VA awards $115.5M Oracle Health EHRM contract, a sole-source delivery order

Contract Overview

Contract Amount: $115,521,340 ($115.5M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-09-07

End Date: 2026-04-13

Contract Duration: 1,679 days

Daily Burn Rate: $68.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EHRM WAVE G DEPLOYMENT.

Place of Performance

Location: KANSAS CITY, WYANDOTTE County, KANSAS, 66111

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $115.5 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: EHRM WAVE G DEPLOYMENT. Key points: 1. Contract awarded as a sole-source delivery order, raising questions about competition and potential value. 2. The contract's duration of nearly 5 years suggests a significant, long-term investment in EHRM. 3. Fixed-price contract type may offer cost certainty but could limit flexibility for evolving needs. 4. The absence of a small business set-aside indicates a focus on large prime contractors. 5. The significant dollar value warrants close scrutiny of performance and cost-effectiveness over its life. 6. The contract is for Computer Systems Design Services, a broad category requiring specific performance metrics.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without comparable bids. The $115.5 million award over approximately 5.5 years suggests a substantial investment. Without competitive pricing, it's difficult to definitively assess if the government is receiving optimal value for money. Further analysis would require understanding the specific services rendered and comparing them to industry standards for similar large-scale IT deployments.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific emergency situations. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to lower prices. The government did not benefit from the cost-saving mechanisms inherent in a competitive bidding process.

Public Impact

The Department of Veterans Affairs is the primary beneficiary, aiming to improve its Electronic Health Record Management system. The contract supports the deployment and maintenance of critical healthcare IT infrastructure for veterans. The geographic impact is likely nationwide, affecting VA facilities and personnel across the country. Workforce implications may include IT specialists, project managers, and support staff involved in EHRM deployment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs.
Long contract duration could lead to vendor lock-in and reduced flexibility.
Lack of transparency in the sole-source justification requires further review.
Performance metrics and oversight are crucial to ensure value delivery.
Potential for scope creep in large IT system deployments.

Positive Signals

Fixed-price contract offers cost predictability for the government.
Award to a known entity like Oracle Health may leverage existing expertise.
Focus on EHRM deployment addresses a critical need for veteran healthcare.
Delivery order structure allows for phased implementation and management.

Sector Analysis

The healthcare IT sector is characterized by significant investments in digital transformation, including the implementation of Electronic Health Records (EHRs). Large federal contracts for EHR systems are common, driven by the need for interoperability, data security, and improved patient care. The market includes major players like Oracle Health, Cerner (now Oracle), and others. This contract fits within the broader trend of modernizing government healthcare systems, with spending benchmarks varying widely based on system complexity and scope.

Small Business Impact

This contract does not appear to have a small business set-aside. The award to Oracle Health Government Services, Inc., a large corporation, suggests that the primary focus was on the prime contractor's capabilities rather than subcontracting opportunities for small businesses. There is no explicit indication of subcontracting plans for small businesses within the provided data.

Oversight & Accountability

Oversight for this contract will likely fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures will be tied to the performance metrics outlined in the contract's statement of work. Transparency may be limited due to the sole-source nature of the award, but contract modifications and performance reports should be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

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

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns in large IT deployments.
Past EHRM implementation challenges in federal agencies.
Contract duration may limit future flexibility.
Performance monitoring is critical for value realization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $115.5 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. EHRM WAVE G 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 $115.5 million.

What is the period of performance?

Start: 2021-09-07. End: 2026-04-13.

What is the specific justification for awarding this EHRM contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For a contract of this magnitude and duration, a detailed justification document would normally be required, outlining why full and open competition was not feasible or advantageous. Without this justification, it is difficult to assess the necessity of the sole-source approach and its potential impact on cost and value.

How does the pricing of this contract compare to similar EHRM deployments in the federal government or private sector?

Direct price comparison is difficult due to the sole-source nature of this award and the lack of specific service details. However, the total contract value of $115.5 million over approximately 5.5 years averages to roughly $21 million per year. This figure needs to be contextualized by the scope of services, number of users, and specific functionalities being deployed. Large-scale EHR implementations are inherently expensive. To assess value, one would need to compare the cost per user, cost per facility, or cost per module against benchmarks from other federal agencies (like the DoD's EHR program) or large private healthcare systems that have undergone similar transformations. The absence of competitive bids makes a definitive value assessment challenging.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this EHRM WAVE G DEPLOYMENT contract. However, for a contract of this nature and value, robust KPIs and SLAs are essential to ensure successful deployment and ongoing performance. These would typically include metrics related to system uptime, data accuracy, response times, user satisfaction, security compliance, and timely completion of deployment phases. The effectiveness of the contract's value realization hinges on the rigor of these performance measures and the VA's ability to monitor and enforce them throughout the contract's lifecycle.

What is Oracle Health Government Services, Inc.'s track record with large-scale federal IT deployments, particularly EHR systems?

Oracle Health Government Services, Inc. (formerly Cerner Government Services) has a significant track record with large-scale federal IT deployments, most notably its role in the Department of Defense's (DoD) Millennium Electronic Health Record (MHS GENESIS) program. This experience provides them with substantial expertise in managing complex, high-stakes healthcare IT projects within a federal context. Their involvement in the DoD program, while facing its own challenges and scrutiny, demonstrates their capacity to handle the scale and intricacies of national-level EHR implementations. This prior experience likely informed the VA's decision to award the contract, though the specific performance outcomes of past projects are subject to ongoing review and analysis.

What is the historical spending pattern for EHRM systems at the Department of Veterans Affairs?

The Department of Veterans Affairs has a complex and often scrutinized history with EHR modernization efforts. Prior to this contract, the VA has invested billions of dollars in various attempts to implement a unified EHR system. The most prominent recent effort involved the Oracle Cerner system, which has faced significant delays, cost overruns, and performance issues, leading to extensive reviews and congressional oversight. Historical spending patterns reveal a consistent, substantial financial commitment to improving its health IT infrastructure, but also highlight the immense challenges in successfully deploying and integrating such systems across a vast network of facilities. This contract represents a continuation of that significant investment, albeit under a specific delivery order structure.

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: $115,521,340

Exercised Options: $115,521,340

Current Obligation: $115,521,340

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $5,954,320

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