VA Spends $369M on Oracle EHRM Licenses and Fees, Awarded Sole-Source

Contract Overview

Contract Amount: $368,958,730 ($369.0M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-09-28

End Date: 2025-10-29

Contract Duration: 1,492 days

Daily Burn Rate: $247.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EHRM LICENSES AND FEES

Place of Performance

Location: KANSAS CITY, WYANDOTTE County, KANSAS, 66111

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $369.0 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: EHRM LICENSES AND FEES Key points: 1. Significant investment in Electronic Health Record Management (EHRM) licenses and fees. 2. Sole-source award to Oracle Health Government Services, Inc. raises competition concerns. 3. Long-term contract duration (over 4 years) suggests potential for sustained spending. 4. The $369M contract represents a substantial portion of IT spending within the VA. 5. Focus on computer systems design services highlights the critical role of IT infrastructure in healthcare.

Value Assessment

Rating: questionable

The $369M contract for EHRM licenses and fees is a large expenditure. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar enterprise software licenses and support services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning it was not competed. This limits price discovery and potentially leads to higher costs for taxpayers as there was no opportunity for other vendors to offer competitive pricing.

Taxpayer Impact: The lack of competition on this large contract may result in taxpayers paying a premium for EHRM software and services.

Public Impact

Veterans' healthcare access and quality may be impacted by the EHRM system's performance and cost. The significant investment in a single vendor could limit future flexibility and innovation in healthcare IT. Taxpayer funds are being allocated to a sole-source contract, raising questions about fiscal responsibility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
High contract value
Long contract duration
Lack of competition

Positive Signals

Essential service for healthcare delivery
Potential for system stability with a single vendor

Sector Analysis

This contract falls under Computer Systems Design Services, a critical sector for modern healthcare. The $369M expenditure on EHRM licenses and fees is substantial and likely represents a significant portion of the VA's IT budget for this category.

Small Business Impact

The contract was awarded to Oracle Health Government Services, Inc., a large corporation. There is no indication of small business participation in this sole-source award, which could be an area for improvement in future contracting strategies.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the VA is receiving fair value and that the EHRM system is meeting its intended objectives. Regular performance reviews and cost audits are crucial.

Related Government Programs

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

Risk Flags

Lack of competition
Potential for overpayment
Vendor lock-in
Long-term financial commitment
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $369.0 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. EHRM LICENSES AND FEES

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 $369.0 million.

What is the period of performance?

Start: 2021-09-28. End: 2025-10-29.

What is the justification for the sole-source award, and has the VA explored all avenues for competitive procurement in the past or future?

The justification for a sole-source award typically involves unique capabilities or lack of alternatives. For this EHRM contract, the VA would need to demonstrate why only Oracle Health Government Services, Inc. could meet the requirements. It's crucial to understand if this was a one-time necessity or if future procurements will allow for competition to ensure better pricing and innovation.

How does the per-unit cost of these EHRM licenses and fees compare to industry benchmarks for similar government or private sector contracts?

Without specific per-unit cost data and access to industry benchmarks, a direct comparison is difficult. However, given the sole-source nature and the substantial total value, there's a risk that the per-unit cost is higher than it would be in a competitive environment. Further analysis would require detailed cost breakdowns and market research.

What are the key performance indicators (KPIs) for this EHRM system, and how is the VA measuring the effectiveness and value derived from this $369M investment?

Measuring the effectiveness of an EHRM system involves tracking KPIs related to patient care, data security, system uptime, user satisfaction, and administrative efficiency. The VA should have robust mechanisms in place to monitor these metrics and ensure the significant investment is translating into tangible improvements in healthcare delivery and operational effectiveness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: 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: $368,958,730

Exercised Options: $368,958,730

Current Obligation: $368,958,730

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