VA awards $115M for EHRM deployment, raising questions about competition and value

Contract Overview

Contract Amount: $115,162,192 ($115.2M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-09-18

End Date: 2024-06-30

Contract Duration: 1,747 days

Daily Burn Rate: $65.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EHRM TASK ORDER 0016 - WAVE 1 DEPLOYMENT. VISN 20 SITES AND ASSOCIATED FACILITIES: JONATHAN M. WAINWRIGHT MEMORIAL VA MEDICAL CENTER (VAMC), WHITE CITY VAMC.

Place of Performance

Location: WALLA WALLA, WALLA WALLA County, WASHINGTON, 99362

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $115.2 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: EHRM TASK ORDER 0016 - WAVE 1 DEPLOYMENT. VISN 20 SITES AND ASSOCIATED FACILITIES: JONATHAN M. WAINWRIGHT MEMORIAL VA MEDICAL CENTER (VAMC), WHITE CITY VAMC. Key points: 1. Contract awarded on a 'not competed' basis, limiting price discovery. 2. Significant investment in a critical healthcare system upgrade. 3. Duration of nearly five years suggests a complex, long-term deployment. 4. Focus on specific VISN 20 sites indicates targeted implementation. 5. Firm Fixed Price contract type aims to control costs but may limit flexibility. 6. Potential for cost overruns given the complexity of EHRM systems.

Value Assessment

Rating: questionable

The contract value of $115.16 million for EHRM Task Order 0016 is substantial. Without a competitive bidding process, it is difficult to benchmark the value for money. The firm fixed-price structure is a positive indicator for cost control, but the lack of competition raises concerns about whether the VA secured the most advantageous pricing. Comparing this to similar large-scale EHRM deployments across government agencies would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'not competed' basis, meaning a sole-source procurement. This approach bypasses the standard competitive process, which typically involves multiple bidders vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities or urgent needs), they generally lead to less price competition and potentially higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the cost savings that a robust bidding process could have generated. This could translate to a higher overall expenditure for the EHRM system.

Public Impact

Veterans receiving care at VISN 20 sites, including Jonathan M. Wainwright Memorial VAMC and White City VAMC, will benefit from the upgraded Electronic Health Record Management system. The deployment aims to improve healthcare delivery, patient safety, and administrative efficiency within these specific VA facilities. The project has implications for the IT workforce involved in the implementation and ongoing support of the new EHRM system. Improved data management and interoperability are expected outcomes, potentially leading to better coordinated care for veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment.
Complexity of EHRM implementations can lead to schedule delays and cost overruns.
Dependence on a single vendor for a critical system poses integration and long-term support risks.

Positive Signals

Firm Fixed Price contract aims to provide cost certainty.
Deployment targets specific facilities, suggesting a phased and manageable rollout.
EHRM systems are crucial for modernizing healthcare delivery and improving patient outcomes.

Sector Analysis

The healthcare IT sector is characterized by large, complex system implementations, particularly for Electronic Health Record Management (EHRM). These systems are critical for modernizing healthcare delivery, improving patient care, and ensuring regulatory compliance. Spending in this area is substantial across both government and private healthcare providers. This contract fits within the broader trend of digital transformation in healthcare, aiming to enhance data interoperability and clinical decision-making.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. Therefore, the direct impact on the small business ecosystem appears minimal for this specific task order. However, the prime contractor, Oracle Health Government Services, Inc., may engage small businesses for subcontracting opportunities as part of their overall project execution, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) program management and contracting offices. The VA has an Office of Inspector General (OIG) that conducts audits and investigations into VA programs and contracts to ensure accountability and identify potential fraud, waste, or abuse. Transparency regarding the sole-source award and performance metrics would be key to assessing oversight effectiveness.

