
Federal IT System Development
Enterprise Resource Planning (ERP) Systems

Risk Flags

Sole-source award
Lack of competitive bidding
High-value IT development contract
Part of a complex, large-scale federal program (EHRM)

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $37.7 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. IGF::OT::IGF - TASK ORDER FOR TECHNICAL BASELINE ANALYSIS, DESIGN AND DEVELOPMENT SERVICES FOR THE VA EHRM SOLUTION. THIS TASK ORDER INCLUDES BUT IS NOT LIMITED TO: PROJECT MANAGEMENT, ADHERENCE TO ENTERPRISE TECHNICAL PLANS AND STRATEGIES, TECHNICAL TRAINING PLANS AND MATERIALS, REQUIREMENTS ANALYSIS, HEALTH INFORMATION EXCHANGE / VETERAN HEALTH INFORMATION EXCHANGE MODIFICATION, FORWARD-DEPLOYED HARDWARE, VA-SPECIFIC FUNCTIONALITY INTEGRATION, ADDITIONAL TECHNICAL SUPPORT.

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 $37.7 million.

What is the period of performance?

Start: 2019-02-04. End: 2021-05-31.

What is the track record of Oracle Health Government Services, Inc. with VA IT contracts, particularly EHRM?

Oracle Health Government Services, Inc. (formerly Cerner Government Services) has a significant history with the Department of Veterans Affairs, particularly as the prime contractor for the VA's Electronic Health Record Modernization (EHRM) program. This specific task order is part of that larger initiative. Their involvement predates the formal EHRM program, with Cerner having been selected in 2018 to modernize the EHR system. The company has faced scrutiny and challenges related to the EHRM rollout, including issues with system performance, user adoption, and cost. Understanding their performance on previous, similar task orders within the EHRM program is crucial for assessing the risk and potential success of this particular contract. Data on past performance, including adherence to schedule, budget, and quality standards on prior VA contracts, would provide valuable context.

How does the $37.7 million cost compare to similar IT development contracts for large-scale federal systems?

Directly comparing the $37.7 million cost is challenging without knowing the precise deliverables and duration of comparable contracts. However, for large-scale federal IT system development and modernization projects, this figure represents a significant investment, but not an outlier. For instance, other federal agencies undertaking major system overhauls (e.g., defense, treasury, justice) often award contracts in the tens to hundreds of millions of dollars for similar phases of work, including analysis, design, and development. The key differentiator here is the 'not competed' status. If this contract had been competed, a benchmark against multiple bids would offer a clearer picture of value. Without that, comparisons are limited to the general scale of federal IT spending for complex systems.

What are the primary risks associated with this specific task order, given its scope and sole-source nature?

The primary risks associated with this task order stem from its sole-source award and the inherent complexity of EHR modernization. The lack of competition means there's a reduced incentive for the contractor to optimize costs and potentially less pressure to innovate rapidly, increasing the risk of paying a premium. Furthermore, the scope includes critical elements like 'technical baseline analysis, design and development services,' which are foundational and prone to scope creep and unforeseen technical challenges. If the initial analysis or design is flawed, it can lead to significant cost overruns and delays in subsequent phases of the EHRM program. The reliance on a single vendor also introduces vendor lock-in risk and potential dependency issues.

How effective is the VA's EHRM program expected to be, and how does this contract contribute to that effectiveness?

The VA's EHRM program aims to provide a unified, modern electronic health record system across all VA facilities, intended to improve patient care coordination, reduce medical errors, and enhance clinician efficiency. Its effectiveness is a subject of ongoing debate and scrutiny, with significant challenges encountered since its inception. This specific task order is critical because it focuses on the foundational technical aspects – baseline analysis, design, and development. Its effectiveness directly impacts the stability, functionality, and scalability of the entire EHRM solution. If these foundational services are performed exceptionally well, it increases the likelihood of the broader EHRM program achieving its goals. Conversely, deficiencies here would undermine the entire initiative.

What are the historical spending patterns for IT services related to the VA's EHR modernization efforts?

Historical spending on the VA's EHR modernization efforts has been substantial, running into billions of dollars. This specific $37.7 million task order is a component of that larger, ongoing investment. Prior to the formal EHRM program, the VA also invested heavily in its legacy VistA system and various upgrades. The EHRM program, in particular, has seen significant funding allocated annually for software development, hardware infrastructure, implementation, training, and ongoing support. Spending patterns have been characterized by large, multi-year contracts awarded to major IT vendors. The trend has been towards consolidating systems and modernizing infrastructure to improve interoperability and patient care, but also marked by challenges in cost control and timely delivery.

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: $41,096,001

Exercised Options: $37,672,578

Current Obligation: $37,672,578

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $12,470,988

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