VA Awards $223.8M for EHRM Functional Operations Support to Oracle Health

Contract Overview

Contract Amount: $223,855,730 ($223.9M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-09-18

End Date: 2025-01-21

Contract Duration: 1,586 days

Daily Burn Rate: $141.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FUNCTIONAL OPERATIONS SUPPORT TO INCLUDE PROJECT MANAGEMENT, WORKFLOW SUPPORT, ELECTRONIC HEALTH RECORD MODERNIZATION (EHRM) DESIGN AND BUILD, ORGANIZATIONAL CHANGE MANAGEMENT, TRAINING MATERIALS AND ACCESS AND ADDITIONAL FUNCTIONAL BASELINE SUPPORT.

Place of Performance

Location: KANSAS CITY, WYANDOTTE County, KANSAS, 66111

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $223.9 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: FUNCTIONAL OPERATIONS SUPPORT TO INCLUDE PROJECT MANAGEMENT, WORKFLOW SUPPORT, ELECTRONIC HEALTH RECORD MODERNIZATION (EHRM) DESIGN AND BUILD, ORGANIZATIONAL CHANGE MANAGEMENT, TRAINING MATERIALS AND ACCESS AND ADDITIONAL FUNCTIONAL BASELINE SUPPORT. Key points: 1. Significant contract value highlights the extensive support required for EHRM modernization. 2. Sole-source award raises questions about competition and potential cost efficiencies. 3. Focus on EHRM modernization indicates a critical but complex area of government IT spending. 4. Long-term contract duration suggests a sustained need for these specialized services.

Value Assessment

Rating: questionable

The contract value of $223.8 million over approximately five years for EHRM functional support appears high, especially given it was not competed. Benchmarking against similar EHR modernization projects or IT support contracts is difficult without competitive data, but the scale suggests a substantial investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, meaning there was no open competition. This limits price discovery and may result in higher costs for taxpayers compared to a fully competed contract. The justification for the sole-source award would be critical to understanding the rationale.

Taxpayer Impact: The lack of competition for a contract of this magnitude could lead to suboptimal pricing, potentially costing taxpayers more than necessary for these essential IT services.

Public Impact

Veterans will experience the direct impact of EHR modernization through improved healthcare delivery systems. The success of this contract is crucial for the VA's ability to provide efficient and effective healthcare. Taxpayers are funding a significant portion of the federal government's IT modernization efforts through this award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
High contract value requires close monitoring
Potential for cost overruns in complex IT projects

Positive Signals

Supports critical EHR modernization initiative
Long-term engagement provides stability
Focus on functional operations and training

Sector Analysis

This contract falls within the Computer Systems Design Services sector, specifically supporting the complex and critical area of Electronic Health Record Modernization (EHRM). Spending in this sector is substantial across government, driven by the need for digital transformation and improved data management.

Small Business Impact

The data provided does not indicate any specific allocation or consideration for small businesses in this sole-source award. Further analysis would be needed to determine if small business participation was sought or if subcontracting opportunities exist.

Oversight & Accountability

Given the sole-source nature and significant value, robust oversight from the Department of Veterans Affairs is essential. This includes monitoring performance, ensuring adherence to contract terms, and validating that the pricing remains fair and reasonable throughout the contract's life.

Related Government Programs

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

Risk Flags

Sole-source award
High contract value
Complexity of EHR modernization
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $223.9 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. FUNCTIONAL OPERATIONS SUPPORT TO INCLUDE PROJECT MANAGEMENT, WORKFLOW SUPPORT, ELECTRONIC HEALTH RECORD MODERNIZATION (EHRM) DESIGN AND BUILD, ORGANIZATIONAL CHANGE MANAGEMENT, TRAINING MATERIALS AND ACCESS AND ADDITIONAL FUNCTIONAL BASELINE 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 $223.9 million.

What is the period of performance?

Start: 2020-09-18. End: 2025-01-21.

What was the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price was fair and reasonable without competition?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. For this contract, the VA would need to demonstrate that Oracle Health was the only viable option, perhaps due to proprietary technology or unique expertise. Steps to ensure fair and reasonable pricing might include historical pricing data, independent cost estimates, or detailed negotiation with the vendor, though these are less effective without competitive pressure.

How will the VA measure the effectiveness of Oracle Health's functional operations support in achieving the goals of the EHRM modernization?

Effectiveness will likely be measured through a combination of performance metrics and key performance indicators (KPIs) defined in the contract. These could include system uptime, user satisfaction, successful training completion rates, reduction in workflow inefficiencies, and timely delivery of project milestones. Regular performance reviews and feedback mechanisms will be crucial for ongoing assessment and course correction.

What are the potential risks associated with a sole-source award of this magnitude for a critical IT modernization project like EHRM?

The primary risk is the lack of competitive pressure, which can lead to inflated costs and reduced incentive for the contractor to innovate or perform optimally. There's also a risk of vendor lock-in, making it difficult and costly to switch providers if performance issues arise. Furthermore, without competition, it's harder to benchmark performance and pricing against industry standards, potentially masking inefficiencies.

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: $230,614,908

Exercised Options: $223,855,730

Current Obligation: $223,855,730

Subaward Activity

Number of Subawards: 33

Total Subaward Amount: $16,280,000

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