VA awards $860M EHRM PMO support contract to Booz Allen Hamilton, extending through 2027

Contract Overview

Contract Amount: $859,686,306 ($859.7M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-09-28

End Date: 2027-01-15

Contract Duration: 1,570 days

Daily Burn Rate: $547.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: NEW TO - EHRM PMO IO SUPPORT

Place of Performance

Location: RED BANK, MONMOUTH County, NEW JERSEY, 07701

State: New Jersey Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $859.7 million to BOOZ ALLEN HAMILTON INC for work described as: NEW TO - EHRM PMO IO SUPPORT Key points: 1. Contract value represents significant investment in electronic health record modernization. 2. Sole awardee suggests potential for concentrated expertise or limited market availability. 3. Long duration indicates a strategic, long-term partnership for critical IT services. 4. Focus on computer systems design highlights the technical complexity of EHRM. 5. Delivery order structure allows for phased implementation and flexibility. 6. Geographic concentration in New Jersey for contractor operations.

Value Assessment

Rating: fair

The contract's value of $860 million over its period of performance is substantial, reflecting the critical nature of EHRM. Benchmarking against similar large-scale IT support contracts for federal health systems is challenging due to the unique scope of EHRM. However, the pricing structure (Time and Materials) can sometimes lead to cost overruns if not managed tightly. Further analysis of labor rates and hours billed against deliverables would be needed to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it resulted in a single delivery order to Booz Allen Hamilton suggests they were the most qualified or offered the best value among the bidders. The number of bidders (3) is relatively low for a contract of this magnitude, which could imply a specialized market or high barriers to entry.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages competitive pricing. However, with only three bidders, the price discovery might not have been as robust as in a more crowded field.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, aiming to improve its electronic health record management system. Services delivered include program management and IT support crucial for the success of the EHRM initiative. The contract's impact is national, as the EHRM system serves veterans across the United States. Workforce implications include potential for specialized IT and project management roles within Booz Allen Hamilton and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep with Time and Materials pricing if not rigorously monitored.
Dependence on a single contractor for critical EHRM support could pose risks if performance falters.
Limited competition (3 bidders) may have restricted optimal price negotiation.

Positive Signals

Awarded through full and open competition, suggesting a fair evaluation process.
Booz Allen Hamilton is a large, established contractor with significant experience in government IT projects.
Long-term contract duration allows for sustained focus and development of EHRM capabilities.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader IT services market. The federal government is a major consumer of these services, particularly for large-scale modernization efforts like EHRM. The market is characterized by a mix of large system integrators and specialized niche providers. Spending benchmarks for similar EHR implementations in the public sector are often in the hundreds of millions to billions of dollars, reflecting the complexity and scale.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is Booz Allen Hamilton a small business. This suggests that subcontracting opportunities for small businesses may exist, but they are not mandated through a specific set-aside program. The impact on the small business ecosystem will depend on the specific subcontracting plans developed by the prime contractor.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs contracting officers and program managers. The contract's performance will be monitored against defined deliverables and performance metrics. Transparency is facilitated through federal procurement data systems like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Veterans Health Administration IT Modernization
Department of Defense EHR Program
Federal Health IT Initiatives
Large-Scale IT System Implementation Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Long contract duration increases long-term dependency risk.
Limited competition may impact price discovery.
Past challenges with VA's EHRM program implementation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $859.7 million to BOOZ ALLEN HAMILTON INC. NEW TO - EHRM PMO IO SUPPORT

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON 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 $859.7 million.

What is the period of performance?

Start: 2022-09-28. End: 2027-01-15.

What is Booz Allen Hamilton's track record with large-scale federal IT modernization projects, particularly in healthcare?

Booz Allen Hamilton has a extensive history of supporting federal agencies with complex IT initiatives, including significant work within the defense and intelligence communities, as well as healthcare sectors. They have been involved in various aspects of IT modernization, system integration, and program management for large government programs. While specific details on their EHRM support for the VA prior to this award are not detailed here, their general profile suggests a capacity to handle such large and critical contracts. Past performance reviews and contract data would provide a more granular understanding of their specific successes and challenges in similar healthcare IT environments.

How does the $860 million contract value compare to other federal EHR implementation or support contracts?

The $860 million value for EHRM PMO IO support is substantial and aligns with the significant investments federal agencies make in modernizing their electronic health record systems. For context, the Department of Defense's MHS GENESIS EHR system has seen costs well into the billions over its lifecycle. While this VA contract is for support services rather than the full system development and deployment, its scale reflects the complexity and long-term commitment required for such critical health IT infrastructure. It is comparable to major IT support contracts awarded to large system integrators for other federal agencies undertaking similar digital transformation efforts.

What are the primary risks associated with a Time and Materials contract of this magnitude and duration?

Time and Materials (T&M) contracts, especially for long-duration projects like this ($860M over ~4.5 years), carry inherent risks of cost escalation if not managed meticulously. The primary risk is that costs can increase beyond initial estimates if labor hours are not efficiently utilized or if project scope creeps without adequate controls. For the government, this necessitates robust oversight, detailed tracking of hours, and strong program management to ensure that the work performed directly aligns with project objectives and that rates remain competitive. Without stringent controls, T&M can become more expensive than fixed-price contracts.

How effective has the VA's EHRM program been historically, and what is the expected impact of this support contract?

The VA's EHRM program has faced significant challenges and delays since its inception, including cost overruns and issues with user adoption and system performance. This contract for Program Management and IT Support (PMO IO) is intended to provide the necessary expertise and resources to help steer the program towards greater success. The expected impact is improved project management, better technical support, enhanced system integration, and ultimately, a more stable and functional EHR system that can better serve veterans. The success of this support contract will be a key factor in the overall effectiveness of the EHRM initiative moving forward.

What are the historical spending patterns for EHR-related IT support at the VA?

Historical spending on EHR-related IT support at the VA has been substantial, reflecting the ongoing commitment to modernizing its health IT infrastructure. Prior to and concurrent with the large-scale EHRM deployment, the VA has consistently invested in various IT services, including system maintenance, upgrades, integration, and project management. Specific figures for 'EHRM PMO IO Support' prior to this award would be difficult to isolate without detailed historical contract data analysis. However, it's understood that the VA's overall IT budget runs into billions annually, with a significant portion dedicated to health IT initiatives like EHRM.

Given the limited number of bidders (3), what does this imply for future competition on related EHRM tasks?

A limited number of bidders (three in this case) for a contract of this scale and importance can suggest several things about the market for specialized EHRM support. It might indicate that only a few companies possess the specific expertise, security clearances, and scale required to compete effectively. This could potentially lead to less competitive pricing in future procurements if the market remains concentrated. However, it also means that the VA has identified a core group of capable vendors. Future competition could be influenced by how the VA structures subsequent task orders or related contracts, and whether new entrants emerge.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

Address: 1 CHRISTOPHER WAY, 13, EATONTOWN, NJ, 07724

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $859,933,211

Exercised Options: $859,686,306

Current Obligation: $859,686,306

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $698,161,538

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1007

IDV Type: IDC

Timeline