VA's $130M EHRM TO 39 WAVE F DEPLOYMENT contract awarded to Oracle Health Government Services, Inc

Contract Overview

Contract Amount: $129,663,790 ($129.7M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-12-16

End Date: 2026-04-13

Contract Duration: 1,944 days

Daily Burn Rate: $66.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EHRM TO 39 WAVE F DEPLOYMENT

Place of Performance

Location: SAGINAW, SAGINAW County, MICHIGAN, 48602

State: Michigan Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $129.7 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: EHRM TO 39 WAVE F DEPLOYMENT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant investment in electronic health record modernization. 3. Long contract duration of nearly 4 years suggests a complex, multi-phase deployment. 4. Focus on Wave F deployment indicates a phased rollout strategy for the EHRM system. 5. The contract's value places it among substantial IT modernization efforts within the federal government. 6. Potential for cost overruns given the complexity and sole-source nature of the award.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific deployment phase. However, the total contract value of approximately $130 million for a specific wave of EHRM deployment suggests a significant investment. Without competitive bids, it's difficult to definitively assess if this represents optimal value for money. Comparisons to similar large-scale federal IT modernization projects indicate that costs can vary widely based on scope and vendor. The fixed-price nature provides some cost certainty, but the overall value proposition hinges on successful implementation and adoption.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition among multiple vendors. This approach is typically used when a specific vendor possesses unique capabilities or when the requirement is a continuation of existing work. The lack of competition means that price discovery through market forces was not leveraged, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The absence of multiple bids limits the government's ability to negotiate the best possible price.

Public Impact

Veterans will benefit from modernized electronic health records, potentially leading to improved care coordination and access. The Department of Veterans Affairs (VA) will receive enhanced IT infrastructure for managing patient data. The deployment impacts healthcare providers within the VA system, requiring adaptation to new software. Workforce implications include training for medical staff and IT personnel on the new EHRM system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Large contract value increases financial risk if project encounters significant delays or cost overruns.
Complexity of EHRM system deployment carries inherent risks of technical challenges and user adoption issues.
Long contract duration may lead to scope creep or evolving requirements that are not fully accounted for in the initial pricing.

Positive Signals

Award to Oracle Health Government Services, Inc., a known entity in the health IT space.
Fixed-price contract structure provides some level of cost predictability.
Focus on a specific deployment wave (Wave F) suggests a structured, phased approach to modernization.
The contract aims to improve critical healthcare infrastructure for veterans.

Sector Analysis

The Electronic Health Record Modernization (EHRM) program is a significant undertaking within the federal healthcare sector, particularly for the Department of Veterans Affairs. This contract represents a substantial investment in upgrading the VA's IT infrastructure to a unified system. The market for healthcare IT solutions is large and competitive, but large-scale government EHR implementations are often complex and involve specialized vendors. Comparable federal spending on IT modernization projects can range from tens of millions to billions of dollars, depending on the scope and agency.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor is Oracle Health Government Services, Inc., a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contracts often involve some level of subcontracting to smaller firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. The fixed-price nature of the contract provides a degree of accountability for the contractor to deliver within the agreed-upon budget. Transparency regarding project progress and spending may be available through VA reporting mechanisms and potentially through Inspector General reviews if issues arise. The contract's duration and value warrant diligent oversight to ensure successful implementation and taxpayer value.

Related Government Programs

Department of Veterans Affairs Electronic Health Record Modernization Program
Federal Health IT Modernization Initiatives
Large-Scale IT System Deployments
Oracle Health Solutions

Risk Flags

Sole-source award
Large contract value
Complex IT system deployment
Potential for cost overruns
User adoption challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $129.7 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. EHRM TO 39 WAVE F DEPLOYMENT

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 $129.7 million.

What is the period of performance?

Start: 2020-12-16. End: 2026-04-13.

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

Oracle Health Government Services, Inc. (formerly Cerner Government Services) has a significant track record in the federal health IT space, including its involvement in the broader Department of Defense (DoD) and Department of Veterans Affairs (VA) EHRM initiatives. The company has been a key player in the development and deployment of complex electronic health record systems. However, the federal EHRM programs, both for the DoD and VA, have faced considerable scrutiny regarding cost, schedule, and performance. While Oracle/Cerner has the technical capability, the history of these large-scale federal deployments suggests that challenges are common, including issues with user adoption, data migration, system integration, and achieving the intended benefits on time and within budget. The specific performance on this 'Wave F' deployment will be a critical indicator of their success in this particular phase.

How does the cost of this EHRM deployment wave compare to similar federal IT modernization efforts?

Comparing the cost of this specific $130 million EHRM Wave F deployment to similar federal IT modernization efforts is complex due to the unique nature of EHR systems and the phased approach. Large-scale IT modernization projects within the federal government, especially those involving core system replacements like EHRs, can range significantly in cost. For instance, the broader DoD and VA EHRM programs have been multi-billion dollar initiatives. A single wave deployment of this magnitude, however, suggests a substantial component of a larger program. Benchmarking against other federal IT projects requires careful consideration of scope, complexity, duration, and the specific services provided. Given the sole-source nature, a direct cost-per-user or cost-per-feature comparison with competed projects is not feasible, making it difficult to definitively state if it represents optimal value without further competitive data.

What are the primary risks associated with this sole-source contract for EHRM deployment?

The primary risks associated with this sole-source contract for EHRM deployment are centered around the lack of competitive pressure on pricing and performance. Without multiple bidders, there is a reduced incentive for the contractor to offer the most competitive price, potentially leading to higher costs for the government. Furthermore, the absence of competition can limit the government's leverage in negotiating terms and ensuring optimal performance. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future. The complexity of EHR systems themselves introduces inherent risks related to implementation, integration, data migration, and user adoption, which are amplified when there isn't a competitive market to drive innovation and efficiency.

What is the expected program effectiveness and impact on veteran care from this EHRM deployment?

The expected program effectiveness of this EHRM deployment is to modernize and unify the Department of Veterans Affairs' electronic health record system, aiming to improve the quality, efficiency, and coordination of care for veterans. A successful implementation should lead to better access to patient information for healthcare providers, reduced medical errors, enhanced patient safety, and improved communication across different VA facilities. Ultimately, the impact on veteran care is anticipated to be positive, with veterans potentially experiencing more seamless healthcare experiences and receiving more personalized and effective treatment due to a comprehensive and accessible health record. However, the realization of these benefits is contingent upon successful deployment, robust user training, and effective system integration.

How has historical spending on EHRM by the VA influenced this contract's structure and value?

Historical spending on EHRM by the VA, particularly the challenges and costs associated with previous attempts at modernization and the ongoing large-scale EHRM program, likely heavily influences the structure and value of this contract. The VA's experience with complex IT procurements and system implementations, including the significant investments and scrutiny surrounding the current EHRM program, informs the contracting strategies employed. The decision to award this specific deployment phase (Wave F) to Oracle Health Government Services, Inc. on a sole-source basis might stem from a desire for continuity or to leverage existing investments and expertise within the broader EHRM initiative. The substantial value of this contract reflects the recognized complexity and critical importance of upgrading the EHR system, informed by past spending and the ongoing commitment to a unified health record for veterans.

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 › IT AND TELECOM - APLLICATIONS

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: $130,674,257

Exercised Options: $129,663,790

Current Obligation: $129,663,790

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $4,510,892

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