Related Government Programs

Veterans Health Administration EHR Modernization Program
Department of Defense EHR Program (MHS Genesis)
Federal Health IT Spending
Large-Scale IT System Deployments

Risk Flags

Sole-source procurement
High contract value
Long contract duration
Complex system implementation (EHRM)

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $115.2 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. EHRM TASK ORDER 0016 - WAVE 1 DEPLOYMENT. VISN 20 SITES AND ASSOCIATED FACILITIES: JONATHAN M. WAINWRIGHT MEMORIAL VA MEDICAL CENTER (VAMC), WHITE CITY VAMC.

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 $115.2 million.

What is the period of performance?

Start: 2019-09-18. End: 2024-06-30.

What is the track record of Oracle Health Government Services, Inc. in delivering large-scale EHRM systems for federal agencies?

Oracle Health Government Services, Inc. (formerly Cerner Government Services) has a significant track record in delivering EHRM systems, most notably for the Department of Defense's MHS GENESIS program, which is a large-scale, complex, and challenging implementation. They have also been involved in various other health IT projects for federal and state governments. While their experience is extensive, the MHS GENESIS program has faced notable challenges related to user adoption, system performance, and cost overruns, which are often inherent in such massive undertakings. Evaluating their performance on this VA task order would require examining specific project milestones, user satisfaction, and adherence to budget and schedule, which are not detailed in the provided data.

How does the per-unit cost of this EHRM deployment compare to similar VA or DoD EHRM initiatives?

Determining a precise per-unit cost for comparison is challenging without more granular data on the number of users, modules deployed, or specific services rendered per dollar. The total award is $115.16 million over approximately 1747 days (nearly 5 years). If we consider a rough per-day cost, it's approximately $66,000 per day. However, this is a very high-level metric. The VA's broader EHRM program, which this task order is part of, has faced significant scrutiny regarding its overall cost and value. Comparisons to the DoD's MHS GENESIS program, which has seen costs escalate well beyond initial projections, are relevant. Without specific benchmarks for comparable VA VISN-level deployments or specific modules, a definitive per-unit cost comparison is not feasible from the provided data.

What are the primary risks associated with this specific EHRM task order, beyond general EHRM implementation challenges?

Beyond the inherent risks of any large-scale EHRM deployment (e.g., user adoption, data migration, system integration), this specific task order carries risks related to its sole-source nature. The lack of competition increases the risk of the VA not achieving the best possible price or terms, potentially leading to higher overall costs. Furthermore, the focus on specific VISN 20 sites means that successful integration with other VA facilities not included in this phase could become a future challenge. The long duration (nearly five years) also presents risks related to technological obsolescence, changing healthcare regulations, and the need for sustained vendor support and commitment over an extended period.

What is the expected impact of this EHRM deployment on the efficiency and quality of care for veterans in VISN 20?

The expected impact of this EHRM deployment on the efficiency and quality of care for veterans in VISN 20 is significant, assuming successful implementation. Modern EHRM systems are designed to provide a unified patient record, improve clinical decision support, streamline workflows, and enhance communication among healthcare providers. This can lead to reduced medical errors, better care coordination, faster access to patient information, and improved patient safety. For veterans, this could mean more seamless care experiences, reduced wait times for certain services, and more personalized treatment plans based on comprehensive health data. The success hinges on effective training, user buy-in, and robust system performance.

How has VA spending on EHRM systems evolved over the past five years, and where does this task order fit in?

VA spending on EHRM systems has been substantial and a major focus area over the past five years, largely driven by the broader EHR Modernization program aimed at replacing the legacy VistA system. This task order, valued at $115.16 million, represents a significant but specific investment within that larger modernization effort. The VA has allocated billions of dollars towards its EHRM initiatives, including contracts with Oracle Health (formerly Cerner) and other vendors for various components and deployments. This particular task order focuses on the deployment to specific VISN 20 sites, indicating a phased approach to the overall modernization. Understanding its place requires viewing it as one piece of a much larger, multi-year, and multi-billion dollar strategic undertaking by the VA.

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: $115,162,192

Exercised Options: $115,162,192

Current Obligation: $115,162,192

Subaward Activity

Number of Subawards: 60

Total Subaward Amount: $51,647,363

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